According to new data, houses of industrial estates are stranded pending real estate tax rebates.
Research by real estate consultancy Altus Group has revealed that 3,165 commercial properties, including offices, factories, shops, cafes and restaurants, have gone bankrupt while awaiting the outcome of a corporate rate challenge.
Business rates are the property taxes levied on businesses in the UK and have risen steadily despite falling property valuations in recent years.
Currently, companies have a three-stage process – audit, challenge, appeal – for complaints about corporate rate payments, which was introduced in 2017.
The challenge process allows companies to make a formal dispute over their property valuation, which is used to calculate the bills paid to municipalities.
According to industry experts, about 60% of all challenges are eventually agreed upon.
The latest investigation found that the 3,165 business properties that went bankrupt after trouble could have had a £50.76 million cash injection in rebates, many of which are five years old.
Instead of kicking the can to be determined by overburdened tribunals, resources must now be mobilized
The Valuation agency (VOA), an executive agency of HM Revenue & Customs, is expected to resolve 90% of all challenges within 12 months.
However, since the introduction of the check, challenge, appeal policy, they have not achieved that target in every financial year.
In the 2020-21 fiscal year, approximately 43% of the cases were resolved in line with the target.
Robert Hayton, UK president of Altus, said: “Companies have emerged from a global pandemic to cope with a corporate cost crisis, but there is no urgency to help cash flow by quickly solving these challenges.
“Instead of kicking the can to be determined by overburdened tribunals, resources should now be mobilized by the VOA to clear the backlog while it is still manageable.”