Business rates arrears

Non-domestic rates, business rates, are collected by your council under a process closely modelled on council tax. Reminder, final notice, summons, liability order.

The critical difference comes after the order.

Enforcement is harder for a business

Enforcement agents collecting business rates follow the same basic rules as for council tax. They cannot force their way in on a first visit, and must come in through a door or the usual way in. But in practice a business has much more at risk:

• Business premises are often left unlocked during opening hours, which gives an agent peaceful entry
• Stock, equipment, vehicles and fittings can be taken and sold. The protection for tools of the trade, which covers up to £1,350 of work equipment for other debts, does not apply to business rates
• If a payment plan with the agent is broken, they can come back in with reasonable force after giving notice, as with council tax

If you run a business from home, the position depends on which part of the property is entered and what it is used for. Get advice rather than assuming.

Reliefs worth checking

Before agreeing anything, check whether you should be paying the full amount:

• Small business rate relief, where you occupy one property below a rateable value threshold
• Rural rate relief, for certain businesses in designated rural settlements
• Charitable and community amateur sports club relief
• Retail, hospitality and leisure relief, where a scheme is in operation
• Empty property relief, for a limited period after a property becomes vacant, longer for industrial premises
• Hardship relief, a discretionary power councils can exercise where a business would otherwise fail and it is in the interests of local council tax payers

Challenging your rateable value

Rateable values are set by the Valuation Office Agency, not by your council. The process for challenging one, Check, Challenge, Appeal in England, is more formal than for council tax bands and has strict time limits.

A successful challenge reduces the bill and can produce a refund. Where a property has been materially altered, or where the surrounding area has changed, it is worth investigating.

If the business has closed

Liability generally continues while you remain the person entitled to possession, which is often until a lease ends or is surrendered, not the day you stopped trading. Empty property relief may apply for a period.

If the business was a limited company, the debt is generally the company’s, not yours personally, unless you gave a personal guarantee. If you were a sole trader or a partner, it is your personal debt.

That distinction matters enormously and is worth getting right before you agree to pay anything from personal funds.

Getting help

Talk to your council early. Councils have a discretionary hardship power and will sometimes use it for a viable business with a temporary problem, but only where there is contact and a credible plan.