One Small Business Owner A Week Faces Jail Over Rates Tax

Friday, September 29, 2017


Courts are handing out prison sentences of up to 90 days to one small business owner EVERY week for non-payment of business rates in England and Wales, a CVS Freedom of Information Request has revealed.

Whilst companies can place businesses into administration if they are unable to meet debts like business rates, for sole traders who are self-employed, Councils can apply to the Magistrates' Court for their committal to prison for non-payment of business rates.

Our FOI to the Ministry of Justice has revealed that during 2016/17 the Courts handed down 54 sentences and 52 in 2015/16 which included the committal to prison for non-payment of rates.

The news comes as Hambleton District Council only recently warned their small firms with a rates debt to pay up or face prison as they were starting committal proceedings with Council Deputy Leader, Peter Wilkinson, saying "we would advise those that are not up to date with their payments to contact the recovery section to arrange payments before they are subject to a court order for committal to prison."

The Valuation Office Agency, an Executive Agency of HM Revenue & Customs, confirmed that there is still 233,550 unresolved business rates appeals from 2010 that, if successful, could trigger tax rebates for the last 7 years. 

Business rates bills must still be paid and enforcement action through the Courts is taken even if there is an outstanding appeal which could result in a tax rebate. 

This is even though it is the only tax not related to the ability to pay, so it places both a disproportionate financial and legal burden on sole traders.

Official Government forecasts show revenue from the controversial business rates tax is projected to rise to £4.9billion from £28.8billion last year to £33.7billion by 2021/22 representing a 17.01% hike in revenue.

Property Taxes overall in the UK are already the highest, as a percentage of overall taxation and GDP, of any EU country.