What happens if I don't pay my non-domestic rates?
 
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What happens if I don't pay my non-domestic rates?

If you get into payment difficulties and you cannot afford your payments you should contact the business rates team straight away to see if we can help you by making a different payment arrangement.

Remember that paying by direct debit ensures that your payments are made on time every month. You also have the option of paying on either the first or the fifteenth of the month.

If you make an arrangement with us it will be subject to recovery action continuing to Liability Order stage. This secures the debt for the Council and enables us to take further action, should you default on your arrangement.

If you are awaiting the outcome of an appeal against your rateable value, you must continue to pay as billed (Rating Legislation specifies that you have no right to withhold payment pending an appeal. However, it does specify that you may be entitled to interest on any overpayment which arises as a result of your appeal).

Listed below are the different stages in the recovery process and an explanation of what each stage means for you as a ratepayer.

Bill/Demand Notice

Why is it sent? - The bill will show how much business rates you owe for the year, the amount of each instalment and the due date. They are normally sent at the start of the financial year, or if your rates bill alters during the year (eg changes in relief entitlement, rateable value or if you move business premises). Business rates are normally payable over ten instalments. However, from 01 April 2014 ratepayers can request to pay their rates in twelve monthly instalments.

What should I do? - Pay the instalments before the due dates as the payment is due on your account by the instalment date.

What if I cannot pay as billed? - Pay as much as possible as regularly as possible. If you are paying less than the due amount or paying after the due date then you will receive further notices. 

First Reminder

Why is it sent? - This is sent because our records show that you have fallen behind with your payments. This usually means you have not paid an instalment on time or that you paid less than you should have done. It may also be sent if you still owe money from a previous year.

What should I do? - You should bring your account back up to date within the specified time. If an account is brought back up to date and kept up to date, no further letters will be sent.

What if I cannot do this? - If you do not bring your payments up to date you will lose your right to pay by instalments. No further reminders will be issued and the next document you receive will be a court summons for the full balance on your account. Court costs of £45.00 will be incurred at this stage.

If you are unable to pay as required you must contact the Business Rates team immediately. 

Final notice

Why is it sent? - This is normally sent if you have had a first reminder, brought your account up to date and then fallen behind for a second time. This letter will not be asking for the instalments that have been missed. This letter will cancel your right to pay by instalments and you will be asked to pay the remaining balance on your account in full.

What should I do? - You must pay the balance on your account in full within the specified time. If you pay the account in full you will not be sent any more letters.

What if I cannot do this? - If you do not pay the account in full you will be sent a Magistrates' Court Summons (see below). If you cannot pay in full you should pay as much as possible as regularly as possible. The business rates team will not re-instate instalments unless there are exceptional circumstances, nor can they set up arrangements at this stage.

Magistrates Court Summons

Why is it sent? - This is sent to tell you that because you are in arrears the Council is going to Court to obtain a Liability Order against you. This is a legal document which states how much you owe us and it gives us the power to send your account to the Enforcement Agents. Costs of £45.00 will be added to accounts for the Summons being sent.

What should I do? - You must pay in full before the Court date. If you pay the balance in full (including costs) before the Court Date you will not be sent any more letters.

What if I cannot do this? - If you cannot pay before the Court Date, but wish to make an arrangement to clear your account please contact us straight away. Any arrangement that you make will still include the summons costs, plus a further £20.00 Liability Order costs unless you are able to pay in full before the Court date. Provided that you keep to the arrangement we will not take any further action against you.

Once an account has been to Court there are various courses of action that we may take, depending on what we believe is the best way to secure payment. These are:

  • asking our enforcement agents to collect the debt by removing and selling some of your possessions which will result in you having to pay their fees
  • commencing insolvency proceedings through the County Court
  • applying to the County Court for a charging order on your property that enables us to force its sale or repay your business rates out of the proceeds of any future sale. This will also result in you paying additional fees.

In some cases, if you continue not to pay we can return to court. The court may decide to send you to prison, order you to pay, or tell us to write off part or all of the debt.

Changes to Enforcement 2014

From 6 April 2014, bailiffs will be known as Enforcement Agents. 

The Government has passed new legislation that will change the way enforcement agents operate and collect debts. This is intended to create a new open, transparent and sustainable process which protects the vulnerable against what is often perceived as aggressive bailiff practices. The principles behind the new rules are aimed at reducing physical door step activity with the enforcement agent, and having a set and clear fee regime. The enforcement process will have three clear stages:

Stage One - Compliance Stage

Once the Council passes a case to the enforcement agent, a £75 charge is payable by the ratepayer. At this point the enforcement agent will attempt to make contact by text, e-mail or phone (but will not call at the property at this stage) – If the ratepayer pays or makes an arrangement to pay and maintains payment, they will not hear from the enforcement agent again, as long as they keep to the arrangement. The £75 costs incurred will be collected and cleared first.

Stage Two - Enforcement Stage

If stage one is not successful the account is moved on to the Enforcement Stage. This stage involves a visit to the premises. The cost to the ratepayer is an additional £235 plus 7.5% of proportion of debt above £1,500 if debt is above £1,500. There is only one enforcement charge, regardless of how many visits are made for the same debt. At this stage, the enforcement agent can still make an arrangement with the ratepayer without taking control of goods, although the costs will be included. At this stage the enforcement agent must issue an Enforcement Notice, this is a statutory document and information enclosed will be in accordance with legislation.

Stage Three - Sale or Disposal of Goods

This is the final stage of recovery as far as the enforcement agents are involved and a charge of £110 will be applied.

Summary of Fees for Enforcement

Fee StageFixed FeePercentage Fee
£0.00 to £1500£1500+
Compliance Stage£75.000%0%
Enforcement Stage£235.000%7.5%
Sale or Disposal Stage£110.000%7.5%