City of Edinburgh Council Finance and Resources Convener Cllr Mandy Watt writes in today's Edinburgh Evening News.
Recent investigative journalism has turned the spotlight on some Princes Street shops that appear to be avoiding paying the taxes they’re due.
Residents pay council tax to support their city, and similarly, businesses are expected to make their contribution by paying non-domestic rates. The vast majority play by the rules, paying these rates in full and on time - but we’ve heard that some unscrupulous businesses on Princes Street are failing to pay their way.
Nobody wants empty shop fronts, especially in Princes Street, so it’s important that honest businesses don’t feel that they’re being under-cut by tax avoiding traders. Shopping habits may have changed but Princes Street continues to draw customers and only London has a higher occupancy rate than Edinburgh’s city centre.
High occupancy means a healthy city centre, which offers more employment and better economic returns. And it also means more money put back into the public services we all rely on. That’s why Council officers investigate cases and target rogue businesses, by using the enforcement powers that the council has and by working with our partners in government and the police.
I’m determined to make sure our current procedures for collecting unpaid rates are as strong as they can be, and that every possible action is taken to recoup any lost income. That is why, at Finance and Resources Committee last week, I asked Councillors to vote with me to explore what more can be done to disrupt tax avoiding businesses.
Recent investigative journalism by the Edinburgh Minute and London Centric shines a light on this and the apparent increase in ‘phoenixing’ across the UK. This is when a business continues to trade but has been deliberately made insolvent and taken over by a new legal owner, enabling past debts and taxes to become uncollectable.
This is a serious local issue - but it also looks to be a national problem, with similar fraud suspected across the country.
The council’s powers to act against ‘phoenix’ traders are limited, so we are relying on HMRC and the Scottish Government to take further actions towards enabling a zero-tolerance approach to such fraud.