Recovery of business rates

Unpaid business rates

Business rate payments can be made on our website, visit Paying Business Rates. 

If your business does not pay your business rates as outlined on your bill, recovery action will be taken to collect the outstanding balance.

If you are struggling to pay your business rates and contact us, we may agree to hold recovery action. If we can agree a payment arrangement and you keep to it, or if there are exceptional circumstances which you have explained to us and we agree, a recovery hold is appropriate.

Contact us 

Always quote your business rates account number when you contact us.

• telephone 020 7361 2828 Monday to Friday 9am to 5pm 
• email [email protected]

Recovery process

If you do not make an arrangement to pay, the recovery process, outlined below, is split into two stages.

Stage 1: Recovery processes up to and including liability order stage

Your bill

Bills are sent annually in March each year for the following financial year, starting in April. We also send out amended bills throughout the year where there have been changes to accounts.

Each bill is due to be paid in monthly instalments. The payment date for business rates is the 7th of each month.

Payment methods

We encourage using Direct Debit. This is most efficient form of payment for the council and for customers. Other forms of payment are available.

You have the option to change payment methods to find the most suitable way to pay for your circumstances.  If you would like to pay by direct debit please complete and return the direct debit mandate form found on the Paying Business Rates webpage.

Payment reminder

If you miss an instalment, we will send you a reminder notice. This gives you 14 days to pay the overdue amount.

Final notice

If you bring your account up to date after we have sent you a reminder notice, but then miss another instalment we will send you a final notice. This will ask you to pay your full annual charge immediately.

Summons and liability orders

If you do not respond to a reminder or final notice, a Magistrates Court summons will be issued. If you respond to the final notice by making a part payment, a Magistrates Court summons will be issued for the remaining balance. We will also add the cost of raising the summons to your bill.

Following the issue of a summons, if the magistrates accept that you owe the debt and we have followed the correct recovery procedure, they will grant a liability order.

Costs

The following costs will be applied to your account:

• £138.00 costs is added once a summons is issued
• £44.00 costs is added once the magistrates grant a liability.

Stage 2: Recovery process beyond liability order stage.

Following the granting of a liability order, recovery options will be considered and a decision will be made moving forward.  If the debt is paid in full or a payment arrangement is agreed where you have contacted the office, the liability order will remain in place but recovery proceedings will cease as long as the arrangement of payment is kept to. 

If an arrangement is not paid as agreed, a liability order extends the recovery powers of the council and provides further recovery means to recovery unpaid business rates.

Enforcement agents (bailiffs)

In 2014 the government introduced new laws to regulate the work of debt collection companies. The new laws refer to debt collectors and bailiffs as 'enforcement agents'. We now use this term to describe debt recovery companies we employ.

All enforcement agents we employ are certified through the County Court and follow a national code of conduct. 

Enforcement agent letter

The council uses two debt enforcement companies. If you receive a letter or a visit, find details of how to make a payment, fees and charges, debt advice and general information about enforcement agent standards by clicking on the relevant link below.

Contact the enforcement agents directly and make an arrangement to clear the outstanding balance.

• Newlyn PLC
• RBKC Enforcement Service

The following fees* will be payable if a liability order is passed to an enforcement agent:

*The fees above are set out in The Taking Control of Goods (Fees) Regulations 2014.

Insolvency

As a director of a company, you have responsibilities to ensure that the company does not continue to trade if it is insolvent. If you are unable to pay your debts as and when they fall due, that is evidence of insolvency.

Bankruptcy action

If you are liable to pay business rates as an individual or partner, if the total debt you owe to us is more than £5,000, we may decide to take bankruptcy action against you in the County Court.

Implications of being made bankrupt include:

• your home could be repossessed
• other assets could be sold to repay debt
• inability to obtain credit
• significant additional costs added on top of the debt you owe
• your finances controlled by an insolvency practitioner

Statutory demand

We will send you a letter warning of proceedings we are going to take and give you a chance to pay. If you do not pay the full amount outstanding including costs or agree an acceptable payment arrangement, we will serve a statutory demand on you. This is the first formal stage in a process that may lead to bankruptcy.

Once a statutory demand is issued, you need to either pay the full outstanding amount including the costs, or agree an acceptable arrangement. If you fail to do this, we will then make a bankruptcy petition against you.

If a bankruptcy order is made against you, the official receiver or a trustee in bankruptcy will be appointed and you may no longer have control over certain assets. You may find it difficult to obtain credit in the future and your bank accounts may be frozen or closed. Certain professions may be affected by bankruptcy and you may face restrictions.

Compulsory winding up action

If you are liable to pay business rates as a company, and the total debt you owe to us is more than £750, we may decide to take winding up action against you in the High Court.

One last warning letter will be sent giving you an opportunity to pay the outstanding balance including costs owed. If you fail to make payment we will present a winding up petition against you without further notice.

If the court winds up your company, a liquidator will be appointed to oversee the wind up of the company. Implications of being wound up include:

• the directors' powers to control the company cease
• the company will cease to trade
• all employment contracts of the company employees will be terminated
• the conduct of the directors of the company may also be investigated

Charging orders

If the combined balance of your debts owed to us is over £1,000 and you own the business property we can apply to the County Court for a charging order to be placed on it. This action may impact your credit rating. You will also incur additional costs and court fees.

If a charging order is granted it gives us two options:

• recover the debt and interest from the proceeds of sale if the property is sold at a later date; 
• ask the County Court to enforce its sale to recover the money owed

Once a charging order is placed on your property, certain restrictions will apply and any debt due will be paid to the council before you receive any remaining proceeds of the sale.

Committal proceedings

We will only consider committal proceedings if all other avenues of recovery have been considered and discounted. This means we ask the magistrates court to decide whether to send you to prison for not paying your business rates.

If enforcement agents have been unable to remove goods to pay for your debt, or if we think other recovery options are inappropriate, we can send you a magistrates court summons to attend a committal hearing.

At the hearing, you will be asked questions about your income and expenditure and the reason(s) why you have not paid your business rates bills.

The magistrates will consider if you are guilty of either:

• refusing to pay, when you could have done, known as 'wilful refusal'; or
• not taking appropriate action when you were billed, and recovery action was being taken, known as 'culpable neglect'.

At the hearing the magistrates may sentence you to a term of imprisonment of up to three months. The sentence can be suspended on whatever terms the magistrates consider appropriate. Usually this would be an order to pay a weekly or monthly amount.

If you do not appear in court, we will ask the magistrates court to issue a warrant for your arrest without bail. This means that you will be arrested and either be taken straight to the Magistrates Court to appear in court or be taken into police custody to appear in court at a later date.