A Council has decided to write off nearly £1.3m in unpaid business debt it has been reported.
Cardiff council took the decision to write off “irrecoverable” debts amounting to over £1 million owed to it through taxes on non-domestic properties.
Cardiff Council’s cabinet voted to authorise the writing off of non-domestic rates debts totaling £1,282,187.71 at a meeting today.
Income from non-domestic rates – taxes paid on non-domestic properties, like shops, offices, pubs and factories – pays for vital council services such as social care, waste management and education.
In Wales, non-domestic rates income is collected, paid into a National Pool for Wales and redistributed back to local authorities on a per capita basis.
This year Cardiff Council is responsible for billing and collecting about £195 million worth of non-domestic rates.
Unpaid Business Debt
A cabinet report on the proposed writing off of non-domestic rates debts says that “there are occasions where collection of the full tax is not possible resulting in the writing off of the outstanding debt.”
The report continues: “This course of action is taken only after all possible recovery options have been exhausted.
“These include sending reminders, final notices, and the obtaining of liability orders from the Magistrate’s Court, which then entitles the authority to instigate further action such as bankruptcy/liquidation proceedings or the ability to levy distress.”
To levy distress means the seizure and sale of goods from a debtor, with the money from any sale being used to offset against the debt.
At today’s meeting, the Cabinet Member for Finance, Modernisation and Performance, Cllr Chris Weaver said that “from time-to-time there are rates in excess of £100,000 in value that the council is unable to collect,” and highlighted that in such cases a formal request to cabinet to write off the debt must be made.
Information on which companies owe money to the council and how much they owe are contained within confidential appendices of the council’s report.