Maximising revenue from business rates retention pilots before they end in 2020

business rates retention maximisationThere has been a lot going on in the last week or so, so you can be forgiven if like me, you missed the headline news on business rates retention pilots. According to an article in the LGC, business rates retention pilots are to end in all areas except those with devolution deals.

The situation
In essence it was the government’s intention to extend 75% retention to all areas for 2020-21 (except the 100% areas), however, this has now been delayed until 2021-22.  At the same time it has also been announced that the 75% retention pilots will not continue into 2020-21, meaning that the amount of business rates retained locally will drop from 75% to 50% for the pilot areas in April 2020.

The impact
There are going to be some serious financial repercussions for most Authorities, with the Lancashire Post already reporting that Lancashire could be over £10m worse off next year as one of the areas that are piloting 75% retention of any growth in income. Although pilots were only ever agreed for a year, there was a general expectation that 75% retention would become permanent from 2020-21.

Maximising revenue before the clock runs out
With over 100 English Local Authorities impacted by this decision, now is probably a good time to look at how you can maximise revenue in this area before the clock runs out. Some Local Authorities are already ahead of the curve by focussing on driving up collections through the identification of fraud and error in small business rates relief (SBRR). This was following business rates being identified as one of the fastest growing areas of fraud in last year’s CIPFA Fraud and Corruption Tracker (cFaCT).

Additional revenues could run into hundreds of thousands of pounds as has already been highlighted by organisations like the Kent Intelligence Network who have so far reported a rebilling to date of £461,681 due to incorrect/fraudulent SBRR claims. Similarly, Preston Council have pooled resources with Lancaster Council and Fylde Council and have so far put a value on cancelled SBRR at £202,734 with additional estimated future SBRR savings in the region of £88,985.

A national business ratepayer data pooling solution
Using HUB, an award-winning business ratepayer data pooling solution, pilot sites can take advantage of the higher retention rates that still remain in place for 2019-20. HUB works by consolidating and cross-referencing business rates data made publicly available by 99% of all English Authorities and automatically flags suspected cases of fraud, requiring further investigation.

HUB is easily accessed through a secure web portal, requiring no technical support from already stretched Council resources, meaning Authorities can start generating savings and income immediately.

Over 70 Councils are now using HUB, with additional datasets being continually added and reviewed to flag further instances of fraud and increase collection of business rates.  As such, now is a good time to investigate the additional revenue it could help generate in your Authority.

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