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Thousands of Kent firms threatened with court over rates

More than 4,400 businesses were threatened with court action for defaulting on their rates in just eight months, figures obtained by the Kent Messenger Group reveal.

The statistics show that councils in Kent issued 4,457 businesses with court summonses between April and November last year, with about 2,500 subsequently issued with liability orders by magistrates.

When such orders are granted, councils have the power to make businesses insolvent or instruct bailiffs to take away property if the outstanding bills remain unpaid.

Such moves can frequently result in firms and companies going bust.

The figures indicate that increasing numbers of businesses are struggling with their bills as the recession bites. They prompted a call from business chiefs for councils to be more flexible.

The Kent branch of the Federation of Small Businesses said councils needed more powers to help firms that were feeling the pinch.

Kent FSB chairman Roger House said: “Rates are not based on an ability to pay or a company’s profitability, but a fixed rateable value. We are in a recession and we have to look at things differently right across the board. The Government has to be more flexible and it may be that it has to give councils more discretion.”

The figures, obtained under the Freedom of Information Act, also show that nearly 19,000 businesses were sent reminders after falling behind with their payments, which are often made on a monthly basis.

Medway council issued the highest number of court summonses over the period - 982 - and also had the highest number of liability orders granted - 585.

The council said the figures did not indicate a significant increase because a new law meant it now charged 100 per cent rates on all business premises, having previously been able to offer a discount to empty properties.

That had resulted in a further 150 summonses being issued for non-payment than the previous year.

A council spokesman said: “We always try to help businesses that have difficulty paying their business rates and, where appropriate, can arrange to delay payment dates in the short term if this is the case. This is something that we are particularly focused on during the current economic climate.”

Tonbridge and Malling council issued 919 court summonses over the same period, the second highest number. Of those, an estimated 351 led to court orders.

Sharon Shelton, the council’s finance director, said: “The council has an excellent record for collecting business rates promptly. This means that the impact of unpaid business rates on council tax payers is kept to a minimum.

Where a business contacts us and demonstrates it is in genuine difficulty, we will do our best to help. This could be by making sure that it is claiming any reductions to which it is entitled or by re-scheduling payments.”

Some authorities acknowledged that paying rates was becoming a growing problem for businesses and were taking steps to help.

Shepway council issued more summonses in eight months than it did the whole of the previous year.

Cllr Robert Bliss (Con) said: “Our business rate collection rate has dropped off dramatically during the current economic downturn. However, although we have a legal obligation to collect business rates we are re-phasing payments where appropriate.”

Ashford council said it was willing to listen to businesses with difficulties paying bills in the recession.

Cllr Paul Bartlett, cabinet member for resource management and control, said:

“The council has been working with some companies to reschedule business rates payments to enable them to better deal with the current economic climate and the issues of cash flow problems. Decisions are taken on a case by case basis and we will always try to resolve and reschedule amendments to payment plans within the same financial year.”

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