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Local authorities step up enforcement actions against businesses

19 11 20 Local authorities step up enforcement actions against businesses hero

A number of local authorities are starting to turn the heat up on businesses that have not paid their business rates bills during the period of the COVID-19 pandemic and lockdown and are applying for enforcement actions via the courts.


According to business rates experts at Colliers International, an increasing number of their clients are receiving letters demanding payment and/or a court summons.

As John Webber, Head of Business Rates at Colliers International says, “It is ironic that the Government is preventing private landlords from taking recovery action against tenants not paying rent while at the same time turning a blind eye to Billing Authorities acting on recovery action as if COVID-19 didn’t exist!”

Unlike those in the retail and leisure sectors, office occupiers were not granted a business rates holiday during lockdown, despite the Government announcing on 20 March 20 that staff in office-based businesses should not assemble together, nor to travel on public transport unless they were essential workers but should work from home; effectively “prohibiting the use” of such offices, leading to many business owners leaving their offices and work locations empty.

And as the initial lockdown started to lift, many offices remained empty or only became partly occupied, particularly as the Government insisted on social distancing rules, limiting numbers and discouraging workers from using public transport. Now as we experience a second lockdown, even these offices have been emptying again

The impact on many businesses has been dramatic, with many suffering a high financial disruption throughout the period. This is shown by the number of companies that have begun to appeal their business rates assessments on the grounds of an MCC (Material Change of Circumstance) to their business operations as a result of COVID-19 and lockdown. Latest CCA (appeals) figures announced last week show that over 183,000 businesses made a Check and so began the appeal process in the 6 months period 1 April to 30 September 2020, averaging according to Colliers over 1000 appeals per day; an unprecedented number, and putting us, according to John Webber, Head of Business Rates at Colliers International, on a “wartime footing”.

John Webber said, “We appealed to the Government to introduce a business rates holiday for the period of lockdown and to introduce some reliefs for the disruption to businesses seen since. As we enter a second period of lockdown, this is more important than ever.

“In the meantime, we have been negotiating on our client’s behalf with local billing authorities requesting them to show leniency to businesses that are struggling to pay their bills. We are finding that attitudes vary greatly depending on where businesses are based and the attitudes of the individual billing authority. There is a total lack of consistency - some clients for example with properties across boundaries find they are granted reliefs for some of their properties by certain local billing authorities but not from others”

“And recently there has certainly been a step up of enforcement activity via the Courts. It’s ironic that whilst many businesses have been forced to “empty “their offices for a second lockdown, the courts are being kept open in this period to deal with the backlog of cases. As a result, we believe we’ll see more court summonses and enforcements as we go forward.”

Colliers cites the following examples of enforcement activity it is seeing in some parts of the country:

  • One local authority in Hampshire issued Final Notices to businesses in June whilst the country was still in lockdown and didn’t offer Colliers the chance to re-calculate its client’s instalments and “didn’t see” the email sent requesting they do so. This local authority is currently saying that the client can either reinstate instalments by making a catch-up payment with costs included or just pay the year’s liability upfront - but those are the only ways in which they will remove the summons.

  • One West London local authority has summonsed a Money Exchange shop where the business did not get a grant and was also not entitled to rates relief. It is now being  chased for payment through the courts.

  • One Midlands client gained reliefs on some offsite facilities from one billing authority and presented these facts to another where it hadn’t. However, the stock response was that it is all down to local interpretation of the government’s guidelines. The client is now being chased for non-payment via the courts.

As John Webber, concludes, “It is outrageous that not enough is being done to help thousands of businesses who, due to a Government led policy, are struggling to pay their rate bills and keep afloat, during this difficult time. Instead of receiving help, many are receiving threats of court summonses and it’s a postcode lottery as to where this is occurring.

“Many of our clients have been badly impacted by COVID-19 but have received little or no assistance, unlike some other sectors of the economy. Such businesses are vital if the economy is to rejuvenate.

We urge the Government to offer reliefs for the lockdown periods and to instruct Local Billing Authorities to show flexibility and support to business rather than stepping up the heavy-handed court summons."

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Related Experts

John Webber

Head of Rating

Rating

Birmingham

I have over 35 years’ experience in the rating industry and lead a 135 plus rating team at Colliers.  When I took over responsibility for the team in 2005, it consisted of only a dozen people and has now grown into one of the leading rating advisory teams in the country.  I am a member of Colliers' UK Management Executive as well as sitting on the company’s Balance in Business Committee. 

I am regularly called upon by the national media to give my views on a range of business rates issues and I am involved in lobbying MPs/ministers and senior civil servants on business rates matters.

I started my career in the Valuation Office Agency in Kidderminster.  I joined Gerald Eve in 2000 where I spent 10 years before moving to Gooch Webster (now Colliers). I sit on the National Retail Panel of Rating Surveyors Association which provides guidance on how the RSA town committees work with the VOA and valuation matters.  I have also held the postion as Chair of the RICS Rating Diploma Committee having passed the prestigious qualification in 2014. I currently sit on the Rating Surveyors Association National Committee .

Along with Philip Harrison we founded 'Accurates' in 2007, the Collier's Compliance and Audit team, which although forms an integral part of the Rating team is now a leading brand in its own right.

View expert

Suzy Simpson

Head of Content, Communications and PR

PR

London - West End

As Head of Content, Communications & PR for Colliers in the UK, I am responsible for driving the strategic direction of corporate communications, media relations, and the programming and production of multi-channel content to engage external and internal audiences across the UK.

Get in touch for help with: 

  • Content Communication Strategy 
  • Media Relations
  • Corporate & Internal Communications
  • Media Training & Personal Brand Training

 

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