Over 15m of bad debt written off by councils

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Councils in Wales have written off over £8.5m in business rates and £6.6m in council tax debt in the last financial year, it has been announced.

In total, councils wrote-off over 32,000 individual council tax debts and over 3,000 individual business rate debts.

The Welsh Local Government Association said the 22 Welsh councils had a good record, with a collection rate of 97%.

But the TaxPayers’ Alliance said councils “cannot afford to leave so much cash uncollected”.

The figures vary from Cardiff council writing off £3.3m between the two taxes to Pembrokeshire writing off around £139,000.

Swansea council stated that the main reasons for write-offs were debtors made bankrupt or having been liquidated, being unable to locate debtors, disputed liabilities and situations where it was not cost effective to pursue low value debts.

The information was obtained in a Freedom of Information request.

Councillor Aaron Shotton, Welsh Local Government Association spokesperson for finance and resources, commented: “Every year councils in Wales collect nearly £2bn in council tax and business rates.

“Councils in Wales have a good record in respect of debt collection and debt recovery rates, with ‘in-year’ collection rate for both of these taxes averaging approximately 97% (and this figure has remained stable).”

Mr Shotton said that over time in excess of 98.5% of all debt was collected, and claimed that compared to taxes collected by central government, local government was “a lot more effective in doing its job”.

He added: “Recent analysis by the Local Government Association in London shows that tax left uncollected by HM Revenue and Customs (HMRC) amounts to around £40bn, costing the equivalent of £1,370 for every household in England and Wales.

“If HMRC was to increase its collection rates to be at least as effective as local government it would bring in an additional £20bn to the Exchequer”.

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