One small business owner a week has been sent to prison after failing to pay the newly adjusted business rates bills, as the government warns sole traders to pay up or face prison.
According to new data compiled by CVS for the Press Association, 54 business owners were sent to prison for up to 90 days for nonpayment of business rates in the year to the end of March.
Whereas limited companies face liquidation if they are unable to pay the controversial new rates, sole traders and self-employed businesses face a “disproportionate financial and legal burden” and prison for not keeping up with payments.
Businesses across the UK have been challenging the rates revaluations, which continue to cripple thousands.
The government pledged £300 million to a relief fund to help those businesses most affected, but just two out of nearly 100 local councils have paid out so far amid increasing delays and lack of direction from the government.
For the hundreds of companies challenging their revaluated business rates bill, bills must still be paid while a decision is made on their appeal.
“It is the only tax not related to the ability to pay, so it places both a disproportionate financial and legal burden on sole traders.” CVS chief executive Mark Rigby said.
The disproportionate challenges faced by limited companies and sole traders was thrown into the spotlight earlier this year with the collapse of fashion retailer Jaeger.
Roughly £2 million was owed in relation to business rates bills to 39 different councils and around 2p in the pound was returned to councils as the company fell into liquidation.