Business rate Demand notice

[peter.k]

Hello all,

Story: Few days ago i received Business rate demand notice from local council for 2012/2013

History: Back in 2012 and 2013 myself and ex-business partner opened a company and rented a unit. After few years of trading, unit was closed and company dissolved. Unfortunately lease for this unit was drawn under our names rather than company name (foolish, i agree). And yes, as we never registered with the local council, we never received any Business rate bills in the past.

Question: is there anything that can be done that can avoid me paying these bills? Ex-business partner have left the country 2 years ago and don't really care anymore and i dont look forward paying them alone..

Thank you in advance for any help.

[Snoopy1948]

Re: Business rate Demand notice

Hi peter.k ....

I worked as an enforcement officer for a local authority for 23 years and was, as such, a local government employee all that time.

Enforcement rules changed in 2014 ( when I retired ) but I think the rules of liability ( as in your case ) would remain the same.

Many commercial landlords refused leases in company names and for good reason as companies where being dissolved with increasing rapidity.

However, I suspect that liability for business rates here may not be entirely clear. Normally council look for leases and banking arrangements to decide on what route the liability should go i.e. personal names or company name.

Did you trade as a limited company? Were there accounts, chequebooks, paying in books in a company name? If so, and you have paper evidence of this. It is far from the complete answer as the council may simply use your lease liability to bill you personally for business rates although if in any other sense you traded as a limited company, you may have an argument. But you must start out with a comprehensive paper trail in defence.

The problem with business rates is that they are due and payable even though you may run at a loss for all the time you traded.

One other point? When did the local authority become aware of your trading period and non registration? I believe there may be case law that states they cannot demand back charges after a certain time.

[peter.k]

Re: Business rate Demand notice

Hi peter.k ....

Did you trade as a limited company? Were there accounts, chequebooks, paying in books in a company name? If so, and you have paper evidence of this. It is far from the complete answer as the council may simply use your lease liability to bill you personally for business rates although if in any other sense you traded as a limited company, you may have an argument. But you must start out with a comprehensive paper trail in defence.

One other point? When did the local authority become aware of your trading period and non registration? I believe there may be case law that states they cannot demand back charges after a certain time.

Morning Snoopy1948 and thank you for reply and information.

Yes, all of the trading was done as per limited company (bank accounts, bills and more), it was only a lease that was in our real names, i suspect for reasons you pointed out. The issue is the paper trail - don't have much left from those times after company was closed.
Back in 2015 i received a first Demand notice for the period of 2013/2014 which i fully paid. After payment i enquired if there is anything outstanding in my name, to which council replied that there was nothing and all has been paid. And now this... In their email to myself they claim they have received lease papers in summer 2016 and now are acting upon them.

[wales01man]

Re: Business rate Demand notice

When you paid in 2015 was the payment made through a company or personal account if personal they would probably accept this to be a personal debt.
Hope I am wrong here

[peter.k]

Re: Business rate Demand notice

In 2015 i paid this from my personal account as my company and company bank account was closed in 2013.

[Snoopy1948]

Re: Business rate Demand notice

Hi Peter K

There is of course no defence for you not registering for the Non Domestic Rate at the time of trading but there may be some argument here that you can use.

I would write to the council regarding the account in question stating that they have registered the account incorrectly in personal names as you traded as a limited company for the period defined with banking and insurance ( if applicable ) facilities in the limited company name. Clearly it must have been a limited company and not 'trading as'. You will need to show paper evidence of company registration and whatever paper trail you have regarding the limited company i.e. cheque books, paying in books and statements. I am assuming that the lease rent was paid through the company account? That would be good as is all confirms that all liabilities are paid via the company bank account. The council would not, in my opinion, expect you to pay a limited company tax liability from personal accounts, and this is worth pointing out. But from what you say, you traded to all intents and purposes as a limited company and as such business rate tax would be a company payment and certainly offset in trading accounts.

The fact that you made a later payment out of a personal account should have no bearing as the source of payment does not have to mirror the tax liability in this case.

You could also attempt to state that you are aware that business rate accounts cannot be back charged more than one year after the council actually found out. This is because councils are deemed to 'be in control' and essentially monitor and be aware of what is going on in their manor. I have seen that very reason used in defence of council tax registration but not in business rates. However I would hope the situations mirror each other.

But you may not need to insist on the time factor if they accept that there was no personal liability for business rates and particularly if lease rent came out of the company account which in essence, it would have to. The only reason for personal names on the lease is for when things go wrong and the landlord has more avenues of debt recovery.

I'll admit that these ideas are bold but I believe they hold some water. Councils sometimes bill in personal names by default as they tend to have limited information to hand. It's at that point that the argument should commence. And you have to be bold in argument with the council. This is just my personal opinion of course but a forcefully written letter with all the facts as above may help. You can only try.

Your last description of that payment made and any further liabilities due is unclear. You may still have paid an account in personal names that may have been incorrect, so there is still argument to be given.

[peter.k]

Re: Business rate Demand notice

Hi Peter K

There is of course no defence for you not registering for the Non Domestic Rate at the time of trading but there may be some argument here that you can use.

I would write to the council regarding the account in question .....

First of all, huge thank you Snoopy1948, for a very detailed and indeed, a helpful, explanation and fact based ideas thrown in. I think all of the above mentioned could work if executed correctly.
Only issue i see in my case is the paper trail - as we closed the company and closed all bank accounts, all cheque books, invoices and the rest were disposed one year after the closure.
I suspect i will have to try and push for the time factor as they did confirm receiving information last summer and only issued a bill this summer.

[wales01man]

Re: Business rate Demand notice

You state you destroyed all business paperwork this should have been kept for 6 years after the company stopped trading this could be the proof that the company not you are liable for the rates have you any paperwork that can help you with this ?

[peter.k]

Re: Business rate Demand notice

Hi wales01man,

Thanks for info. And you are right, i should have kept it but foolishly didn't. I do have some files with Invoices and some utilities bills for 6-8months but not much more.

[Snoopy1948]

Re: Business rate Demand notice

Thanks for the feedback Peter K ... perhaps you'll let us know how things turn out! Good luck!

[peter.k]

Re: Business rate Demand notice

Thank you all. Only thing now is to compile a response/letter explaining it to council and try and reason it with them. Anyone knows anyone who's good at this stuff (writing professional responses)?

[Snoopy1948]

Re: Business rate Demand notice

Hi Peter K ... I honestly think if you send a letter describing the circumstances very much as I have said, you should get your message across.

Having said that, the letter should be typed and properly presented for maximum effect. Do you know anyone who has office skills to do just that? I have helped a few friends out privately with typing the letters for them and you will have to be prepared for a long haul as correspondence may well go back and for a while. Councils do not give in easily and perseverance does pay.

[peter.k]

Re: Business rate Demand notice

Thank you Snoopy1948.
The issue is not typing as i can do it myself, its the "legal" language and smart words to use. Unfortunately English is not my first or second language and i am rubbish at creating good reading documents. Will try and get something created. Once agan - many thanks for your help.

[peter.k]

Re: Business rate Demand notice

Just a quick update - i have sent a letter and all bills as well as email confirming all this. However council keeps ignoring my letters and simply asks for payment and last night sent yet another Payment Demand notice.