Councils to hire ‘snoopers’ to find ways of making firms pay more
COUNCILS are hiring snoopers who use satellite technology to check if small businesses are paying correct business rates, it has emerged.
The tactic is being deployed by around half of all councils in England in the hope of raking in an additional £100million a year in small firm taxes.
It comes as small businesses are already facing crippling additional charges that will mean those operating from commercial premises are charged hundreds of pounds more annually.
Business rates are calculated on the value of a firm’s physical premises and are reassessed every five years.
Councils are themselves at financial “breaking point” with some expected to declare technical insolvency in the next two years, experts have said, so they are looking at ways of bringing in more money.
According to The Sun, struggling local authorities have hired Analyse Local, a satellite imagery company that boasts on its website that it can find another £80million in rateable value by observing buildings and sending in “spies” to identify refits and improvements that add to the value of premises.
Councils including Leicester, Luton, Oxford and Waltham Forest, in East London, are understood to be among the firm’s clients.
Changes that could result in higher taxes being paid range from extensions to features such as air conditioning. The Federation of Small Businesses said the practice was unfair on small businesses and demanded a clampdown on such tactics. Mike Cherry, head of policy at the FSB, said councils were squeezing firms so much that increasing numbers of local companies were at risk of going under.
“Councils should be competing to create the most pro-business, low-tax regime to attract more businesses,” he said. “Instead, many seem to view their
‘Councils should compete to create the most pro-business, low-tax regime to attract more businesses’
business community purely as a shortterm cash cow.”
But the Local Government Association said: “Councils have a duty to ensure that businesses pay the correct rates.” British businesses already face an extra £1billion in bills next year unless the Government freezes business rates. The Retail Price Index of 3.9pc inflation announced yesterday is the figure that will be used to set business rate values in April, on top of the increases that came in this year.
But the British Retail Consortium and other firms said without intervention, retailers and other firms would face a rates rise twice as large as last year. Gerald Eve, an international property consultancy, said that the total increase to business rates across all sectors could be as much as £1 billion in April if the 3.9 per cent increase goes ahead, based on the £25.7billion paid in rates in the current financial year.