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

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.