The Foreign Office has confirmed that diplomatic missions and embassies from around the world are refusing to pay more than £1.5 million in business rates despite the tax directly funding their own street cleaning and lighting.
Diplomatic representatives from foreign countries are officially exempt from all national, regional or municipal taxes for their buildings, however, the Government encourages them to pay a “beneficial portion” of their bill, which equates to just 6% of what any other business would pay in business rates.
The Foreign Office has now ‘named and shamed’ 23 foreign embassies and diplomatic organisations that each owe over £10,000 in business rates which should have been paid 12 months ago.
As at 20th September 2018, the total amount of outstanding business rates, due for payment before 31st December 2017, owed by foreign diplomatic missions and embassies, was £1,507,576, a year on year increase of 43%.
The amount owed is £457,577 more than the £1,049,999 owed the year before with over £70,000 of the debt owed by Syria and unable to be pursued for collection.
The Commonwealth Secretariat, headquartered at Marlborough House, the main intergovernmental agency and central institution of the Commonwealth, to which the Queen heads, owes nearly £20,000.
Embassies from Qatar, Ukraine and Egypt all have so far refused to pay their business rates as have the High Commissions of Malaysia and Pakistan despite demands from officials at the Foreign Office.
Robert Hayton, Head of U.K. business rates at real estate adviser Altus Group, says: “Many of these embassies operate from prime Central London real estate and are actively dodging their tiny tax contributions. Businesses across the Capital who saw their Rateable Values used to determine rates bills rise by 23% overall will, undoubtedly, be disappointed.”