Can’t Afford to Pay Business Rates – What Are My Options?
Are you struggling and can’t afford to pay business rates and the options available to you?
We have got you covered.
In this comprehensive guide, we’ll explore various options to help you navigate the complex world of business rates and find the best solution to keep your business afloat. Let’s dive in!
- Understand your business rates and explore relief schemes to identify potential discounts.
- Negotiate with the local council for payment plan options, or consider insolvency procedures such as CVA or CVL.
- Understand liability orders and enforcement actions to avoid financial & legal consequences.
Understanding Your Business Rates
Business rates are a tax imposed on companies in the UK. It is linked to the financial worth of their property.
These rates are essential for running a business in the UK, and failing to pay them can lead to serious consequences, such as legal proceedings and a reminder letter or notice, which may forfeit your option to pay in instalments.
In order to avoid these issues, it’s crucial to understand the role of the Valuation Office Agency (VOA) and your local council in setting your business rates.
The rateable value is an estimation of the value of a business property. This estimate is then used to calculate the business rates.
It is determined by the VOA, taking into account factors such as the size, location, and type of business conducted at the property.
If you feel the rateable value of your property is incorrect, you can make an appeal. You will need to provide supporting evidence for your case.
By understanding your rateable value, you can better manage your business rates and avoid potential financial difficulties.
Local Council’s Role
Local councils play a crucial role in setting and collecting business rates.
They calculate the business rates bill for a property by multiplying the rateable value of the property by the non-domestic multiplier set by the central government.
Moreover, local councils are responsible for providing relief schemes to businesses struggling to pay their rates, such as temporary reductions, small business rate relief, rates relief, and other relief programs.
To ensure that you’re aware of all your options, it’s essential to maintain a good relationship with your local council.
Negotiating with Your Local Council
If you’re having trouble paying your business rates, don’t hesitate to engage with your local council.
They understand the challenges businesses face and are often willing to work with you to find a solution that suits both parties.
By negotiating with the local council, you can explore options such as payment plans and temporary reductions that can alleviate your financial burden.
Payment plans can be a lifesaver for businesses struggling to pay their rates. These plans allow you to spread your business rates payments over an extended period, with reduced instalments.
This flexibility can help you manage your cash flow better, cut costs, and avoid falling behind on your payments.
Even if you’ve already received a liability order, you can still request a payment plan. Reach out to your local council to discuss the available options and find a full repayment payment plan that works for you.
In certain circumstances, your local council may be legally obliged to grant temporary reductions in business rates. This can happen when a property is affected by severe local disruption or when it is partly occupied for a brief period.
To find out if you’re eligible for a temporary reduction, contact your local council and inquire about the available relief schemes, such as retail, hospitality, and leisure relief.
This could provide much-needed breathing room for your business during tough times.
Exploring Business Rate Relief Schemes
Business rate relief schemes can significantly decrease your business rates bill if you meet the eligibility criteria.
With several relief schemes available, it’s crucial to review your eligibility annually, as criteria and reduction amounts are subject to frequent changes.
By staying informed about your options, you can ensure that you’re taking advantage of any available discounts or exemptions.
Small Business Rates Relief
Small business rates relief is designed to support small businesses by exempting them from paying all or part of their business rates bill, depending on their premises’ rateable value.
To qualify, businesses must meet certain criteria, such as rateable value, type of business, and ratepayer’s status.
The full criteria and eligibility for the relief scheme can be found on the government’s website. If you believe you’re eligible, submit an application to your local council and start enjoying the relief this scheme offers.
Retail, Hospitality, and Leisure Relief
For retail, hospitality, and leisure properties, there’s a relief scheme that offers a 75% discount on business rates from April 2023 to March 2024, capped at £110,000 per business.
If you operate in more than one property of these industries and meet the eligibility criteria, this relief can greatly reduce your financial burden.
To apply, contact your local council and inquire about the necessary steps.
Other Relief Programs
In addition to the relief schemes mentioned above, there are other programs such as rural rate relief, charity rate relief, and discretionary rate relief that may be available to you.
These programs cater to specific circumstances of a limited company and limited companies that can afford to provide additional support for your business.
To explore your eligibility, get in touch with your local council and discuss the options that best suit your needs.
Challenging Your Rateable Value
If you believe your business rate tenable value is too high, you may consider challenging it. This can lead to a reduced business rates bill and provide some relief for your business.
To challenge your property’s rateable value, you’ll need to gather evidence and submit an appeal to the Valuation Office Agency (VOA) and the Valuation Tribunal.
To challenge your rateable value effectively, you’ll need to gather evidence of comparable properties, including details such as size, location, condition, and rental value.
Additionally, gather evidence pertaining to rental values, such as the rental value of the property, the duration of the lease, and any other relevant information.
This evidence will be crucial in proving that your rateable value should be adjusted.
Submitting an Appeal
To submit an appeal regarding your business rates, send a ‘Challenge case’ to the VOA, detailing the proposed rateable value and providing the necessary evidence. You have a period of seven days to four months to submit an appeal.
If your appeal is successful, you’ll receive a revised bill, potentially saving you a significant amount of money.
Seeking Professional Advice
When dealing with business rates, it’s always a good idea to seek professional advice. Licensed insolvency practitioners and legal counsel can provide valuable guidance on how to handle business rates debt and explore the most suitable options for your situation.
They can help you navigate the complexities of business rates and ensure you’re making the best decisions for your business.
Licensed Insolvency Practitioner
Licensed insolvency practitioners are qualified professionals who are authorised to provide assistance to individuals and companies facing financial difficulties.
They can offer clarity on the available options, such as payment plans and business rate relief schemes, and provide reliable counsel on the most suitable course of action.
If you’re struggling with business rates debt, consulting a licensed insolvency practitioner can help you find a way out.
Legal counsel can offer advice on challenging rateable value and appealing liability orders, ensuring you’re well-equipped to deal with business rates issues.
They can help you understand the legal aspects of paying business rates and provide guidance on the best course of action for your situation.
If you’re unsure about any aspect of business rates, seeking professional help and legal counsel can provide the support you need.
Understanding Liability Orders and Enforcement Actions
Failure to pay business rates can lead to the issuance of a liability order, which is a court order confirming your outstanding debt.
Understanding the consequences of liability orders and enforcement actions can help you avoid potential financial and legal troubles.
It’s essential to be aware of the process and take the necessary steps to prevent these situations from occurring.
Liability Order Process
When you receive a business rates liability order, you become liable for any costs incurred by the council.
The total amount owed will be the sum of the unpaid business rates plus the cost associated with the hearing date and the council’s application.
If you find yourself in a difficult financial situation, seeking professional advice is important. The Business Debtline is a helpful resource to consider.
They can provide guidance on how to best handle your liability order and seek professional help to explore possible solutions, such as payment plans or insolvency options.
Enforcement actions are formal actions taken by authorities to ensure compliance with laws or regulations.
In the context of business rates, this may include bailiffs at empty properties, taking possession of goods, charging fees, and suspending bailiff action.
To prevent enforcement actions, it’s vital to pay your business rates on time or contact your local council to explore payment plans or other relief options.
Considering Insolvency Options
In some cases, before insolvency proceedings and options such as Company Voluntary Arrangement (CVA) and Creditors’ Voluntary Liquidation (CVL) can provide a viable solution for businesses struggling with business rates debt.
These options can help you restructure your debts and you cannot afford to pay your back creditors, allowing you to focus on getting your business back on track.
Company Voluntary Arrangement
A Company Voluntary Arrangement (CVA) is a formal insolvency process that allows businesses to restructure their debts and pay back creditors over a fixed period of time, typically 3-5 years. This alternative to liquidation enables the company to continue operating despite being insolvent.
By entering into a CVA, you can manage your company’s debts more effectively and avoid the risk of liquidation. For advice on whether a CVA is the right option for your business, contact UK Liquidators.
Creditors’ Voluntary Liquidation
Creditors’ Voluntary Liquidation (CVL) is a formal insolvency procedure initiated by the company’s directors or shareholders to wind up an insolvent company with no prospect of recovery.
This option allows businesses to close down and still afford to pay back creditors, providing a clean exit for the company.
If you think CVL might be the right choice for your business, contact the Business Insolvency Helpline for guidance.
In conclusion, there are several options available for businesses struggling to pay their business rates.
By understanding your business rates, negotiating with your local council, exploring relief schemes, challenging your rateable value, and seeking professional advice, you can find a solution that works for your business.
Don’t let the burden of business rates hold you back; take action today to pay business rates and secure a brighter financial future for your business.
Frequently Asked Questions
Can I negotiate business rates?
You may be able to negotiate business rates with your local council. Rates can vary depending on the size and location of your business, so it is important to explore all options to ensure that you remain competitive.
If you feel that the rates are too high, contact your local council and explain your situation – you may be surprised at what can be achieved through negotiation.
Can bailiff force entry for business rates?
Generally, bailiffs cannot force entry into your business premises. It is recommended that you lock all doors and windows of commercial premises, and be wary of allowing access if any bailiff appears at your business premises.
Therefore, in conclusion, it is not possible for a bailiff to force entry for business open market rates.
Does everyone pay business rates?
Not everyone pays business rates. Whether or not a person is liable to pay my business rates depends on whether the property in question is entered in the Valuation Office Agency’s (VOA) business rates list and used for commercial purposes.
If this applies, then they will be required to pay business rates.
Business Debt Information
Here are some other informative articles regarding company debt advice in the UK:
- Am I Liable For Company Debts During Insolvent Liquidation?
- Business Debt Advice
- Can’t Afford to Pay Business Rates – What Options Are Available?
- Cannot Pay Corporation Tax Bill – What Options Do I Have?
- Company Cash Flow Problems: What Are Your Options?
- How Can a Business Remove a County Court Judgment (CCJ)?
- How Do I know If My Company Is Insolvent?
- I Cannot Afford to Repay My Bounce Back Loan
- Is a Director Liable for Company Tax After Insolvency?
- Is My Company Insolvent If It Can’t Afford To Pay HMRC?
- My Business Has Fallen Behind With PAYE
- My Company is Going Bankrupt: What Are My Options?
- Understanding HMRC Debt Collection
- What Are the Warning Signs of Insolvency?
- What Does It Mean When Your Business Is Bankrupt?
- What Happens When I Owe Money to My Own Company?
- What is a High Court Writ?
- What is Company Insolvency?
- What Is Deemed Misuse of a Bounce Back Loan?
- What Is HMRC Time to Pay Arrangement?
- What is the Insolvency Test for a Limited Company?
- Which Creditors Get Paid First in a Liquidation Process
- Who Decides When a Limited Company Is Insolvent?
Areas We Cover
- Can’t Afford Business Rates Greater London
- Can’t Afford Business Rates Essex
- Can’t Afford Business Rates Hertfordshire
- Can’t Afford Business Rates Kent
- Can’t Afford Business Rates Surrey
- Can’t Afford Business Rates Bedfordshire
- Can’t Afford Business Rates Buckinghamshire
- Can’t Afford Business Rates Berkshire
- Can’t Afford Business Rates Cambridgeshire
- Can’t Afford Business Rates East Sussex
- Can’t Afford Business Rates Hampshire
- Can’t Afford Business Rates West Sussex
- Can’t Afford Business Rates Suffolk
- Can’t Afford Business Rates Oxfordshire
- Can’t Afford Business Rates Northamptonshire
- Can’t Afford Business Rates Wiltshire
- Can’t Afford Business Rates Warwickshire
- Can’t Afford Business Rates Norfolk
- Can’t Afford Business Rates Leicestershire
- Can’t Afford Business Rates Dorset
- Can’t Afford Business Rates Gloucestershire
- Can’t Afford Business Rates West Midlands
- Can’t Afford Business Rates Somerset
- Can’t Afford Business Rates Worcestershire
- Can’t Afford Business Rates Nottinghamshire
- Can’t Afford Business Rates Bristol
- Can’t Afford Business Rates Derbyshire
- Can’t Afford Business Rates Lincolnshire
- Can’t Afford Business Rates Herefordshire
- Can’t Afford Business Rates Staffordshire
- Can’t Afford Business Rates Cardiff
- Can’t Afford Business Rates South Yorkshire
- Can’t Afford Business Rates Shropshire
- Can’t Afford Business Rates Greater Manchester
- Can’t Afford Business Rates Cheshire
- Can’t Afford Business Rates West Yorkshire
- Can’t Afford Business Rates Swansea
- Can’t Afford Business Rates North Yorkshire
- Can’t Afford Business Rates East Riding of Yorkshire
- Can’t Afford Business Rates Merseyside
- Can’t Afford Business Rates Devon
- Can’t Afford Business Rates Lancashire
- Can’t Afford Business Rates Durham
- Can’t Afford Business Rates Tyne and Wear
- Can’t Afford Business Rates Northumberland
- Can’t Afford Business Rates Cumbria
- Can’t Afford Business Rates Edinburgh
- Can’t Afford Business Rates Glasgow