THE leader of South Tyneside Council wants companies which fail to pay business rates ‘named and shamed’ – as new figures reveal an outstanding debt of almost £800,000 in the borough.
During 2012-13, the council collected 97.4 per cent of all business rates due, above the national average for metropolitan local authorities at 96.7 per cent.
But it still means that at the end of the last financial year the amount outstanding in unpaid business rates was £778,750. Under the present rules, councils are able to retain just under half of all sums collected, with the rest being passed over to the Government.
As a result, the council has a ‘missing’ amount in the region of £370,000 – money which could be invested in services locally.
The outstanding debts arise in the main as a result of businesses no longer trading, and the council pursues those debts through the courts.
Now council leader, Coun Iain Malcolm, has written to Eric Pickles MP, the Secretary of State for Communities and Local Government, asking for changes to the Data Protection Act which could help the authority in pursuing non-payers. Coun Malcolm said: “South Tyneside Council has a strong record in collecting business rates, but we are determined to make sure that everyone pays their fair share of taxation towards local services.
“The vast majority of business owners are responsible and pay their way, but there are some who repeatedly open and close businesses, leaving behind a legacy of unpaid business rates. Under the current rules in the Data Protection Act, we are not allowed to publicise the names of these individuals.
“The Government could make a real difference, and help us to achieve even higher collection rates if they remove these restrictions. This would have the benefit of drawing the public’s attention to individuals who are not paying their fair share.
“Where a business owner cannot be traced, the public would be able to help us trace them and take action to recover the debts. The Government has often asked councils to identify ways in which they can help us through the legislative framework, so I hope they will take this simple step to help us promote fairness in local taxation.
“The council also achieves high collection rates for Council Tax and will continue to pursue all non-payment by residents.”
The local authority successfully collects almost 99 per cent of all Council Tax due, this figure including debt from previous years but subsequently collected.
Since changes were made to the business rates system by the Government earlier this year, local authorities keep a higher proportion of business rates income locally, meaning that more effective collection has a significant and direct impact on the level of funds available for local services.