Car dealers could be facing an uncertain future once the current business rates holiday ends, with companies across England now owing councils almost £2.5bn in unpaid fees.
New analysis shows that firms across all sectors have seen debts pile high over the past year, largely as a result of having to close during the pandemic.
The Government last week announced that the holiday, as well as the ban on evictions for unpaid commercial rent, would be extended until next March to help companies recover.
However, analysis of official data by real estate advisers Altus Group has revealed a huge leap in rates arrears despite the added support.
Councils collected £14.88bn in business rates in the year to March 31 2021 from firms not eligible for the holiday.
The figures also revealed £1.18bn in rates arrears accrued over the year, taking total rates debt, including arrears from previous years, to £2.49bn.
The large debt burden is expected to particularly affect office operators and industrial firms – such as workshops – who still had to pay full business rates being impacted heavily by Covid-19.
This debt mountain comes on top of billions in rent debt arrears, with hospitality and retail trade bosses warning that the firms across the sectors face unpaid rent piles of more than £5bn.
The new figures come as MPs prepare to debate legislation in Parliament on Monday which could rule out coronavirus-related business rates appeals.
Material change in circumstances appeals typically allow rate-payers to seek substantial adjustments to the rateable value of properties.
The Rating Surveyors Association say that the overall value of appeals due to coronavirus are worth around £5bn to firms in England.
However, in March, the Government said it would provide a £1.5 billion pot to councils outside of the retail, hospitality and leisure sectors aimed at those who had suffered the most economically, rather than the normal right to appeal.
Robert Hayton, UK president of property tax at Altus, said: ‘Removing the appeal right from firms is a crushing blow to business.
‘The replacement scheme is wholly inadequate – it won’t deliver enough support quickly enough and will exclude those firms still trading under restrictions.
‘This Bill threatens the post-pandemic recovery and undermines the whole rating system.’
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