Business rates constitute a significant portion of local authority funding. Proposed changes to the retention of business rates by local authorities mean that the amount of business rates collected has an ever increasing impact on council budgets. Currently local authorities retain 50% of rates collected however there are proposed plans to increase this to 75% rates retention in 2020 with several authorities are piloting a full 100% rates retention scheme.
As well as collecting business rates it is also vital that local authorities have adequate safeguards in place to ensure that all exemptions and reliefs are awarded correctly as fraudulent claims deprive the authority of much needed funds. Nationally, business rates fraud is on the rise and is the largest developing area with an estimated value of £10.4 million for 2017/18 compared to £7 million in 2016/17.
Some examples of business rates fraud include:
- Making false claims for Small Business Rate Relief or other exemptions or reliefs.
- Failing to report changes e.g. increases in RV, when a business closes or taking on other business properties.
- Claiming a council tax discount/exemption on a property being used for business purposes e.g. holiday homes, shops etc.
- Contrived tenancies/leases to obtain an exemption or relief.
- Refund scams involving stolen credit/debit cards.
 CIPFA Fraud and Corruption Tracker Summary Report 2018, page 10.