A Chichester tea room owner refused to pay part of his business levy because he said the company in receipt of the money was changed without informing businesses.
Chichester District Council, which collects the levy on behalf of the Chichester Business Improvement District (BID) has taken Michael Schneider to court to force him to pay.
The latest hearing in the case was at Worthing Magistrates’ Court yesterday.
Michael Schneider owns JVoke Vintage Tearoom in the Hornet, Chichester.
Prosecuting on behalf of the council, Giusj Dilauro said: “Mr Schneider is liable to pay the BID levy.
“The BID levy is applicable to all those business in the BID area and Mr Schneider has a business in the designated area.”
But Mr Schneider questioned whether it is lawful to demand that he pay the levy following a transfer of BID levy spending to a new company in 2017.
The council came to court seeking £209.66 from Mr Schneider, including £34.66 for part of 2016-17, £125 for 2017-18 and a £50 summons charge.
Mr Schneider yesterday agreed to pay the £34.66.
The court heard how businesses voted to renew the Chichester BID for five more years from 2017.
In principle the Chichester BID is similar to others around the country. with local businesses paying an extra tax to fund improvements in their area.
During the first five years of the Chichester scheme, funds were managed by a community interest company (CIC) called Chichester City Centre Partnership, the court heard.
However in 2017 shortly after businesses voted to renew the BID this was transferred to a limited company called Chichester BID Limited.
Asked about the change, Chichester BID chairman Colin Hicks told the court that the change to a limited company was for tax reasons.
The prosecution admitted that this change had likely been made without members being notified in writing.
Mr Schneider said he had leafleted every business in the area, asking them: “Did you know that the BID company you have voted for is not the BID company in receipt of your levy payments and they are totally independent companies?”
Addressing the judge, he said: “The bid payers did not vote for Chichester BID Limited.
“They voted for a renewal of their five year term, to be administered by the Chichester City Centre Partnership and that was explicitly mentioned running up to the ballot.
“The term Chichester BID is used interchangeably, intended to deceive the BID levy payers that it was the same company running it for another term.”
In her closing statement, Ms Dilauro said Mr Schneider is liable to pay his levy.
She added: “There is a lawful agreement between the council and the BID levy company in relation to who collects the BID money.
“If you assume that the notice hasn’t been sent that is not a reason for Mr Schneider or any other BID payer not to pay.
“We say this is a technicality now. It is a matter of amending the agreement.
“We say that they are still liable for the BID levy.”
The case was adjourned to Friday, when a verdict is expected.
The trial continues.