It was over five years ago that we launched NEXUS, an award winning solution designed to automate the process of identifying properties not currently listed on either the banding list or rating list that should be paying tax. In that time we have identified thousands of domestic and commercial properties which either weren’t paying tax or weren’t paying the correct level of tax, resulting in over £12 million in additional revenue being generated annually for our customers.
NEXUS is the only solution we know of that automates the process of identifying these properties. It does this by comparing numerous datasets which then flags anomalies in data to identify missing properties. Our team of NEXUS investigators then vet these properties, doing a deep dive using a number of publicly available tools and internal tools we have developed to improve search functionality and match accuracy across sites like the VOA property search. This helps verify the properties are genuinely missing from banding or rating lists.
Increasing the property base and revenue for Local Authorities clients
Feedback from our customers has been very positive Amanda Dalton-Jones, Revenues Manager at Bath & North East Somerset Council is a NEXUS customer and commented “NEXUS has helped us significantly increase our council tax base and business rates yield. It makes everything visible to us that we were previously unaware of and does all the investigative work for us, the information it uncovers has been amazing and has proven to be really valuable. Approximately 95% of the cases flagged in NEXUS reports relate to unregistered business properties. These consistently result in new properties being set up and rated, which directly increases both our property base and revenue.”
Typical property types being incorrectly taxed or paying no tax
Building on the successful identification of missing properties for clients, in the last year, we have noticed a number of trends in the types of properties being discovered which are either not paying tax or not paying the correct level of tax.
Nursery Schools
For example nursery schools are increasingly being identified, new ones are cropping up and existing ones are expanding upwards and outwards as they increase floor space to meet demand. This is reflected in recent reports with the government announcing that more than 300 schools will open or expand nurseries this year, creating over 6,000 additional childcare places.
Conversion from agricultural use
Other recent trends we have observed is the conversion of properties that were once listed as agricultural and were exempt from tax. For example old chicken farms being used as storage facilities or having storage containers onsite which are then rented out. For one client in the South of England we identified an agricultural property with a number of outbuildings being used for other purposes, so far 10 out of 14 units have been rated, with a rateable value totalling £126,750. There has also been a significant increase in plant nurseries being opened up to the public and incorporating cafes and other small businesses running from within those premises as well.
Rural area annexes and properties never entered onto banding lists
Annexes in rural areas and properties that have never been entered onto council tax banding list also represent a persistent and often overlooked gap in Local Authority revenue. While each case may appear relatively minor in isolation, collectively they can account for a substantial amount of unbilled income.
In regards to standalone properties that have never been assessed or banded, these are typically individual builds rather than part of larger developments, often situated down long or private driveways and are therefore easily missed by standard surveying. Their low visibility means they frequently fall outside routine detection, allowing potential revenue to go unrealised over extended periods.
Given the cumulative financial impact, these properties should be regarded not as marginal anomalies but as a meaningful opportunity for revenue recovery and improved tax base accuracy.
Flats above commercial properties
Another trend we are seeing is flats being created above commercial properties which are not listed on the banding list. In some cases we have three storey properties with the ground floor typically being used for commerce and the other floors used as storage which are then converted into two or three flats and councils have not been made aware of this change in use.
Slicing & dicing of larger properties
We are also finding a lot of older, larger domestic properties that have either been transformed into 6 or 7 flats or where there is no commercial liability on the premise and they are then let out as self-contained units.
AI enhancements
Since NEXUS was first launched we have significantly increased the data we use, adding extra datasets as well as now making comparisons to historical data so we can identify extensions and adaptations that result on potential changing of bands or rateable value. We use the latest AI technology such as reverse imaging in visual search tools to identify missing and altered properties and have plans for further development of the solution to keep enhancements rolling through that improve our identification methods. We have had clients on board since the very beginning and whom we are still finding missing properties for, such is the fluid nature of property development and alteration.
Generating millions in additional revenue
For those clients using NEXUS Professional, which is a commission based version of the service, we can dedicate much more staff hours to identifying missing properties. In one County, spanning 13 different Authorities we have identified over a 1000 properties in the last year, adding potentially millions in additional revenue and ongoing annual revenue for the years to come.
Find out more about NEXUS at: www.destin.co.uk/nexus
