A developer that dropped out of plans to convert a derelict building into almost 200 flats has evaded paying over half a million pounds to a cash-strapped council because it is registered offshore.

Rally Century Ltd owe hard-hit Halton Borough Council £550k in business rates, but the local authority have no legal powers to retrieve the funds because the company is registered in the British Virgin Islands.

The overseas territory is outside the UK Court’s Jurisdiction and means liability orders to retrieve the debt can’t be enforced.

The shocking state of affairs was revealed at a Corporate Policy and Performance Board (CPPB) meeting on Tuesday, when a concerned councillor read out an email he’d received from council officers after enquiring about the matter.

The debt relates to Castle View House – an empty building in Runcorn that was owned by Rally Century between 2015 and 2017.

The company were granted planning permission to build 188 flats at the site in 2015, but sold it two years later before work was completed.

Ahead of the CPPB meeting, Cllr Alan Lowe had asked officers if outstanding business rates owed by Castleview House been paid, and if not, what was being done to collect them.

He said he received the answers in an email but wanted to make members on the board aware of the response he received – which included some alarming figures.

The email, which has been seen by the Local Democracy Reporting Service, said: “The company that previously owned Castleview House (Rally Century Ltd) are registered in the British Virgin Islands. Business rates totalling £550k remain outstanding from November 2015 to April 2017 when it was in their ownership. This debt is subject to liability orders, but as they are registered offshore it is outside the UK Court’s jurisdiction and so we cannot enforce the liability orders.”

Castle View House was sold for £900,000 in 2015 – a figure which caused controversy at the time.

The former Department for Education (DfE) building had closed a few years earlier, resulting in some 400 civil servants losing their jobs or being displaced to Manchester.

Halton Borough Council revealed they had tried to buy the office building but said this was blocked by the government, who sold it to the private developer for a price that one councillor blasted as “peanuts”.

The building is one of three in the immediate area with planning permissions in place for 700 flats, but concerns have been raised by councillors over the slow progress of these developments.

Castle View House was bought by a different developer in 2017, who applied to build 241 residential units at the site.

The site is on East Lane, a key area in the Runcorn ‘Healthy New Town’ masterplan which is seeking to completely re-vamp the run down the Halton Lea neighbourhood.

Draft proposals of the Healthy New Tow, which were unveiled last year, said the residential conversion of the former office building was finally underway, although it is unclear at what stage the development is at.

At Tuesday night’s meeting, it was revealed all 241 properties at Castle View House are included in the council tax register and liable for council tax.

Cllr Lowe had been asking how many dwellings in Castle View House are now paying Council tax or the empty homes premium.

The committee heard that the properties were registered from various dates from April 2018 onwards, which means the first ones (if any) to incur the empty homes premium will be in April 2020, when the premium starts to apply.

At the same meeting it was revealed there are currently 605 long term empty properties in the Borough (empty for 6 months or more) and 150 of the 605 are currently subject to the empty homes premium (having been empty for over 2 years).