What happens if you don't pay your business rates?

If we don't receive payment we will begin recovery action.

Your Business Rates bill tells you how much you owe, the instalment(s) and the date payment needs to be made.

Reminder

If you are late with a payment or miss an instalment, you'll get a reminder notice giving you seven days to bring your business rate payments up to date. If you do not pay within the time allowed or you fall behind with your payments again, you will be sent a final notice. 

Final notice

This means that you have to pay the outstanding balance of your business rates bill (the full amount for the rest of the year).

If you do not pay the full amount on the final notice, we will start court action to recover the debt.

Summons

We will send you a summons telling you the date of the court hearing and the full amount of unpaid Business Rates, plus our costs of £55.00. Only payment in full will stop the recovery action at this stage.

You do not need to go to court if:

• you accept that you owe the amount on the Summons and
• you pay the full amount you owe, including costs, before the hearing, or
• you contact us before the hearing and we agree an acceptable arrangement to pay what you owe.

You can call the business rates team on 01237 428700 or email us at business.rates@torridge.gov.uk

You do have a right to attend if you wish. If you are attending court, you need to bring all the paperwork with you, including any receipts. Please be aware that you may have to wait before the court hearing begins.

The magistrates consider whether you are liable to pay non-domestic rates, not your ability to pay. If you are liable to pay and have not done so, the magistrates will grant a liability order. When the liability order is granted, an additional cost of £10 will be added to your bill, bringing the costs so far to £65.00.

You must pay the full amount shown on the summons, including the costs, to stop further recovery action. We incur costs in preparing the summons and we recover those costs from you. 

You can read more about how we deal with various debts in this policy  A Fair Collection and Recovery of Debt Policy (PDF) [290KB]

Once a Liability Order has been granted we will add further costs of £10 to your outstanding business rates debt.

Arrangements

At any stage before we send the liability order to an enforcement agent, you can contact us to make an arrangement to pay.

The arrangement will include court costs of £65.00

Recovery proceedings will continue if you do not keep strictly to the terms of an arrangement.

Liability Order

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.

If you are a business and struggling with debt you can find help and information here

Enforcement Agent action

If  we do not hear from you following a Liability Order being granted, we may pass your debt to our Enforcement Agents to collect. If this happens you will have to pay additional fees on top of the original debt. The enforcement process has three clear stages:

Stage One - Compliance Stage

Once a case has been passed to the Enforcement Agent by the Council, a £75.00 fee is payable by the ratepayer. The Enforcement Agent will attempt to make contact with the ratepayer by phone, text, or e-mail 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. The £75.00 costs incurred will be collected and cleared first.

Stage Two - Enforcement Stage

If stage one is not successful the account will be moved on to the Enforcement Stage. This stage will involve a visit to the premises. The cost to the ratepayer is an additional £235.00 plus 7.5% of the proportion of the debt above £1,500 if the debt is more than £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 a statutory document and the information enclosed will be in accordance with legislation.

Stage Three - Sale or Disposal of Goods

This is the final stage of the recovery process as far as the enforcement agents are involved. An additional charge of £110 will be applied to the debt.

Summary of Fees for Enforcement

Insolvency

If the business is in the name of individuals rather than a limited/incorporated company, and you owe more than £750.00, we can start bankruptcy proceedings against you under the Insolvency Act. Your home could be sold if we have to take this action.

If you have been declared bankrupt already you will need to send us documentary evidence to confirm the date of the bankruptcy order. The Official Receiver will appoint a trustee who will send us a proof of debt form so we can make a claim for the amount you owe. Once any assets you possess have been identified and evaluated, the Official Receiver will arrange to send payment to us as one of your creditors.

The Official Receiver will include any debts incurred before your bankruptcy, however if you still occupy the property you need to continue to pay any business rates that are due. If the property is empty and unoccupied and has become the responsibility of the trustee, no business rates will be payable as the property is exempt from empty rates.

Liquidation

If your business is a company and you owe more than £750.00, we can start liquidation proceedings against you under the Insolvency Act. If your company has gone into liquidation already, you will need to send us documentary evidence of when it happened.

If there are any business rates outstanding up to the date of liquidation, we will make a claim as an unsecured creditor to the insolvency practitioner appointed to deal with your company. Dependent on the other creditors and the assets of the company, we may receive a payment (dividend) to help reduce what you owe.

Debts incurred before the company was liquidated will be included in our claim to the insolvency practitioner. If the property is empty and unoccupied and has become the responsibility of the Insolvency Practitioner, no business rates will be payable as the property is classed as exempt from empty rates.

Administration

If your business is a company we can apply to the court with other creditors for you to be placed in administration.

If your business has gone into administration already, you will need to send us documentary evidence of when it happened. If there are any business rates outstanding up to the date of administration, we will make a claim to the administrator. Depending on the circumstances, we will not take any further recovery action while the administration order is in place. We will ask the administrator to pay any business rates due from the date of the Administration Order.

The administrator will look at your company's finances and decide if, by letting the company continue to trade, its financial situation may improve, or it may be decided to sell the business as a going concern. Alternatively, the administrator may recommend the only courses of action are liquidation, or a company voluntary arrangement.

Individual or company voluntary arrangement

If as an individual or as a company you approach an insolvency practitioner to make a voluntary arrangement, you will need to send us documentary evidence of when the arrangement took effect. If there are any business rates outstanding up to the date of the arrangement, we will notify these to the insolvency practitioner. The insolvency practitioner will write to your creditors to arrange a meeting where your debts will be confirmed, and the creditors will decide whether to accept a payment arrangement. If the arrangement is accepted we will receive payment from the insolvency practitioner of an agreed amount. If the arrangement is not accepted then recovery action will continue.

If you still occupy the property you need to continue to pay any business rates that are due from the date of the voluntary arrangement. If the property is empty and unoccupied and you are still in possession of the lease or freehold, empty rates will be payable after a three-month exempt period (or six if an industrial property), unless an exemption to unoccupied rate applies.

Receivership

If your company is placed in administrative receivership you will need to send us documentary evidence of when it happened. If there are any business rates outstanding up to the date of receivership, we will notify the receiver appointed to deal with your company.

Dependent on the other creditors and the assets of the company, we may receive a payment (dividend) to help reduce what you owe. If the company is still trading we will ask the receiver to pay any business rates due from the date of the Receivership.