Leeds tax takings set to shrink by £43m due to Covid, council claims
Leeds is bracing itself to miss out on more than £40m in council tax and business rates money, due to the Covid-19 pandemic.
The council’s collection fund, which includes money raised from council tax and business rates, estimates a shortfall of £43.9m for the 2020/21 financial year, which is expected to impact on council finances for the next three years.
A report, set to go before a committee of councillors next week, stated: “The current estimates for collection rates of council tax suggest that the collection rate will fall to 94 percent from a target of 96.11 percent, equating to a further reduction in expected in year income of £8m after the application of £8.9m of Hardship Grant funding which has reduced the bills of Council Tax Support recipients.”
When added to the rest of the expected shortfall for council tax, this would see the authority lose out on £22,348,000 of its expected £370.8m council tax takings.
On business rates, the report added: “The position is more challenging as one might expect given the impact the pandemic has had on businesses, particularly in the hospitality sector.
“The current estimate for the non-collection of business rates income stands at £20.9m but this is expected to improve to £16.7m in the fullness of time, recognising that not all income is collected in year.”
The council said it had agreed to a number of deferment arrangements for both residents and businesses in relation to the payment of council tax and business rates, meaning some made no payments in the first three months of the financial year instead spreading the cost of their bill over the remainder of the year.
The report will be discussed by Leeds City Council’s strategy and resources scrutiny board on Monday, November 16.