100% business rates retention – are you ready?

business rates retentionFirst published as “Are you ready for 100% rates retention?”  in the April 2017 edition of IRRV Insight magazine.


With the 2017 NNDR revaluation and the government’s promise of Councils retaining 100% of all business rates by 2020, collection of Non Domestic Rates should be a key focus for Councils in the years ahead. This may prove challenging, as Richard Harbord, past IRRV president has previously commented “there was a real loss of interest in business rates in 1990 and many councils have not increased their expertise in this area since that time.”

With this loss of interest came loss of staff and key skills, but with the threat of revenue support grants and funding being removed and replaced with 100% rates retention, there is certainly now the impetus to drive greater understanding and invest once again in this area. Preston and Lancaster Shared Service (PALSS) are one such authority focussing on this area. Following a series of investments in property inspection and data analytics technology, they have laid the foundation for investing in a solution which now gives them greater insight into businesses and commercial entities in their area.

Leveraging external data
A key element of this has been their understanding of the value of data, not just the information they hold internally but supplementing this and using it alongside independent, third party data. Using external data sources they are now able to pull through additional data on the commercial properties and business entities under their remit and cross reference this with their existing collections and balance information. They effectively have a snapshot of the health, wealth and trading statuses of all the businesses in their area along with a list of all the Directors associated with those businesses.

Using this data, they can now view through a series of reports; businesses by size of debt, business debts by organisation type, location and also by the credit rating of the business. Reports can also indicate businesses with an ongoing liability which are in fact dissolved, insolvent or no longer trading. This information will ensure PALSS has more accurate, up to date information on not only the level of debts but also the stability of the business.

Data accuracy of Business Rates payers
Accuracy of the data held about a business is also key to the collections process. PALSS now have the capability to pull through up to date contact information for a business. This is all held and viewed centrally in one system which updates daily to provide the latest information available along with credit alerts which may require action or attention.

Their solution will also enable them to drill down on last payments made by businesses and again cross reference this against any variances in credit ratings. Where significant rating drops have occurred and that business has not paid for a prolonged period of time, PALSS can more easily identify risk and apply a more proactive collection approach.

The 2017 revaluation has had implications across a number of different market sectors and the solution PALSS have implemented enables them to view a company’s trading information in the context of the sector they operate in as a whole. This will ensure PALSS can start analysing trends to identify for example if they are seeing a sudden dip in credit ratings associated with the pub or retail sector for instance. This may indicate potential issues for this sector in future and gives them the option to take action now.

Julie Smethurst, Revenues Manager within the Revenues and Benefits Service at Preston and Lancaster Shared Service comments For too long Billing Authorities have been dealing with NNDR debts in a reactive way, which has invariably resulted in us being last in line when it comes to payment. By improving the data and information on businesses in our area, we believe we can begin to work in a more proactive way and identify issues before they become a problem, putting us in a far better position to maximise the benefits of full rate retention.”

Plans for future development
Future development of the solution is focussed on predictability of the portfolio throughout the year so that this can then be reviewed year on year, this will enable PALSS and other Authorities to work smarter on cases. It will effectively enable them to predict which cases are likely to follow the same path as they have done in previous years.

Going forward the solution will also be able to identify where cases are in the process, alongside the debt level at that time. This will ensure that quite quickly Authorities can start assessing the ‘action to outcome’ strategy at their end, for more informed decision-making.

Within the system, flags will also be set to identify rogue Directors or registered offices which appear suspect. These will act as key triggers when assessing customers and taking this a step further this pattern will then be overlaid across different market sectors, so Authorities can assess whether there is a propensity for fraud or suspicious activity in specific sectors which merit further investigation.

Rates avoidance
In conclusion the data PALSS have access to has far-reaching uses and not just in the context of revenues, it can assist with economic development and analysing the stability of businesses in their geographic region. It puts more control back in the hands of the Authority by providing a greater insight into business trends and enabling them to be more proactive in the recovery of debt. With rates avoidance estimated at around £3bn according to a session hosted by David Magor, Chief Executive of the IRRV way back in 2015, the business of rates retention is now more important than ever.

If you want to understand more about how this technology is working in practice contact Destin Solutions on info@destin.co.uk or call 01772 842092.

Contact Us


Browse our selection of brochures for more detailed information on each of our products.