POLICY AND RESOURCES COMMITTEE

[14 December 2016]

Is the final decision on the recommendations in this report to be made at this meeting?

Yes

 

IRRECOVERABLE BUSINESS RATES

 

Final Decision-Maker

Policy and Resources

Lead Head of Service

Stephen McGinnes

Lead Officer and Report Author

Sheila Coburn

Classification

Public

Wards affected

All

 

 

This report makes the following recommendations to this Committee:

1.   That the unpaid Business Rates debt identified within Appendix A is approved for write off.

 

 

This report relates to the following corporate priorities:

·         Keeping Maidstone Borough an attractive place for all -

·         Securing a successful economy for Maidstone Borough -

 

 

Timetable

Meeting

Date

Policy and Resources Committee

14 December 2016



Irrecoverable Business Rates

 

 

1.        PURPOSE OF REPORT AND EXECUTIVE SUMMARY

 

1.1    To approve the write off of Business Rates debt where the council has      exhausted all options to collect the debt and has no prospect of recovery

 

 

 

2.        INTRODUCTION AND BACKGROUND

 

2.1   The council collects Business Rates each year amounting to £70 million from 4,820 ratepayers, with an average collection rate of 98.5%.

 

2.2   Where the council is unable to collect the business rates that are payable, it

takes a robust approach to recovery. This involves progressive action which

would typically include;

 

·         Reminder for non payment

·         Final Notice for non payment

·         Summons for non Payment

·         Application to the Magistrates Court for a liability order

·         Instruction of an enforcement agent to recover

·         Bankruptcy or Liquidation, where appropriate

·         Proceedings to seek committal to prison (individuals)

 

2.3  Throughout the collection process the Council actively encourages contact from any business experiencing difficulty in order to negotiate arrangement for payment.

 

 

 

3.        AVAILABLE OPTIONS

 

 

3.1   The council has exhausted all recovery processes in trying to collect the unpaid business rates from 18 businesses identified within appendix A, with no prospect of recovering the arrears. The outstanding Business Rates arrears and amount identified as irrecoverable can be broken down as follows.

 

 

Financial

Year

 

Gross Debt

 

 

Arrears outstanding

 

Proposed

write off

Write off as % of gross debt

2009/10

£59,975,085

     £31,286

     £6,444.08

0.01%

2010/11

£59,162,504

   £110,007 

 £25,376.17

0.04%

2011/12

£60,912,607

   £133,148

 £37,644.89

0.06%

2012/13

£63,986,563

   £189,957                                   

 £72,223.62

0.11%

2013/14

£66,572,476

   £381,145

£103,439.68

0.15%

2014/15

£67,990,994

   £796,437

£249,177.47

0.37%

2015/16

£69,898,713

£1,613,965

£244,316.20

0.35%

2016/17

£70,395,476

       -

 

 £1,238.28

-

 

£518,894,418

£3,255,945

 £739,860.39

0.14%

 

3.2 Please note that information relating to individuals is protected by data

protection legislation and has therefore been redacted within Appendix A.

 

 

4.        PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS

 

4.1    Whilst the council can continue to hold the debt as outstanding, it has no prospect of recovery and this will therefore distort the council’s true financial position, and is therefore not recommended.

 

 

 

5.       NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION

 

5.1 The councils accounts will be amended to reflect the fact that the payments

identified are not expected to be recovered.

 

 

 

6.       CROSS-CUTTING ISSUES AND IMPLICATIONS

 

 

Issue

Implications

Sign-off

Financial

The Council maintains a provision for bad debts, the extent to which the provision is used is linked to the level of arrears at the end of the

financial year. There is sufficient resource available from the provision and the in-year budget for non-collection to cover the value of write off proposed while retaining

adequate provision for the projected outstanding debt at 31st March 2017

Section 151 Officer & Finance Team

Legal

There are no legal implications in the decision to be taken

Estelle Culligan

Interim  Head of Legal Partnership

 

7.        REPORT APPENDICES

 

Appendix A: table of irrecoverable business rates

 

8.      BACKGROUND PAPERS

None