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Business rates evasion investigation launched into Oxford Street sweet shops

Posted on 16 June 2022

Anyone who has visited Central London recently will have noticed that US-themed confectionary and souvenir shops have sprung up in the streets of many of the popular tourist areas. These brightly coloured shops have also caught the attention of Westminster City Council's trading standards team. It has warned landlords whose premises are occupied by such businesses that they could be liable for uncollected business rates if the tax is not recovered from the businesses themselves.

Council officials are also concerned about the sale of out of date food, counterfeit chocolate bars and allegedly unsafe vapes by these businesses.

Westminster City Council has announced that it has so far issued warning letters to 28 landlords in Oxford Street that lease their properties to such businesses to make them aware that they could be held liable should their tenants or licensees be found to be evading business rates.

Another issue for landlords

Even property owners in Britain's most well-known high streets have struggled in recent years and have been impacted by COVID-19.Areas such as the iconic Oxford Street have also been hit by the resultant fall in the number of tourists. One impact of this has been the liability for freeholders or long-leaseholders for business rates of premises which are vacant.

However, concerns are growing that some businesses, in this case US-style candy shops, are taking advantage of this by entering into short-term licences to occupy a premises without paying business rates or expecting to be held liable for this. Westminster City Council is now warning that, where the amount due cannot be collected from the occupying business, because, for example, the business entity cannot be established, the freeholder or long-leaseholder of the property will be held liable for the amount due.

Westminster City Council has announced that the crackdown on these types of businesses has led to about £474,000 of counterfeit and illegal goods being seized from these outlets in the past six months. Where the premises are advertising illegally, civil enforcement proceedings, including planning enforcement action, are also being initiated. The council has warned it is aware that these businesses may have committed other offences as well. The possibility that these properties are being used to evade business rate bills is the latest angle being used by the council and based on the council's response to trading standards breaches, enforcement may soon follow.  

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