Foreign embassies fail to pay business rates tax to the tune of £1 MILLION, EVEN THOUGH they already get 94% discount

Thursday, October 12, 2017

Yesterday, the Foreign Office has updated Parliament in the House of Commons that 20 foreign embassies across the UK are refusing to pay their share of business rates tax which directly funds their own street cleaning and lighting. The list of those ‘named and shamed’ owe over £10,000 in business rates tax with the amounts due ten months ago.

As at 8 June 2017, the total amount of outstanding National Non-Domestic Rates (NNDR) payments, due before 31 December 2016, owed by foreign diplomatic missions as advised by the Valuation Office Agency is £1,049,999, an increase of 16% over the 2015 figure.

This is £142,023 more than the £907,976 owed this time last year, with struggling businesses funding the deficit.

Over £50,000 of the debt is owed Syria and is unable to be pursued for collection.

Business rates are a tax charged on all commercial premises based on the rental value assessment, which is determined by the Valuation Office Agency. The Revaluation of business properties usually happens every 5 years but was controversially delayed by 2 years as a result of the economic downturn. The last Revaluation came into effect on 1st April 2010 based on the property market as long ago as 1st April 2008.

Our data shows that high street firms are facing astronomical hikes in tax over the next 5 years, with shops having to front an additional £1.8billion, restaurants almost £500million and pubs £362million. Like for like, offices across London, in which the vast majority of Embassies operate from, but which are liable for rates tax are facing a 5 year tax hike of £1.37bn after seeing their property assessments rise by a massive 32%.

Diplomatic representatives from foreign countries are officially exempt from all national, regional or municipal taxes for their buildings, however, the Government encourages them to pay a “beneficial portion” of their bill, which equates to just 6% of what any other business would pay.

The 20 embassies owing money to the taxman are;

Embassy of the Republic of the Sudan

£109,599

High Commission for the People’s Republic of Bangladesh

£107,427

Embassy of the Islamic Republic of Iran

£104,688

Embassy of the Republic of Zimbabwe

£79,852

High Commission for the Republic of Zambia

£39,081

Uganda High Commission

£36,885

Embassy of the Republic of Angola

£32,273

Embassy of the Republic of Liberia

£29,559

Embassy of the Federal Democratic Republic of Ethiopia

£28,652

Embassy of Libya

£26,186

Embassy of the State of Qatar

£25,890

High Commission for the Republic of Cameroon

£25,126

Embassy of the Republic of Albania

£24,165

High Commission for the Democratic Socialist Republic of Sri Lanka

£23,846

Embassy of the Arab Republic of Egypt

£23,120

Embassy of Ukraine

£15,675

High Commission for Sierra Leone

£14,641

Embassy of the United Arab Emirates

£13,866

Embassy of the Republic of Côte d’Ivoire

£13,098

Embassy of the Republic of Lithuania

£12,359

 

Many of these embassies are operating from prime London office space and are actively dodging their small tax obligations. Offices across London have seen their business rates rise by 31% and will undoubtedly be dismayed by yesterday’s news.

The ministerial announcement also reveals that the value of unpaid Congestion Charge debt incurred by Diplomatic missions and international organisations in London alone now stand at over £100 million.

The Embassy of the United States of America has incurred the most fines, 96,274 and owes over £11.5million in debt to Transport for London.