City of Westminster (Parliament Politics Magazine) – Westminster Council discovers offices with boxes of snails, uncovering a ‘bizarre’ attempted business rate avoidance racket, and vows to take action.
Officers from Westminster City Council discovered boxes in West End workplaces that were said to contain snails.
Teams from the Revenues department of the council visited Old Marylebone Road office addresses.
There were comparatively few sealed boxes claiming to contain snails in the offices.
According to Westminster Council, this is a persistent problem in both buildings.
It considers the argument that a commercial property is a snail farm and, as such, free from business as a “fish farm / agricultural use” property to be an attempt to evade paying business rates (NNDR).
Under the Rating Law, properties used as fish farms or agricultural buildings are exempt from commercial rates.
The council must go through the legal formalities of winding up the shell company that is occupying the office space, even though the scammers are aware that the Valuation Office, a central government department, will never give an agricultural business rate exemption.
The landlord is exempt from paying business rates and may be viewed as complicit in this arrangement as the council is required to hold the property’s occupant accountable for paying them.
Four snail enterprises have already been shut down by Westminster City Council for failing to pay business rates.
It is currently attempting to shut down two more businesses, Wessex Associated Trading (A25) and Snai1 Primary Products 2024, for failing to pay rates.
The Council is in addition asking the Insolvency Service to investigate whether the directors of these companies should be disqualified from being a director of any future companies.
Cllr Adam Hug, leader of Westminster City Council, said:
“This latest raid vividly illustrates an issue of business rates avoidance based on the ludicrous notion of snail farms which we have raised with central Government before.
In the last fortnight we have discovered more boxes of snails in empty office buildings in Westminster so there is little sign of this racket slowing up.
Rather than unscrupulous traders dropping on one avoidance scheme after another, it would be good to see a general clause on business rates avoidance and evasion which stops these kinds of activities in their tracks.
As a local authority with limited resources, we enforce wherever we can. We will be on the trail of the snail racketeers or anyone else who thinks they can cheat the taxpayer.”
What legal penalties can those firms face for rate avoidance?
Authorities can demand payment of all overdue business rates with interest and penalties dating back to when the avoidance began. The council can put significant forfeitures for fraudulent exertion and failure to pay due taxes. Penalties increase if elusion is deliberate or involves deception.
In cases of deliberate fraud or deception, enterprises and individualities responsible may face execution under fraud laws, which can lead to felonious records, and imprisonment. Councils may take civil recovery conduct, including seizing means or property, to recover overdue finances.
Directors set up tête-à-tête responsible for duty elusion or fraud can be disqualified from holding company directorships for a period. Westminster Council’s crackdown on the crawler ranch rate avoidance indicates its intent.