Business rates & Liability order?

[the_maverick]

Hi all,

 

I could really do with some help on this matter.

 

I had a problem paying business rates this year (all current year, nothing from previous years to pay) and tried to get the Council to allow me to pay over the full year. Everytime they declined and ask for the account be fully brough fully upto date, they even rejected part payments which was odd I thought?

 

Anyway, got nowhere fast, and after moving to save money I have contacted them to try and make payments again, only to be told they have sought & got a liabiltiy order and instructed baliffs 'Rossendales' to get the money, and will not discuss payments.

 

I have had no infomation at all on the subject, although it all probably went to the old address and trying to retrieve what I can.

 

What are my options though? What is a liability order & how does that differ to a county court judgement?

 

Really could do with some advice...

[hallowitch]

A liability order comes from the magistrate court and gives the council a legal right to send the bailiffs to levy distress unlike a CCJ it it not registered against you on any

credit reference agency's

 

NDR(non domestic rates) work much the same as normal council tax debt

are you still in business is it open to the public (can anyone walk into your business premises)

[the_maverick]

Hi, thanks for your response. Yes we are still in business so people can just walk in. Had a tough year like most but over the next few months can pay in full. All I ever ask was to be allowed to pay over the full year, but they flatly refused each time.

 

Will I have got something from the court over this then?

[Thegreenpimpernel]

1) A liability order is sort of similar to a ccj exept:

 

a)It does not go on your credit record

 

b)You cannot go back to court to challenge it (unless you have lots of money and a good reason at the high court).

 

2) Had you applied or received small business rates relief ?(the 50% discount for one property under £6000)

 

3) Has the bill been adjusted to include the 100% relief from October, basically taking 25% the whole annual bill?

 

4) You need to act FAST. This is a business rates debt so they will turn up WITHOUT WARNING and may well remove your stock on the spot if you can't pay all or maybe half the balance on the spot.

 

5) Are you still in the premises?

 

6)Do you have a lease?

 

7)Tell us the outstanding amounts and bailiff firm.

 

Please reply quickly - your businesses suvival is under threat. There are things you can do but you must act within HOURS not DAYS, this is NOT council tax.

 

Sorry to duplicate HW didn't see your post.

Edited October 5, 2010 by Thegreenpimpernel
vvvbhi

[Thegreenpimpernel]

"Will I have got something from the court over this then?"

 

No, you get letters from the council warning of court action, then a letter saying they have aquired a liability order against you.

 

Doesn't matter anyway. You can't really challenge it on the grounds of not getting warning (its not a ccj!) the council will just say they sent it, end of story.

[the_maverick]

Hi,

 

2 does not apply.

 

3. What is this, never heard of it? So I guess no.

 

4. Stock & fixtures are not technically owned byt the business until paid in full. Which they are not, so not sure they can take any of it?

 

5. Yes, I am.

 

6. Yes, I do.

 

7. Debt is aprox £9k. Company I believe is Rossendales, although not had any actual paperwork yet to confirm.

[Thegreenpimpernel]

post deleted

Edited October 5, 2010 by Thegreenpimpernel
iuiuiuniujn

[hallowitch]

4. Stock & fixtures are not technically owned byt the business until paid in full. Which they are not, so not sure they can take any of it?

 

bailiffs can only levy goods belonging to the debtor so your best bet here is to provide proof to the council/bailiffs that the goods do not belong to you (HP agreement finance agreement ECT)

[Thegreenpimpernel]

2) Shame...

 

3) You will be entitled to 'tapered' relief up to £15,000, so a £9000 rates bill should have about 50% knocked off it for the months October to March. Check they have applied this.( I think it should take a good £1000 off the bill)

 

4) Correct, but can you prove it? Have you got invoices with the T&C's on the back that confirm this? If they levy on anything the fees will be significant for a £9000 debt.

[Thegreenpimpernel]

Further explanation of point 4 for other readers.

 

If the stock in question is bought 'on account' and that credit account is still outstanding - they cannot take it, the T&C's will state that the goods still belong to the supplier.

 

Edit - To clarify: The invoice relating to the stock (or stock of identical description!)would need to appear on the account statement of unpaid invoices.

Edited October 5, 2010 by Thegreenpimpernel
clarification

[the_maverick]

3. Will ring the council on this point and find out?

 

4. Yes, I have paperwork to support all this. Not on site, but it is with my accountant so can be retrieved.

[Thegreenpimpernel]

Advice for small businesses in general:

 

If you are not a limited company you can go online and create one for around £99. With the consent of your landlord, you will technically become a new tenant. Your bill will be recalculated for the rest of the year and the old bill will not be enforceable against the new business. Transfer your stock and equipment (by invoice) to the new company, but check out the VAT implications if you are VAT registered, you will need to register the new company or you will owe VAT on all the stock and capital!!! The old (reduced) rates bill will still be enforceable against you as an individual, however, the amount (and consequently any charges) will be lower and you can keep your home address locked easier than a business.

 

I've seen this work more than once!!!

[the_maverick]

Thanks, great advice!

 

I am a limited company, and generally been fighting to pay everyone, everything they are owed. But comes a point when you do think a fresh start would be better.....

[Thegreenpimpernel]

If you are confident there is NOTHING they can levy on ( do a walk through of your shop imagining you are the bailiff, include cars / vans / computers / tills, unless rented) then you can keep your doors open.

 

I would prepare a letter listing everything in the shop and write next to it 1) a legitimate reason why it cannot be seized 2) reference the paper evidence supporting it. eg "HP agreement" "outstanding credit account Inv No XXXXXX"

 

Hand it to the bailiff. He may try and bluff / BS you that "it doesn't matter" etc.. but in my case, they just looked at each other, made some notes and walked off never to be seen again.

 

Edit - Bailiffs know that their 'powers' are useless against well prepared and informed oppossition. Convince them they are wasting their time and they will go away.

 

However, you do need to pay the bill or will end up in some bother, a winding up order or go back to court to explain / prove you could not pay.

Edited October 5, 2010 by Thegreenpimpernel

[the_maverick]

There is probably a very small amount they could take, were talking a couple hundred pounds, certainly not thousands! And would reclaim them very little if sold off.

 

I can actually pay something if they do turn up, but just needed to know where I stand.

 

Also, read another post on here and many seem to advise on still sending payments the council, regardless. And avoid the baliffs fees....

[Thegreenpimpernel]

"I am a limited company"

 

Good, they can't go after your personal assets, but they could go after any car or van in the company name (unless its on HP) even if it's kept at home.

 

If you intend to make a fresh start, don't pay one of those companies loads of money, between yourself, your accountant and google! you should be able to do it OK.

[Thegreenpimpernel]

"There is probably a very small amount they could take"

 

They will add whopping fees if they remove / seize anything. Technically the goods should cover a substantial amount of the debt after fees etc, but you will have to battle them to enforce that. It will cost a lot of time and energy.

 

You really need to remove these siezable items.

 

Edit - remember the cash in the till!!!!

Edited October 5, 2010 by Thegreenpimpernel

[Thegreenpimpernel]

Yes send payments to the council through thier website. You will need your NDR account number and credit / debit card.

If you reduce the outstanding balance BEFORE the bailiffs levy you will reduce the amount they can charge.

 

£9000 is a juicy job for a bailiff, especially when an open premises like a shop is involved. They will be round soon - get your act together quickly and consider locking up for a couple of days while you do so.

[Thegreenpimpernel]

BTW - If goods are on FINANCE as opposed to HP they can contact the creditor pay off the balance and then sell them. This only makes sense if there is not much left to pay, but you need to be aware of this.

 

Must get to work, catch you later......

Edited October 5, 2010 by Thegreenpimpernel

[josephbloggs]

with regards greenpimpernels earlier post about ltd companies-

people that do this are the whole reason other buissnesses suffer because to recoup lost revenues everyone elses bills go up. and personally i find it disgusting that people/companies are allowed to get away with this every year and that the info on how to cheat the system is so readily availible. i know a lot of pub companies do this to cheat themselves out of thousands of pounds of debt every 5-6months, slighly changing their name each time (Eg xyz ltd, then xyz uk ltd then xyz limited etc)

[Thegreenpimpernel]

Josephblogs

 

I know what you are saying but you have misunderstood a couple of points and the eventual outcome.

 

I suggested that a sole trader forms a LTD company thereby splitting the years rates into:

 

a) A NDR account for entity 'a' the former sole trader. This account is in arreas, though it still has to be paid off or you will eventually get locked up! However, because no further NDR liability is being accrued by this entity the council will accept a much more reasonable payment schedule, where as if you are still a tenant they will understandably insist on the arrears being cleared before next years bill is due.

 

b)A NDR account for entity 'b', a new LTD company. This account is not in arrears. The process starts again paying monthly installments. If this account then slips badly into arrears you might need to think about whether your business is viable.

 

In the end ALL the rates get paid. If you sit back and allow them to put you out of business NONE of the rates get paid.

 

Even if a LTD company re-incorporates, what's wrong with that? You are left with an employer, taxpayer, rent payer and bread winner where else there would be an empty building.

[the_maverick]

Thanks for the post everyone. Ultimately as explained I want to pay & will pay. Just needed a little time. As TGP pointed out quite clearly, if the bailiff takes an over-agressive approach and tries to take as much as possible and makes me go out of business, he will get very little. But if he works with me sensibly and allows me to earn the money they are owned then he will get it all, no brainer really.

 

Anyway, was pro-active and spoke to them yesterday before they arrived and in principle a paln was agreed for 25% now, and the rest over the next 3 months. Fair and sensible I think you would agree (and yet I offered the Council the same and they refused?!? Go figure...) Found the guy very helpful, but then I suppose I was happy to pay so no need to get shirty!

 

Feeswise he said it will be just £150 on top of what is owed. Does that sound right? Seems reasonable?

 

But curious on the issue of there legal status, always good for people to know, as TGP commented on the fact some are not actually licensed to collect?

 

What do they need to provide? And how do you know if they are genuine as of course they will always claim they are? And what can you do if they are not.

[Thegreenpimpernel]

That's good news. However, the £150 is NOT ok.

 

Even if he has been to your premises 20 times he would only be due £24.50 (first visit) + £18.00 (second visit). As i understand, he has never been at all! fees due = NIL.

 

I would do two things.

 

1) Never trust them, he could still turn up, levy and then legitimately add hundreds in levy and van fees over the next few months. E-mail them and ask for a response to the effect that no further action will be taken if you stick to the agreed plan. Clearly state the agreed plan in the e-mail and always ask what the due date is for each payment, usually the same day every month. They are very much in the habit of making these casual arrangements then turning up saying you have broken your agreement by not paying on a date they arbitrarily made up without telling you.

 

2) The fees are nonsense, but don't jeopardize a payment plan you are happy with at this moment. Simply withhold it from the last payment then ask them to justify it.

 

Good luck with your business, and BTW make sure you get that small business relief, it could be worth up to a £1000 to you. Let us know how you get on, it will help other people.

[the_maverick]

Hi, I spoke to the council and I do not qualify for that relief. They say it goes on rateable value which is aprox 20k, but £10k payable.

 

No, no visit at all as yet. But there office simply says you must deal with the representative and will not discuss further?

 

He acknowledged on the phone that there is little or nothing he can take, yet says he still needs to come to fill out paperwork. Is that where the screw job might happen? Also, explain levy for me a bit more. I assume he makes a list of what they can sieze, so if he does that he gets more money is that what you are saying?

[Thegreenpimpernel]

"yet says he still needs to come to fill out paperwork. Is that where the screw job might happen?"

 

Got it in one maverik. The paperwork will be a walking possession agreement, its like securing the payment agreement against your possessions. Once you sign it he owns them! and can return, force entry and add massive removal costs if you 'default' on the agreement. When i say 'default' i mean you havn't paid by a date they will not tell you or confirm in writing.

 

('Levying' is the name for seizing your goods but leaving them with you with some (very short) time to pay.)

 

This is the oldest trap in the book. Once you allow him entry and a legitimate levy the fees for your debt will be just the start. They will turn up with a van at the fist opportunity (the day after you miss the unknown due date!) and add hundreds more.

 

Further more, do not expect him to offer the same payment arrangement once he's got in.

 

My local authority as an example would not allow it. Their rule is that you must pay half the debt on the spot or your goods are removed!

 

On the other hand......

 

You can use their criminality against them. As a LAST resort, let him levy on something you can later prove you don't own (don't tell him that!) play them for time then come back here and get the fees (which will be void) refunded.

 

I suggest you make the preparations suggested before, ie. an inventory of EVERY item in the shop, the reason it cannot be seized, and a reference to the evidence.