Over £100k of unpaid business rates to be written off after fashion store closure

More than £100,000 of unpaid business rates is set to be written off following the closure of a fashion store in Flintshire.

The Outfit store at Broughton Shopping Park was shut for good in January following the collapse of Sir Philip Green’s Arcadia Group.

The shop was home to a number of brands including Dorothy Perkins, Burton and Wallis.

Flintshire Council’s ruling cabinet is now being asked to write off just over £103,000 it is owed in business rates by the company.

It follows the debt being classed as “irrecoverable” after the firm was liquidated in July this year.

In a report to senior councillors, the local authority’s chief governance officer said the recovery of the money was unlikely due to HMRC being classed as a preferential creditor.

Gareth Owens said: “In early 2020, the company announced plans to close multiple stores across the UK and worldwide as a result rising debts and difficult trading conditions.
“The impact of the global coronavirus pandemic also had a significant impact on the company.
“The Broughton retail store ceased trading and permanently closed on 14th January 2021.
“Mazars have now been appointed to oversee the final winding-up process of what remains of the company.
“The liquidation process could take over a year; and with HMRC being designated a preferential creditor and owed in excess of £44m in unpaid VAT, as a non-preferential creditor there is very little prospect of the council receiving any further payment in respect of the outstanding business rates of £103,100.”

Mr Owen said the company initially stopped making business rates payments to the council last year, despite previously paying more than £3.92m since it started trading on the retail park in 2003.

A summons for non-payment was issued by Mold Magistrates Court in September last year, resulting in an agreement for Arcadia to pay £51,300 per month.

Although two payments were made successfully, the firm stopped again in November and entered administration shortly after with debts of more than £800m.

Mr Owens added: “There are no direct financial implications for the council or local taxpayers by writing off this debt as business rates losses are borne by the National Collection Pool for Wales.

“As the collection pool is supported by Welsh Government, non-payment of rates does though have a wider impact on the Welsh taxpayer.”

Cabinet members will be asked to approve the write off when they meet on Tuesday (September 21, 2021).

By Liam Randall – Local Democracy Reporter