3. Appendix 3
Non-Domestic Rates (Business Rates) - Recovery process and procedures
(In accordance with the Local Government Finance Act 1988 and subsequent regulations & amendments)
When a ratepayer liable for Non-Domestic Rates has not made the due payments, the Council will take the following action:
When a statutory instalment has not been paid, we send a reminder notice which shows the full amount required and the date it must be paid by (for instance, within seven days). The notice also warns that failure to comply, or if any further instalments are missed, the right to pay by instalments in the current financial year will be lost.
If the liable person, partnership or organisation fails to pay in response to the reminder notice the full unpaid balance for the year becomes due. We then send a final notice showing the full amount due and the date by which it must be paid (for instance, within seven days from the date of the final notice).
When there has been no satisfactory response to either of the above notices, and if the full amount shown on the final notice remains unpaid after the due date, the council may apply for a summons. The cost of the summons (an amount agreed by North & East Devon Magistrates Court, which is equal to the costs reasonably incurred, currently £40) are added to the debt.
Unless the council has made a mistake in issuing the summons, proceedings will only be stopped if the debt and costs are paid in full prior to the court date. At this stage, we still make arrangements to pay but this does not stop the application to the court for a Liability Order. We will not refuse part payments in order to reduce the debt.
Once the council has obtained a Liability Order to back the debt, we may initiate a range of remedies to recover unpaid rates including:
- Enforcement agent action – if the debtor has failed to make and maintain an agreed payment plan, we can instruct Enforcement agents to recover the debt. In a process known as Taking Control of Goods, Enforcement Agents may seize and sell goods to the value of the outstanding debt, plus their fees. The additional charges involved are quite considerable and the debtor is held liable for them.
- Insolvency action – we may petition for bankruptcy or for the winding up of a company, depending on whether the debtor is an individual or a company. Although the Insolvency Act 1986 does not stipulate that a Liability Order must be obtained before taking insolvency action, the Council will endeavour to do so. This action will only be pursued in accordance with page 4.
- Committal to prison (individuals only) - where bailiff action has been unsuccessful the Council will consider issuing a committal summons for the debtor to be committed to prison for non-payment. This action would only be taken in accordance with page 4.
Staff can exercise their discretion by allowing time for payments to be brought up to date without enforcement progressing to the next stage. Alternatively, they may reschedule a payment plan to start or finish at a slightly later date, provided the Council's position is not adversely affected and past payment performance indicates that the outcome is likely to be successful.
We always make it clear to ratepayers that recovery action will not be suspended pending any appeal they may have made to the Valuation Office Agency.
Insolvency and committal to prison are all dealt with on an individual basis and potential cases are considered by the Revenues & Benefits Manager before being referred to an authorised officer for approval.