Councillors have vowed to chase people who owe more than £8m to the council.
But Kirklees Cabinet yesterday formally noted the bad debt write-off of £8,062,817 from the council’s accounts due to the financial implications.
The council believes the money will not be received due to people dying, companies going bankrupt or people unable to pay council tax bills.
Clr David Sheard, the council’s deputy leader, said: “I want to emphasise that this doesn’t mean we won’t get paid. This is a financial procedure.
“If we find them and we find out they’ve got some money we do all we can to get it. If Lazarus owed council tax and he showed up we’d find a way to recover it.”
He said firms declaring themselves bankrupt and re-starting was one problem they were encountering.
The Examiner reported details of the bad write-offs early this summer and yesterday Kirklees Cabinet had to note the write-off element of the accounts.
Financial procedure rules authorise Directors to write off all individual bad debts subject to the approval of the Director of Resources, David Smith.
Failure to comply with the accounting and audit regulations could result in the council’s accounts receiving a qualified audit opinion, which would be damaging to the council’s financial reputation.
Much of the ‘bad debt’ relates to unpaid business rates of £3,913,827 in 2012/13.
Kirklees Council collected the business rates on behalf of the government so the £3.9m did not affect the council’s budget.
The remainder of the £8m relates to £2m in housing, and £1.6m in council tax. The council says 99% of its council tax is eventually collected over time.
A further £460,000 relates to directorate losses, £1.2m is attributed to people who have died and £1.3m is the result of companies which have entered liquidation.
The Corporate Governance and Audit Committee will be asked to approve the Statement of Accounts towards the end of September, once the audit has been completed.