At the request of Councillor Daley, Stephen McGinnes, the Head of Revenues and Benefits, presented a report reviewing the risks associated with the business rates recovery processes adopted within the Revenues and Benefits Team.  It was noted that whilst decisions relating to the writing-off of irrecoverable business rates were delegated to the Leader of the Council, the Audit Committee had a role in ensuring that the systems/controls in place were effective and proportionate.

In response to concerns about the length of some periods of non-payment, the Head of Revenues and Benefits confirmed that where the Council was unable to collect the business rates that were payable, it took a robust approach to recovery.  This involved progressive action which would typically include:

·  Reminder for non-payment

·  Final notice for non-payment

·  Summons for non-payment

·  Application to the Magistrate’s Court for a liability order

·  Instruction of a bailiff to recover

·  Bankruptcy or liquidation, where appropriate

·  Proceedings to seek committal to prison (individuals, not limited companies)

In response to questions, the Officers confirmed that:

·  In terms of Council Tax and business rates arrears, the Council was not a preferred creditor for the purposes of liquidation.

·  The Council was proactive in the use of enforcement agents and bailiffs to recover debt.

·  Having exhausted all recovery processes in trying to collect unpaid business rates, the Council could continue to hold the debt as outstanding or consider writing it off.  If the debt was written off and the debtor subsequently identified, there was nothing to stop the Council reinstating the debt.  There were risks associated with holding a debt as outstanding with no scope for recovery.

·  With regard to speeding up/improving the process, the last internal audit inspection of business rates (valuation, liability and billing) had concluded that the controls in place provided a substantial level of assurance.  The collection rate was benchmarked regularly against other local authorities in Kent with positive results.  The Strategic Leadership and Corporate Services Overview and Scrutiny Committee would be reviewing the Council’s Debt Recovery Policy, including the arrangements to recover unpaid business rates.

·  Within the Revenues and Benefits Team, twenty members of staff were dedicated to billing local residents and businesses for Council Tax and business rates and collecting the same utilising all tools available.  Whilst the average in year collection rate in respect of business rates was 97.66%, the actual amount ultimately recovered was nearer 99%.  The Council maintained a provision for bad debts, currently between 1% and 0.5% of the total amount billed.

The Committee, wishing to consider the specific details of a business rate debt identified for write-off in private:

RESOLVED:  That the public be excluded from the meeting for the following item of business because of the likely disclosure of exempt information for the reason specified having applied the Public Interest Test:

It was noted that in this case the company had  ...  view the full minutes text for item 32