'Options exhausted' - South Tyneside Council writes off £144k in business rate debts
“All reasonable and proportionate recovery options have been exhausted."
Senior councillors in South Tyneside have agreed to write off “irrecoverable” business rates debts of more than £144,000.
The local authority’s ruling Reform UK cabinet made the decision after discussing a report titled “sums due to the council considered irrecoverable.”
The council regularly reviews debt levels, with reports presented to cabinet in line with the council's constitution and financial regulations.
The latest decision on debt write-offs included eight individual cases where unpaid business rates, or national non-domestic rates, were linked to companies that had entered formal insolvency proceedings.
A council report outlined that the in Senior councillors in South Tyneside have agreed to write off “irrecoverable” business rates debts of more than £144,000.
The local authority's ruling Reform UK cabinet made the decision on Wednesday after discussing a report titled “sums due to the council considered irrecoverable.”
The council redividual business rates debts ranged from around £10,000 to £46,588, with the total for the eight cases reaching £144,139.05.
Councillor Susan Sybenga, deputy council leader and cabinet member for finance and resources, said the "exceptional cases" represented 0.45 per cent of the council's typical annual business rates revenue of £32 million.
The cabinet member said the council "continues to collect business rates effectively, achieving an in-year collection rate of over 98 per cent, despite ongoing economic challenges facing businesses".
Cllr Sybenga added: "Extensive recovery action has been taken in every case before insolvency prevented further recovery.
"Writing off these debts ensures the council's accounts reflect sums that are realistically recoverable."
The council report added that the write-offs do not prevent future debt recovery should new information emerge, such as a "future dividend or distribution should additional assets be identified."
It added that "failure to write off irrecoverable debts risks misrepresenting collection performance" and that "timely write-off ensures compliance with financial regulations and good governance practice."
Councillor Paul Mackings, leader of the council, said the report makes clear that the proposed write-offs relate to "exceptional insolvency cases where all reasonable and proportionate recovery options have been exhausted."
Cabinet approved the business rates debt write-offs and agreed that "officers may reinstate recovery action if new information becomes available or circumstances change."
The cabinet meeting took place on Wednesday, September 23, at South Shields Town Hall and the agenda publicly available.