ALMOST one in 10 of Herefordshire's shops, offices and warehouses would be empty in 2019-20, it was forecast... costing local taxpayers nearly £2m.

And last year saw the lowest intake of business rates for Herefordshire Council in five years, new figures from the council reveal.

Analysis shows that local councils across Britain will miss out on £1b of much-needed money this year because of closed businesses.

It is a big issue because councils are becoming more reliant on the money they get from business rates.

That's because their main source of income historically, government funding, has been slashed over the last 10 years under the government's austerity drive.

When a business shuts the landlord does not have to pay business rates for three months. The idea is that this tax relief gives owners time to reinvest and find a new occupant. But it also means it is hitting the income of the local council.

In Herefordshire the council raised £45.5m in business rates in the last financial year, 2018-19. That was a drop of £900,000 on the previous year and £2m lower than the year before.

It fact it was the lowest amount since 2014-15, when it had plummeted to below £42m.

In 2018-19 empty premises cost £1.8m in lost income, and the forecast is very similar for this financial year (to the end of March).

The council expects 780 of the 8,280 business premises to be empty, which is 9.42 per cent. Councils do not keep all the income; about half goes to the Government.

Businesses are campaigning for cuts in business rates to ease the burden on firms in tough trading conditions, while local councils would like to raise rates to help fund services.

Dr Kevin Muldoon-Smith, an expert in property tax, said business rates were critical to the stability of local authorities going forward.

"We have this perverse situation where local government needs tax to go up and the business community are lobbying very hard for it to go down."