Plans to write off a business rates debt of nearly £100,000 will go before Southwark’s cabinet next week (January 19). 

A report published this week seeks approval from cabinet to write off a debt of £92,397.63, owed by a single business, which is “deemed irrecoverable” by the council. 

National Non-Domestic Rates (NNDR), or business rates, are a form of local property tax.  

They are collected by councils from businesses to contribute towards the cost of local services. 

The council can decide to write off debts for several reasons, including if the cost of collection is greater than the debt, the debt is time limited, or the debtor cannot be found or is dead. 

Debts can also be written off if they would put someone in serious financial difficulty or if they are bankrupt.  

In this instance the business that owes the debt has gone bankrupt and is no longer trading.  

“The ratepayer in Appendix 1 (of the closed report) had been declared bankrupt and has no assets.  

“In such circumstances, there are no means available to successfully pursue the debt,” according to the report.  

In a foreword to the report, the cabinet member for finance and resources Councillor Rebecca Lury said: “Historically, collection rates in Southwark have been very high with a performance in 2019-20 reaching 99.7 per cent.  

“Last year’s performance was among the very best in London further demonstrating the council’s diligence and effectiveness in collecting business rates.  

“However, as with all forms of taxation, there will be exceptional cases where NNDR due cannot be recovered, and the council has well established and robust policies for dealing with such situations including writing off debts where all other options have been exhausted.  

“The cost of business rates write offs is shared by the council, the Greater London Authority and the Government and are contained within the council’s bad debt provisions.” 

The name of the business in question has not been made public.