Businesses in The Lexicon are clawing back millions of pounds of tax from Bracknell Forest Council – just as the council is in desperate need of cash.

The council is having to pay out up to five years’ worth of business rate refunds to more than 20 companies through no fault of its own. It is a “double whammy” that will hit the council’s pockets for years to come, according to top officials.

Council leader Mary Temperton said the refunds are “going to a number of significant businesses in the borough totalling several million pounds.” She added: “This will also reduce our income for the years ahead.”

The refunds are the result of appeals by several businesses to reduce the amount of tax they owe in business rates in Bracknell since 2017.

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Similar to council tax, companies have to pay business rates to councils based on the value of buildings or office space that they occupy.

But unlike council tax, the amount they pay is based on an assessment of the property’s value by the government’s Valuation Office Agency, which takes place every five years. And the council only keeps some of the money it collects, passing the rest on to the government.

Businesses can appeal to the government if they think they should pay less – but councils are only informed if the appeal is successful.

Bracknell Forest Council says it has been unexpectedly hit after a “pattern” emerged earlier this year of businesses in the Lexicon appealing against their valuations.

Successful appeals by more than 20 businesses – many in The Lexicon – mean the council has to pay back money collected as long ago as 2017.

READ MORE: Bracknell Forest Council could sell properties to cope with budget

Stuart McKellar, the council’s director of resources, said: “The consequence of that is we are having to repay a very significant sum – many millions – in the current financial year.”

He added that the revised rates also mean the council will now collect less from business rates than it had expected to in the coming years.

And he slammed the “broken system” that means appeals often come at the end of a five-year ratings period. Mr McKellar said this happened because some firms offer to make appeals on behalf of businesses during this time so that they can keep a proportion of the higher refunds.

Mr McKellar said: “It encourages rate payers to submit appeals towards the end of the process because that is actually how they make their business.”

He added: “It’s a double whammy. It’s something that is completely out of our control. The whole system is broken.”

Bracknell News is awaiting further information from the council on which businesses have successfully appealed and how much is to be refunded.