Council has written off £2.1 million worth of business rates from Doncaster firms in one year

Doncaster Council has written off £2.1 million worth of 'irrecoverable' business rates from town firms who have gone bust.

Tuesday, 24th April 2018, 4:15 pm
Updated Tuesday, 24th April 2018, 4:26 pm
Sports Direct and USC are due to move into the empty unit. Picture: George Torr

The figures were revealed as documents show council finance staff wrote off £46,520 owed to them in business rates from the former Mood bar Priory Walk trading as Mood Private Members Club Ltd. The cash sum was owed to Doncaster Council from September 2015 to June 2016.

The site is currently boarded up and Sports Direct and USC are due to move in later this year.

Because all councils are only allowed to keep 49 per cent of business rates, the figure owed to the local authority stands at £22,800. The other 51 per cent is owed to the Government.

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In a report published by Doncaster Council, finance officer Penny Cobb said: "All attempts to recover the debt have been unsuccessful and as the company is no longer in existence, there is no prospect of the payment being made. It is therefore recommended the debt is written off.

"The implication of not taking this decision is that the level of collectable business rate arrears will be overstated.

"This gives a misleading collection fund position and an unrealistic expectation of the monies that can be collected in the future."

Figures show during 2016/2017, bosses wrote off £2.1 million in rates and around £900,000 was provided to plug the gap leaving a deficit in the council's collection fund.

The decision on Mood Private Members Club Ltd was signed off by senior finance officers and Doncaster mayor Ros Jones on February 28. Documents were made public on April 20.

Current legislation means Doncaster Council are allowed to keep 49 per cent of all rates paid for by businesses - the other 51 per cent is passed onto the Government.

The Government is piloting a new system across 10 councils where they are allowed to keep 100 per cent of business rates.

Any changes would not come into force until 2020/2021.