Over thirty American-style sweet shops are currently under investigation after it has been discovered that they've potentially cheated the system out of nearly £8m in business rates
The shops themselves have had their stock withdrawn by Westminster council, with nearly £500,000 worth of vapes, souvenirs and confectionary seized during the last six months.
While the shops themselves appeared to be trading legitimately, it's believed that they were in fact fronts that allow the property owners to avoid hefty business rates bills by cashing out on relief schemes intended to support businesses through the pandemic.
How is this possible?
It's all to do with how certain relief schemes work in the UK. As it stands, commercial properties can be empty and free from paying business rates for three months, but after that, they will be liable for business rates much like any other operational commercial property.
Landlords are believed to be letting out their properties to intermediary license holders, who are then subletting the property to the sweet shops. The paper trail of this becomes more difficult to follow, resulting in the unpaid business rates bills.
Oxford street is the UK's premier shopping street, with properties on the street easily topping rateable values of £700,000 per year. During the high street crisis, many of these properties lay empty yet still liable for business rates
While the scandal itself has not been doing the highstreet any favours, it does highlight issues with our fundamentally flawed business rates sector. If poor account management and a choppy business rates evaluation system can lead to such large discrepancies, how is it that business owners can feel confident that their business rates are in safe hands with the council?
Business rates agents like ourselves are working continually on ways to mitigate our clients' business rates, within the scope of the law. And for many of our clients, our work has resulted in comparable savings that have helped businesses stay afloat during the pandemic.
We keep up-to-date with schemes offered at a local and national level to ensure our clients' business rates are kept low. The West end pop-up scheme offered by Westminster Council, for example, could have helped reduce business rates liability for Oxford Street Landlords by 70%.