// Businesses now owe local councils almost £2.5bn in unpaid business rates, according Altus
// Figures come as MPs prepare to debate legislation which could rule out Covid-related business rates appeals
The debt crisis facing English businesses has ratcheted up further as they now owe local councils almost £2.5 billion in unpaid business rates, according to new analysis.
Many businesses have seen their debt piles climb higher over the past year after being forced to shut their doors for long periods or having faced disruption from Covid-19 pandemic restrictions.
The government has offered retail, leisure and hospitality companies a business rates holiday since the onset of the pandemic last year and recently confirmed it would extend the current ban on commercial evictions until next March.
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However, analysis of official data by real estate advisers Altus Group has revealed a jump in rates arrears despite financial support measures in place.
Councils collected £14.88 billion in business rates in the year to March 31 this year from businesses not eligible for the rates holiday.
Altus said the figures also revealed £1.18 billion in rates arrears accrued over the year, taking total rates debt – including arrears from previous years – to £2.49 billion.
The large rates debt burden is expected to particularly affect office operators and industrial firms who still had to pay full business rates but have been impacted heavily by Covid-19.
This debt mountain comes on top of billions in rent debt arrears, with hospitality and retail trade bosses warning that the firms across the sectors face unpaid rent piles of more than £5 billion.
The new figures come as MPs prepare to debate legislation in Parliament today which could rule out Covid-related business rates appeals.
“Material change in circumstances” appeals typically allow rate-payers to seek substantial adjustments to the rateable value of properties.
The Rating Surveyors Association say that the overall value of appeals due to Covid are worth around £5 billion to firms in England.
However, in March, the government said it would provide a £1.5 billion pot to councils outside of the retail, hospitality and leisure sectors aimed at those who had suffered the most economically, rather the normal right to appeal.
“Removing the appeal right from firms is a crushing blow to business,” Altus UK property tax president Robert Hayton said.
“The replacement scheme is wholly inadequate – it won’t deliver enough support quickly enough and will exclude those firms still trading under restrictions.
“This bill threatens the post-pandemic recovery and undermines the whole rating system.”
with PA Wires