Taxes purge

Name them and shame them tactic to be employed to collect unpaid rates?

High Street for Notebook caption with copy by BillDumbarton High Street where some businesses come and go. Picture by Bill Heaney

Councillors in West Dunbartonshire will consider whether businesses who fail to pay their taxes should be named and shamed.

Officers will recommend the move at committee this week to respond to a small percentage of companies avoiding the Non-Domestic Rates (NDR).

In some cases the companies cease trading and have the debt written off, only for the owners to return to the area with a new company, delivering similar services, a council spokesperson said.

In 2017/18, 1.64 per cent of businesses failed to pay their debt. If the Council has to write off the same percentage of the 2018/19 annual bill of £87,198,730, it would fail to recover £1.43 million in lost income.

Councillors will make a decision on the proposal to publish business’ details on a dedicated website when the Corporate Services Committee meets on Wednesday.

If it is approved, the Council will still give businesses a fixed amount of time to pay off their charges, in line with NDR recovery legislation.

A final recovery notice will be issued six months after the first instalment is due.

If payment is not received following the final notice, the Council will publish the name, type of business, address, period of default and the total amount due. This will help residents make informed decisions about the businesses they engage with.

Officers hope the recommendation will lead to businesses working better with the Council to take advantage of the supports available to them and settle their bills, before getting to the stage of being named online.

Stephen West, Strategic Lead for Resources, and the Council’s Chief Financial Officer, said: “Often companies we are chasing are dissolved or go into administration then re-appear almost immediately. The practice is often referred to as ‘Phoenix companies’ and allows the owners to avoid unpaid bills.  Councillors have previously asked officers to consider how best to tackle this practice and our recommendation is now going to Committee to see if it meets their aspirations.”

NDR, also known as business rates, is a property based tax charged to businesses based on a property’s rated value.  All local authorities collect the rates and the money is pooled in a national central fund, controlled by the Scottish Government.  Each authority is then given a grant from this fund through the Local Government Finance settlement.

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