Hartlepool councillors call for clamp down on business tax dodgers

Hartlepool Civic Centre.
Hartlepool Civic Centre.

Councillors called for more to be done to tackle rogue businesses that play the system to avoid paying thousands in tax.

Hartlepool council finance and legal chiefs are to look into referring companies that manipulate the system to get out of paying debts, including business rates, to national regulators.

It becomes glaringly obvious when the same people use the same premises to set up the exact same business and even trade under the same name in a lot of the cases

Councillor Paul Thompson

Concerns were raised as the council agreed to write off more than £87,000 of irrecoverable debts, including just over £60,000 of business rates.

The debts could not be collected as the businesses had either been dissolved or gone into liquidation.

Councillor Paul Thompson said referral for businesses believed to be taking advantage of insolvency to avoid paying debts should be referred to the Insolvency Service and Customs House in a bid to get directors struck off.

He said: “We are talking thousands and thousands every year that we are unable to collect because they are playing the system.

“It becomes glaringly obvious when the same people use the same premises to set up the exact same business and even trade under the same name in a lot of the cases.”

The authority’s chief solicitor Peter Devlin told a meeting of the Finance and Policy Committee new provisions had been brought in for greater transparency of corporate entities.

He said he would speak to he council’s chief finance officer Chris Little to explore what action could be taken.

Coun Jim Lindridge said: “I fully agree with Councillor Thompson. It’s ridiculous if they are getting away with it.”

Coun Paul Beck asked if the council had the power to seize assets from companies and what the cost would be to the local authority.

Mr Little said companies that have gone into liquidation have no assets.

He said: “HMRC trumps everybody in terms of getting that money first and invariably they don’t recover 100% of what’s owed to them and we are further down the line unfortunately.

“All I can assure members is we take every effort that we can to recover.

“It is frustrating for ourselves and we share your concerns.”

He added: “All we can do is issue the bills and take as robust action as we possibly can, that can involve using bailiffs to seize goods.

“But some of these people will play the system.”

The council collects around £34.7 million in business rates a year and in 2015-16 collected 98.3% of money owed.

Coun Kevin Cranney, deputy chair of the committee, said it was important to recognise the authority’s high collection rate.

He added the council needed to do everything it could to support new businesses to grow.