Massive rise in unpaid taxes written off

New data reveals how £110,000 of unpaid taxes were written off between October and December last year, compared to £43,000 in the previous three-month period.

The findings coincided with an economic nosedive, with GDP (gross domestic product) -0.3 per cent in the 12-week run up to Christmas.

Of the new write-offs, £105,000 of it was because of seven businesses not being able to pay, while £5,000 was from a householder. Although the exact reasons for each write-off is never made public, most business write-offs are down to the firms going bust.

The write-off means all the relevant bodies which benefit from taxes and business rates take a hit on their balance sheets – including the city council, fire and police services, and County Hall.

Councillor Andy Roberts, the cabinet member for finance, said: “If we didn’t write off bad debts in this way they would stay on the balance sheet and we’d end up looking extremely well off, which is not the case.”

A report on the move, which was accepted by the Conservative cabinet, said written records on each write-off are kept on a database and can be reinstated if any new details come to light allowing the debts to be chased.

Reasons for people not paying council tax can vary, but it can include residents moving away, householders dying, and those who refuse to pay, who are liable to be prosecuted. The latest findings follow the previous two financial years, when more than £1 million was written off in Worcester.

In 2011/12 the figure was £297,000, while in 2010/11 it was £760,000, when bosses decided to lump a series of historic unpaid taxes together.

About 98 per cent of taxes owed to the council were collected last year, a small improvement on 2010/11.

The figure compares well to other town halls, with the national average one per cent lower.

Overall, in Worcester, £48 million was handed over in council taxes and £37 million in business rates last year.