Business Rates Debt

[deanbayley]

My LTD company currently owes just over £3000 in business rates that has been sent to the "collections department" and after getting in touch with the local council they have told me that unless a payment of at least £1,000 is made by the end of the month, even with making 1 person redundant, cutting the pay of another and reducing the outgoings by over £100 a week this is looking increasingly unlikely.

My questions are:

• If i cannot pay what can the bailiffs take, i have read else where that they can take tools of the trade? i don't fancy my 5 year in the making £12,000 toolbox being sold for a pittance leaving me unable to make an income..
• If i move everything that isn't on lease can they take other peoples tools?
• Last month i incorporated a new LTD company, can i ring the council as the new company and tell them we've taken over the building or will they still attend?

I am feeling ill with worry and can't afford to take the advice of an debt write off specialist.

Dean.

[wales01man]

Re: Business Rates Debt

Is the Company the debt is for still trading ?

[deanbayley]

Re: Business Rates Debt

It will cease trading tomorrow.

Dean.

[wales01man]

Re: Business Rates Debt

Have you as you will need to take Legal advice on this there may be serious repercussions if you move any assets to this new company to avoid paying the council.
Be very careful

[deanbayley]

Re: Business Rates Debt

Several years ago I took over from my dad and started a new ltd co, nearly everything worth anything is leased to the company by my dad's company (sole trader)..

i can can upload the lease document if that makes things easier..

[wales01man]

Re: Business Rates Debt

You need to show the Documents to the Bailiffs if they call don't expect an easy ride they are always right LOL

[Wombats]

Re: Business Rates Debt

If toos do not belong to you they cannot be taken. However, as Wales says, make sure you have the documentation to hand and make sure that you have the papers for the winding up of the old company to hand. I would need to check with it being NDR's, but the goods will be bound, so you would be unable to sell them at this point as they have been bound before the company is wound up.

If the new company has bought the tools, it is possible, given the company directors are presumably the same people, that the sale could be reversed. As I say, don't take this as fact as I need to check the regulations first.

[ploddertom]

Re: Business Rates Debt

There is no exemption for tools of the trade for a Ltd Co.

[deanbayley]

Re: Business Rates Debt

The co itself hasn't bought any tools, all tools where bought in my name.. But I'm the sole director..

[ploddertom]

Re: Business Rates Debt

No protection I'm afraid.

[wales01man]

Re: Business Rates Debt

Be VERY careful

[ploddertom]

Re: Business Rates Debt

Reading back over things again, are you saying the tools are leased from your father. Is there an agreement for this - not one that has just been knocked up as that is too obvious?

[deanbayley]

Re: Business Rates Debt

Equipment Lease Agreement





This Equipment Lease Agreement (the “Agreement”) is made and entered on **********, by and between ********** of ****** Business Services (“Lessor”) and *********** of *********** (“Lessee”) (collectively referred to as the “Parties”).





The Parties agree as follows:


1. EQUIPMENT: Lessor hereby leases to Lessee the following equipment:





Long list with asset numbers, all equipment have thick engraved plastic asset tags bonded to them..





(the “Equipment”).





2. LEASE TERM: The lease will start on January 3rd 2011 and will end on January 4th 2021.





3. LEASE PAYMENTS: Lessee agrees to pay to Lessor as rent for the Equipment the amount of £351 (“Rent”) each month in advance on the first day of each month at: ********************** or at any other address designated by Lessor. If the Lease Term does not start on the first day of the month or end on the last day of a month, the rent will be prorated accordingly.





4. LATE CHARGES: If any amount under this Agreement is more than 14 days late, Lessor shall be entitled to reparation in accordance with the Late Payment of Commercial Debt (Interest) Terms Act of 1998 as modified in 2002. The interest due and payable on the outstanding amount will be calculated on a daily basis at a rate 5% above that of the current base lending rate of Lessor’s bank. In addition, Lessor reserves the right to recover in full any additional costs incurred in the pursuit of such late payments.





5. SECURITY DEPOSIT: Prior to taking possession of the Equipment, Lessee shall deposit with Lessor, in trust, a security deposit of £100 as security for the performance by Lessee of the terms under this Agreement and for any damages caused by Lessee or Lessee’s agents to the Equipment during the Lease Term. Lessor may use part or all of the security deposit to repair any damage to Equipment caused by Lessee or Lessee’s agents. However, Lessor is not just limited to the security deposit amount and Lessee remains liable for any balance. Lessee shall not apply or deduct any portion of any security deposit from the last or any month's rent. Lessee shall not use or apply any such security deposit at any time in lieu of payment of rent. If Lessee breaches any terms or conditions of this Agreement, Lessee shall forfeit any deposit, as permitted by law.





6. DELIVERY: Lessee shall be responsible for all expenses and costs: i) at the beginning of the Lease Term, of shipping the Equipment to Lessee’s premises and ii) at the end of the Lease Term, of shipping the Equipment back to Lessor’s premises.





7. DEFAULTS: If Lessee fails to perform or fulfil any obligation under this Agreement, Lessee shall be in default of this Agreement. Subject to any provision of law to the contrary notwithstanding, Lessee shall have seven (7) days from the date of notice of default by Lessor to cure the default. In the event Lessee does not cure a default, Lessor may at Lessor’s option (a) cure such default and the cost of such action may be added to Lessee’s financial obligations under this Agreement; or (b) declare Lessee in default of the Agreement. If Lessee shall become insolvent, cease to do business as a going concern or if a petition has been filed by or against Lessee under the Insolvency Act 1986 or similar statutes, acts or regulations, Lessor may immediately declare Lessee in default of this Agreement. In the event of default, Lessor may, as permitted by law, re-take possession of the Equipment. Lessor may, at its option, hold Lessee liable for any difference between the Rent that would have been payable under this Agreement during the balance of the unexpired term and any rent paid by any successive lessee if the Equipment is re-let minus the cost and expenses of such reletting. In the event Lessor is unable to re-let the Equipment during any remaining term of this Agreement, after default by Lessee, Lessor may at its option hold Lessee liable for the balance of the unpaid rent under this Agreement if this Agreement had continued in force.





8. POSSESSION AND SURRENDER OF EQUIPMENT: Lessee shall be entitled to possession of the Equipment on the first day of the Lease Term. At the expiration of the Lease Term, Lessee shall surrender the Equipment to Lessor by delivering the Equipment to Lessor or Lessor’s agent in good condition and working order, ordinary wear and tear excepted, as it was at the commencement of the Agreement.





9. USE OF EQUIPMENT: Lessee shall only use the Equipment in a careful and proper manner and will comply with all applicable laws, rules, statutes, regulations and orders regarding the use, maintenance of storage of the Equipment.





10. CONDITION OF EQUIPMENT AND REPAIR: Lessee or Lessee’s agent has inspected the Equipment and acknowledges that the Equipment is in good and acceptable condition.





11. MAINTENANCE, DAMAGE AND LOSS: Lessee will, at Lessee's sole expense, keep the Equipment in good condition and repair (fair wear and tear excepted) throughout the Lease Term, and will be liable for the costs and expenses of maintaining and repairing the Equipment, and of consumable items and accessories required for the use of the Equipment during the Lease Term.. Risk of any loss or damage to the Equipment will become the responsibility of the Lessee. In the event the Equipment is lost or damaged beyond repair, Lessee shall pay to Lessor the replacement cost of the Equipment; in addition, the obligations of this Agreement shall continue in full force and effect through the Lease Term. The Lessee will not carry out or allow to be carried out any structural modifications to the Equipment without the prior agreement of the Lessor.





12. INSURANCE: Lessee will insure the Equipment for its full re-instatement value. Lessee shall be responsible to maintain insurance on the Equipment with losses payable to Lessor against fire, theft, collision, and other such risks as are appropriate and specified by Lessor. Upon request by Lessor, Lessee shall provide proof of such insurance.





The Lessee shall punctually pay all premiums necessary to keep current the insurances required by under this Clause and shall provide the Lessor upon request with satisfactory evidence with respect to those insurances. The Lessee may not at any time do or permit anything to be done to the Equipment, or use, modify or otherwise affect the Equipment, if this could render void or voidable any of the insurances required under this Clause. The Lessee shall not use, operate or hold the Equipment during any period in which insurances are not maintained in accordance with this Clause or in any area which is excluded from the coverage of the insurances nor cause or permit the Equipment to be used, operated or held in any place or manner for any purpose inconsistent with the terms of, or otherwise outside the cover provided under, insurances then in effect in accordance with this clause.





13. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999: A person who is not a party to this Agreement may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.


14. LIABILTY: Lessor warrants that the Equipment will be in working order when it is delivered to the Lessee but Lessor has no control over the operation of any external conditions or any other equipment, or machine used along with Equipment.


Subject to the paragraph below, the liability of either party to the other for any breach of this Agreement, any negligence or arising in any other way out of the subject matter of this Agreement and the Equipment, will not extend to any indirect damages or losses, or any loss of profits, loss of revenue, loss of data, loss of contracts or opportunity, whether direct or indirect, even if the party bringing the claim has advised the other of the possibility of those losses or if they were within the other party's contemplation.


The entire liability of either party to the other, whether in contract, tort or otherwise, shall be limited to the total of the Rent actually paid to Lessor at the date the claim arose. Nothing in this Section 14 shall apply so as to limit or exclude either party’s liability for: 
(a) death or personal injury resulting from Lessor’s negligence; 
(b) any fraud or for any sort of liability that, by law, cannot be limited or excluded; or 
(c) any loss or damage caused by a deliberate breach of this Agreement; 



Lessor shall not be liable to the Lessee for any breach of its obligations under this Agreement, in tort or otherwise if such breach is caused by circumstances beyond its reasonable control.


The express undertakings and warranties given by the parties in this Agreement are in lieu of all other warranties, conditions, terms, undertakings and obligations, whether express or implied by statute, common law, custom, trade usage, course of dealing or in any other way. All of these are excluded to the fullest extent permitted by law.





15. ENCUMBRANCES, TAXES AND OTHER LAWS: Lessee shall keep the Equipment free and clear of any liens or other encumbrances, and shall not permit any act where Lessor’s title or rights may be negatively affected. Lessee shall be responsible for complying with and conforming to all laws and regulations relating to the possession, use or maintenance of the Equipment. Furthermore, Lessee shall promptly pay all taxes, fees, licenses and governmental charges, together with any penalties or interest thereon, relating to the possession, use or maintenance of the Equipment.





16. LESSORS REPRESENTATIONS: Lessor represents and warrants that he/she has the right to lease the Equipment as provided in this Agreement and that Lessee shall be entitled to quietly hold and possess the Equipment, and Lessor will not interfere with that right as long as Lessee pays the Rent in a timely manner and performs all other obligations under this Agreement.





17. OWNERSHIP: The Equipment is and shall remain the exclusive property of Lessor.





18. SEVERABILITY: If any part or parts of this Agreement shall be held unenforceable for any reason, the remainder of this Agreement shall continue in full force and effect. If any provision of this Agreement is deemed invalid or unenforceable by any court of competent jurisdiction, and if limiting such provision would make the provision valid, then such provision shall be deemed to be construed as so limited.





19. ASSIGNMENT: Neither this Agreement nor Lessee’s rights hereunder are assignable except with Lessor’s prior, written consent.





20. BINDING EFFECT: The covenants and conditions contained in the Agreement shall apply to and bind the Parties and the heirs, legal representatives, successors and permitted assigns of the Parties.





21. GOVERNING LAW: This Agreement shall be governed by and construed in accordance with the laws of England and Wales. The English Courts will have exclusive jurisdiction to deal with any dispute which has arisen or may arise out of, or in connection with, this Agreement, except that either party may bring proceedings for an injunction in any jurisdiction.





22. NOTICE: Any notice required or otherwise given pursuant to this Agreement shall be in writing and mailed first class post, or delivered by overnight delivery service to:





Lessor: Lessee:





names and addresses










Either party may change such addresses from time to time by providing notice as set forth above.





23. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between the Parties and supersedes any prior understanding or representation of any kind preceding the date of this Agreement. There are no other promises, conditions, understandings or other agreements, whether oral or written, relating to the subject matter of this Agreement. This Agreement may be modified in writing and must be signed by both Lessor and Lessee.





24. CUMULATIVE RIGHTS: Lessor’s and Lessee’s rights under this Agreement are cumulative, and shall not be construed as exclusive of each other unless otherwise required by law.





25. WAIVER: The failure of either party to enforce any provisions of this Agreement shall not be deemed a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement. The acceptance of rent by Lessor does not waive Lessor’s right to enforce any provisions of this Agreement.





26. INDEMNIFICATION: Except for damages, claims or losses due to Lessor’s acts or negligence, Lessee, to the extent permitted by law, will indemnify and hold Lessor and Lessor’s property, free and harmless from any liability for losses, claims, injury to or death of any person, including Lessee, or for damage to property arising from Lessee using and possessing the Equipment or from the acts or omissions of any person or persons, including Lessee, using or possessing the Equipment with Lessee’s express or implied consent.








IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the day and year first above written.





LESSOR:





___________________________________





___________________________________


(Name)


___________________________________


(Position, if applicable)








LESSEE:





___________________________________





___________________________________


(Name)


___________________________________


(Position, if applicable)

[ploddertom]

Re: Business Rates Debt

If that is what you have then all the equipment listed within it should be safe. I would ensure you have several copies of this made - never part with the original. Of course a Bailiff may still try to seize and insist your father produces proof of purchase - done now by way of Interpleader - but given that document he not only risks having his Certificate revoked but ending up giving the Creditor (Council) a large bill.

From what you say it does look as if they will pass this on for enforcement and you should try and make them understand that will acheive nothing. They will however be looking to clear the debt before the end of the financial year. If it is the Ltd Co that owes the debt then they could serve a winding up order - depends what assets they think are owned. I think it will pay you to get your local Councillor(s) on board to see if they will intervene on your behalf.