One in six high street firms taken to court as business rates bite

One business leader said summons are being “hastily issued” as owners risk being penalised.

Freedom of Information requests revealed nearly 130,000 high street shops, pubs and other firms were hauled into magistrates courts.

Martin McTague, policy chairman at the Federation of Small Businesses, said: “Bureaucrats should be getting behind striving small firms and finding a fairer tax system – not being triggerhappy in firing up their summons-making machines.”

Data from 212 councils, covering 68 per cent of liable properties, showed that a total of 129,306 summons were issued across England in the year to April.

But retail estate adviser Altus Group, which submitted the requests, warned that the real figure could be closer to 200,000.

Birmingham and Liverpool councils took the most business owners to court, issuing 7,044 and 3,538 summons respectively.

Tower Hamlets and Camden in London, Leeds, Bradford, Sheffield and Bristol councils all pursued payments from more than 2,000 local firms.

Mr McTague told how summons are often “hastily issued” just a few weeks after bills are sent out and can be difficult to challenge.

He said: “Those who believe their business rates bill is too high face a lengthy and cumbersome appeals process. At the same time the bills keep coming.

“The whole business rates system is outdated and broken, disproportionately hitting high streets and small firms which rely on premises in areas of higher property values.

“Hard-working small business owners can sometimes struggle to pay these big tax bills which apply before they’ve made a penny in turnover, let alone profit. It’s high time for reform.”

Robert Hayton, head of business rates at Altus, said many firms were facing unfair bills in struggling areas.

“Many business have ended up paying disproportionately high bills in locations where local economies are under-performing and values have fallen,” he said.

Bosses at Tesco, Sainsbury’s and Argos have accused business rates of damaging the retail industry.

In April, bookseller Foyles blamed a loss of more than £88,000 on the rise in business rates, while Pizza Express said the tax was a key cause of a fall in earnings last year.

Bank of England governor Mark Carney admitted in May that business rates have become a “real issue” across the country.