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SCANDAL OF £200MILLION WORTH OF APPEALS AGAINST SALFORD COUNCIL BUSINESS RATES
 

Star date: 5th March 2018

SALFORD COUNCIL SPENDING ON SERVICES CRIPPLED BY BUSINESS RATES APPEALS

What Salford City Council calls "the use of aggressive business rate avoidance tactics" has led to over £11million being set aside to cover losses, with the cost of appeals in the region of £5million this year. This at a time when front line services are being cut.

Since 2010, there have been a staggering 11,000 appeals against business rates in Salford, with the current value of appeals cited as over £200million.

Full details here...


While the Tory Government is hammering local government funding, leading to cuts in front line services, the collection of business rates is being expected to make up at least some of the shortfall.

The Government is doing this by allowing councils to retain a greater proportion of business rates and Salford is one of the pilots in a 100% retention scheme. However, alongside this, the city is also losing millions of pounds by companies challenging Valuation Office Agency (VOA) figures upon which business rates are set...

Since 2010, there have been a cumulative total of over 11,000 appeals against valuations in Salford, with a new Council report stating that "The current value of appeals outstanding is c.£200million" (£210.7million according to a previous report).

The Council has had to set aside £11.13million this financial year (up until the end of January) to cover losses from outstanding business rates appeals, while the actual cost of fighting appeals is estimated to hit £5million this year.

A Salford Council report in January on the state of business rates emphasised the "adverse impacts of the continued use of business rates avoidance tactics", while a new report being discussed this week cites...

"The volatility in the level and subsequent cost of appeals; the use of aggressive business rate avoidance tactics; legal challenges relating to charitable relief; and changes in the business rate relief schemes announced by the government which will impact on the council's business rate yield..." 

The report also mentions "the ease by which speculative appeals can be made", and adds that, while the Government brought in a new procedure in April last year aimed at streamlining the appeals process, it is only in operation for new appeals from that date.

The Council report concludes that all these issues "could potentially increase the pressure on business rate resources and make it more difficult to deliver a balanced budget".

As Salford continues to grow, with new businesses springing up seemingly everywhere, the Council is mired in 'aggressive business rate avoidance tactics'. Indeed there's now almost an industry springing up to help businesses indulge in it...

Meanwhile, the Council forecast that £87.374million would be brought in from business rates this year. In the event, only £84.68 is expected to materialise – a deficit of £2.68million.

The reasons are varied, from adjustments that have seen the rateable value of the city reduced by 1.5%, to more small businesses being eligible for business rate relief, to 'losses in collection'. The deficit means that "reduced distributions will be
made to the council's general fund and GMCA (fire) in 2018/19"
the Council report concludes.

With the Tory Government pushing councils to rely more and more financially on business rates, it's apparent that the eggs in this particular basket are getting well scrambled.

Rates Man wrote
at 10:07:52 AM on Tuesday, March 6, 2018
Before 2017 the only way to get the evidence the VOA had used to set your rateable value was to appeal it, hence speculative appeals. If you get a tax bill with no explanation of how it was calculated, wouldn't you appeal it?
 
Rettired Socilist wrote
at 5:57:48 PM on Monday, March 5, 2018
The Council as a Business model is falling so badly it would struggle getting past week one with Alan Sugar. The Business rates even if it reached an expectable claw back rate is still struggling with it's small base in comparison to MANCHESTER. Along with the thousands written off each year by the shambolic treasury under Cllr Hinds what can we expect. Look around Swinton and walkden precincts they are at deaths door, no major retailer would look seriously at a salford base but i bet the list is growing at the Trafford centre for space. Clr Merry and his dream of selling land for shops at his White elephant rugby ground gathers dust so what's the future? perhaps we should all do what Phil does take a few more drags on his whacky tobacco and dream of a socialist Dennett fairy land excuse the pun or get out before the last shop closes.
 
wrote
at 5:57:34 PM on Monday, March 5, 2018
'Small businesses being eligible for business rate relief' Surely this isn't a loss but businesses being eligable for something and claiming it?
 
Felsey wrote
at 5:57:18 PM on Monday, March 5, 2018
Nobody likes to say I told you so. If I was Mayor our Salford Council would be £1billion better off since 2012. Even now I believe £765million can be clawed back and £48million cash each year raised. What is there not to like about more money.
 
Dave Grant wrote
at 5:56:39 PM on Monday, March 5, 2018
These companies wouldn't be able to appeal if Salford Council sat the correct business rates for there business in the first place. They over charge hoping that they can get away with it
 
a drop in the ocean wrote
at 10:19:14 AM on Monday, March 5, 2018
Its nothing compared the 1 billion in liabilities from the 'passed off', court summons, staged court hearing and all the other dodgy processes the council's joint legal department. None of it legal
 
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