UK Debt Crisis: £2.5bn owed in Business Rates

It was revealed recently that over £1bn in Business Rates debts has accumulated over the past year. If you add this to the existing debt, local councils are now owed £2.5bn in Business Rates. The question we need to ask is why has this level of debt developed?

The pressure of COVID-19 has certainly played a key role in the rising crisis. Towards the beginning of the pandemic, the government announced that they would offer a rates holiday for the retail, leisure and hospitality industries. This was welcomed by those in the sectors, however it excluded both office operators and industrial firms.

These two industries have been hit particularly hard by the pandemic. With many companies working from home, more and more office spaces have been left deserted. Despite this, business owners are still having to pay full rates, evidently something that they are struggling with.

From a Business Rates system that’s already fundamentally flawed, so naturally many businesses are crumbling under the weight.

In the past year, councils have collected £15bn in Business Rates payments from companies not eligible for the rates holiday. On top of these payments, many landlords are burdened with rent debt arrears, often struggling to fill empty properties. The total of these debts are believed to be around £5bn.

These figures have come as MPs prepare to debate legislation which could rule out COVID-related business rates appeals. This would deal yet another blow to already struggling business owners.

The government has offered an alternative, by providing a £1.5bn fund to councils for  businesses in affected industries, however many argue that this is not enough. It does not provide enough support as quickly as it will be needed in a post-pandemic world.

Are you struggling to pay business rates on your occupied or empty property? We could save you up to 100%. Get in touch with Verity to find out how we can help you.