A COUNCIL has been forced to write off more than a quarter of a million pounds in ‘uncollectable debts’ – the majority of which are down to just one company.

Test Valley Borough Council recently approved plans to wipe out £257,679 in unpaid business rates debts, accrued by two companies between 2008 and 2015.

Of that total, nearly £220,000 was owed by Mytham Ltd.

The Advertiser understands that the now-dissolved company occupied part of Grove Business Park, in Romsey, and accrued the debts on 10 ‘accounts’ between 2009 and 2015.

TVBC issued Mytham Ltd with a statutory demand in 2013 – a formal way of asking for money from a company or individual – but received no response.

The council later looked into the possibility of starting winding-up proceedings against the company.

However, after speaking with enforcement agencies and carrying out property inspections, the council discovered that the company had ‘no assets’ that could be used to settle the debts and therefore decided against legal action.

Mytham Ltd was then dissolved, in March this year.

With the authority unable to collect the money, council chiefs submitted plans to write off the debt, which were agreed by the cabinet earlier this month.

At the meeting, councillors also agreed to write off more than £38,000 worth of debt which was owed by Import Supplies Direct Ltd.

The now-dissolved company racked up the debts between 2008 and 2013, while occupying a unit at Belbins Business Park, Romsey.

On that occasion, the council did take legal action, obtaining a Liability Order through the magistrates’ court.

However, the authority admitted that enforcement agents were unable to recover debts on “several occasions”.

The company was dissolved in June this year, leaving the council unable to recover the debt.

Of the £250,000 worth of debts, TVBC says that the actual cost to the authority is expected to be around £22,000 this year.

This is in part due to other organisations sharing the cost of the debt.

However, the council says that it is also due to its success in growing the amount of business rates above its baseline position in recent years.

Where growth is achieved, the council receives 50 per cent of the business rates above the baseline income.

The council can use this to balance out the loss.

TVBC’s economic portfolio holder, Councillor Peter Giddings, said: “When setting its budgets each year, the council makes an allowance for current and predicted non-collectable business rates.

“The allowance is a small percentage of the business rates we collect.

“This acknowledges that there will be some businesses that are unable to pay, leaving the council in a position where it has to write off debts.

“Although this is frustrating, the amounts written off in last month’s cabinet report can be fully contained within this allowance and therefore there is no additional negative impact on the council’s budgets,” he added.