Business rates are paid on most commercial properties such as shops, offices, pubs and warehouses. The money raised helps fund local council services including social care for children and adults, libraries, waste collection and housing. If you’re struggling to pay your business rates you should contact the council as soon as possible. The council may agree to a payment arrangement or grant you breathing space. Breathing space stops enforcement action and most creditors applying interest and charges for 60 days. Find out more in our breathing space fact sheet.
The person responsible for paying business rates is usually the struggling to pay business credit card occupier of the property. If you are a landlord and the occupier of the premises isn’t you, you should discuss with them who will be liable for the bill. If you are unable to pay your business rates you should also consider whether you could apply for relief. In England, Wales and Northern Ireland local councils manage business rate relief. They’ll ask you to provide evidence of your financial situation and how the property benefits the community to help them decide whether or not to award relief.
When you receive a demand for your business rates you have seven working days from the date of the demand to pay the amount shown. If you don’t pay by the end of this period the council will start recovery proceedings. If you miss a second reminder notice the full year’s business rates become due and any existing debt becomes enforceable by court order.
If you are a limited company and are having difficulty paying your business rates you should contact the council immediately. It’s important to do this even if you are able to afford to pay the arrears because the company’s credit record will be affected. If you are a sole trader and your business is insolvent you should seek advice from an insolvency practitioner straight away.
Insolvency is when a company is unable to pay its debts and is legally declared insolvent. It’s the last option to save your business but it’s a serious step and could mean losing your assets. Insolvency proceedings usually involve liquidating the company, which means selling off all of its assets and distributing the proceeds between the creditors.
If you’re a small business that is struggling to pay its bills you may be able to apply for a creditor’s voluntary arrangement. This is a formal agreement to make structured repayments for a percentage of the amount you owe. Find out more in our debt solutions for small businesses fact sheet.