A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
Business Rates Arrears
Business rates are a tax on non-domestic property, collected by local authorities. For businesses with premises, they are a significant fixed cost - and arrears can build quickly, particularly for retail, hospitality, and other sectors with high property overheads.
Unlike some creditors, local authorities have strong enforcement powers and do not need a court order to take certain actions.
Why Business Rates Arrears Build
- High fixed cost - rates are a significant overhead for premises-based businesses
- Rising rateable values following revaluations
- Cash-flow pressure pushing rates down the priority list
- No relief or inadequate relief for the business's circumstances
How Local Authorities Enforce
Local authorities can pursue business rates arrears through:
- Reminders and final demands
- Liability orders - obtained from a magistrates' court, relatively quickly
- Enforcement agents (bailiffs) - to seize goods to the value of the debt
- Distraint - seizure and sale of assets
- Insolvency proceedings - a winding-up petition in serious cases
Your Options
Negotiate
Engage with the local authority early. Many will agree payment plans or direct you to relief schemes you may not be aware of. Ignoring the debt leads to escalation.
Check for Relief
You may be entitled to relief you are not claiming - Small Business Rate Relief, Retail Discount, or other schemes. An adviser can help you check.
Formal Options
If the arrears are part of a wider insolvency:
- A CVA can include rates arrears in a restructured plan while the business continues
- Administration provides a moratorium, pausing enforcement
- A CVL closes the business; rates arrears become an unsecured claim
Speak to a Licensed IP
If you are struggling with business rates arrears, our Manchester-based practitioners will assess your position and advise on the best route - including any relief you may be missing. Free and confidential.