Non-domestic Rates: Tax Evasion

Department for Communities and Local Government written question – answered on 27th October 2017.

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Photo of Lord Porter of Spalding Lord Porter of Spalding Conservative

To ask Her Majesty's Government how many businesses have been found to be avoiding business rates through fraudulent use of mandatory business rates reliefs in each of the past five financial years; and what is their estimate of the loss of income resulting from that avoidance.

Photo of Lord Bourne of Aberystwyth Lord Bourne of Aberystwyth Parliamentary Under-Secretary (Northern Ireland Office), The Parliamentary Under-Secretary of State for Wales, The Parliamentary Under-Secretary of State for Communities and Local Government

Local authorities already have significant powers to tackle and prosecute fraud to protect the public purse which we encourage them to utilise. Under the Local Government Finance Act 1988 if a ratepayer provides false information in their application to apply for small business rate relief that individual is liable to a summary conviction, a fine or both. The Fraud Act 2006 also provides local authorities legal powers to prosecute fraud to protect the public purse.

The Government has been clear that it is committed to tackling avoidance in all forms of taxation. At the last count the Local Government Association (LGA) estimated that the losses due to business rates avoidance accounted for around £230 million.

The Government recognises the importance of tackling rates avoidance and the Secretary of State wrote to you in September stating that his officials would work with the LGA to develop workable proposals, towards the aim of cracking down on those that abuse the system and closing down loopholes.

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