FINANCE

Councils losing £250m a year through business rates avoidance

Councils are losing £250m a year due to businesses avoiding paying their rates, new research has found.

Councils are losing £250m a year due to businesses avoiding paying their rates, new research has found.

A survey by the Local Government Association (LGA) found eight in 10 councils said they do not have enough power to tackle the problem.

Almost half of respondents said the practise of ratepayers using rates mitigation firms in return for a percentage of the rates saved was widespread.

The LGA called for tougher legislation to close loopholes, and wants councils to have new legal powers to enter and inspect non-domestic properties to verify information relevant to billing.

Chair of the LGA's resources board, Cllr Richard Watts, said: ‘Too many businesses are exploiting loopholes and manipulating the system to avoid paying the tax they owe.

‘The scale of business rates avoidance shows more needs to be done to tackle this behaviour and reduce avoidance.

‘Every penny lost through business rates avoidance is money that could be spent on adult social care, children's services, fixing roads and other vital community services.'

The Government said more than four years ago that the scale of the problem confirmed that business rates avoidance needed to be addressed, but no action has been taken.

However, the Welsh and Scottish Governments are in the process of preparing to introduce measures to tackle business rates avoidance.

FINANCE

The big picture is clear – we must work through this together

By Jonathan Carr-West | 02 July 2025

Jonathan Carr-West looks at what the fair funding review consultation reveals – or doesn’t – about other policy issues including reorganisation, mayors and t...

FINANCE

Grant funding's phase-in

By Ann McGauran | 02 July 2025

The fair funding review 2.0 has landed, but will it put the whole of a beleaguered sector onto a financially sustainable footing and improve the lives of res...

FINANCE

EXCLUSIVE: LGA sideline fears as mayoral base grows

By Dan Peters | 02 July 2025

Senior Local Government Association (LGA) figures have urged the organisation to do more to court the growing army of mayors amid fears it could be sidelined.

FINANCE

A council on a mission

By Cllr Lisa Evans | 02 July 2025

Mission-based working is transforming Stockton-on-Tees by empowering communities and driving change for the better and Cllr Lisa Evans is at this week’s LGA ...

Dan Peters

Popular articles by Dan Peters