From this weekend's Herts & Essex Observer -
UTTLESFORD District Council has agreed to write off more than £1m in business rates owed by a luxury company at Stansted Airport – but is pressing ahead with legal action aimed at winding the company up.
Eighteen Aviation Ltd, which trades as Aero Toy Store, defaulted on its 2012-13 liability of £1,155,066.48.
The council took recovery action and legal proceedings against the firm, which is the second largest business ratepayer in the district, providing VIP accommodation and garaging facilities for private jets and their owners at its 18-acre Diamond Hangar site.
But the local authority has been advised that as there is no prospect of recovering the debt, it is necessary to write it off. The decision was taken "reluctantly" at a meeting in Saffron Walden of the council's cabinet last night (Thursday).
UDC is continuing with legal action aimed at winding the company up to stop it trading and prevent further irrecoverable funds becoming due.
The council says that writing off the debt will not result in any direct financial implications for council tax payers or for the authority itself.
However, the firm’s failure to meet its financial obligations will result in less money being available to UDC, Essex County Council and Essex Fire Authority in 2013-14.
Stephen Joyce, the council’s assistant chief executive, said: “This is a massive loss to the public purse, but because the money is from 2012-13 it affects central Government funds rather than our own budget.
“What it does mean is that public services and Government spending will be affected. It will have an effect on Uttlesford, but not a significant one.
“The Government has a safety net scheme which ensures district councils do not lose a significant amount of money.
“The most we could lose is about £100,000, so it protects us from a large loss, but nevertheless it is still a loss to the taxpayer and that’s very disappointing.”
Mr Joyce added: “This is a genuinely unprecedented case – we’ve never had anything like this before and will be taking steps to make sure it doesn’t happen again.”
Cllr Robert Chambers, UDC’s portfolio holder for finance and administration, told Thursday’s cabinet meeting he intended to raise the case with the Government’s Department for Communities and Local Government.
Richard Elliott, an associate in the corporate department of west London law firm Davenport Lyons, which is acting for the business, said: “Eighteen Aviation is aware of the decision of Uttlesford District Council and is working with its advisers on the matter and is in touch with the council.”
UPDATE Council legal action to wind up Stansted aero firm over £1.15m debt | Uttlesford village headlines