Business rates - late or non-payments

What happens if you don't pay your business rates on time.

Business rates must be paid in accordance with the instructions on the bill to avoid recovery.

  • Reminder: When one instalment is missed, a reminder will be issued. If this is not brought up to date, a summons is issued. If it is brought up to date, and kept up to date, no further action will be taken.
  • Second reminder: If it is brought up to date but subsequent instalments are defaulted upon, a second reminder is issued. If this is not brought up to date, a summons is issued. If it is brought up to date, and kept up to date, no further action will be taken.
  • Final notice: If it is brought up to date but subsequent instalments are defaulted upon, a final notice is issued. The final notice allows seven days to pay the balance due for the year in full (it is not enough just to bring the instalments up to date).

If this is not paid in full within seven days, a summons is issued (see below). 

Please note that paying within the month will not always avoid recovery, it is important to make payment on the date shown on the bill.
 
The easiest way to remember to pay your business rates on time is to pay by Direct Debit.

Business rates summons

If you have received a reminder, but your business rates remains unpaid you will be sent a summons from the magistrates court. This will tell you how much money you owe and when the hearing will be. You will be charged £75.00 costs for the issue of the summons. 
 
If you can't pay the amount in full, please contact us on 01723 232378 or by email at local.taxation@scarborough.gov.uk . It is unlikely that the summons will be withdrawn but the we can agree a payment plan with you.
 
Even if you have received a summons you do not have to attend the court hearing. If you do attend the court, a council officer will be available to make a payment arrangement with you. It is unlikely that you will be required to appear before the magistrate.
 

If the council proves to the satisfaction of the court that these sums are due from you, the court must issue a liability order for the sum outstanding. The council will apply for costs of £55.00 to cover the cost of recovery action to be taken. This is in addition to the £75.00 for the issue of the summons.

If the amount shown as outstanding on the summons is paid in full to the council by the day before the court hearing the council will still apply for costs of £75.00 for the issue of the summons but will not apply for the additional £55.00 costs.

The liability order gives the council legal powers to recover the money you owe. These powers are:

Bankruptcy/insolvency

Bankruptcy is essentially a declaration to your creditors that you cannot afford to repay your debt.

If you or your company owe more than £5000 in business rates, and you have been summonsed, we may start bankruptcy or liquidation proceedings against you.

If we take this action, we will pass your account to our solicitors who will send you a statutory demand. A statutory demand gives you 21 days to pay us the full amount. The full amount will include the costs incurred by us by taking this action and in some cases statutory interest.

If you receive a statutory demand, you should contact our solicitors immediately.

If you do not settle the statutory demand, we will present a petition for bankruptcy or liquidation to the county court.

Enforcement agents

If we do not receive payment in full, or if a suitable payment arrangement is not agreed, we will instruct one of our enforcement agents to collect the debt.

The Taking Control of Goods Regulations 2013 S.I 2013/1894 come into force on 6th April 2014. Under these regulations the old bailiff levy process is replaced by taking control of goods (TCOG) – a process started by the Enforcement Agent  company serving a mandatory Notice of Enforcement (Compliance Stage letter). In addition, there is a new fee structure which the enforcement agent will charge.

We employ national firms of accredited enforcement agents who are authorised to act on its behalf to collect business rate debts following the issue of a Liability Order. Our main enforcement agents are:

  • Rossendales
  • Jacobs

Fees

Administration (compliance) stage: £75.00. Applied when the enforcement company receives an instruction.

Enforcement fee: £235.00 + 7.5% on debts > £1,500. Applied when Enforcement Agent makes first attendance.

Sale fee: £110.00 + 7.5% on debts > £1,500. Applied when the EA attends to remove goods to a place of sale.