Can’t afford to pay business rates – what options are available?

What relief is available if I cannot afford to pay business rates?

The rateable value of your business premises determines your business rate liability, and this can vary considerably around the country. So if you’re having trouble paying your business rates, what can you do?

Do you have reason to contest your business rate level?

If you know that other similar premises nearby attract lower business rates, you might want to contest your own business rate liability. Take care when making this decision, however, as the outcome may be higher, rather than lower, business rates. 

It’s advisable to seek professional assistance if you believe you have reason to challenge your business rates. You’ll obtain a clearer picture of the business rate levels in your area, and reliable guidance on whether a challenge is appropriate.

When you can’t afford your business rates

When your company can no longer afford to meet its business rate liability, there may be several options open to you. These could include:

Business rates relief

The government operates a variety of business rates relief schemes, including small business rates relief and rural rates relief. You would need to get in touch with your local council to see if you qualify for these or other locally available schemes.

Negotiate with your local council

If you contact your local council they may be willing to arrange a payment plan for lower instalments over a longer period of time. It’s important to communicate with them as soon as possible, however – preferably when you know you won’t be able to meet an upcoming payment, but before it’s actually missed.

Contact a licensed IP

A licensed insolvency practitioner will clearly present your options if you can’t afford to pay your business rates, and provide reliable advice on the best way to proceed. If your company has experienced significant financial decline, you may need to enter into an official insolvency process.

Seek professional help when you can’t pay your business rates

Additional finance

Your company may still be viable even if there are multiple debts in addition to your business rates arrears. The situation could be remedied by introducing further working capital, for example, which would allow you to meet key financial liabilities on a day-to-day basis.

Company Voluntary Arrangement (CVA)

If your business owes more than one debt but this poor financial position is believed to be temporary, you may be eligible to restructure your debts within a CVA. Once the terms are agreed, a Company Voluntary Arrangement becomes legally binding on all parties. It can help a company escape debt by making a single monthly repayment rather than multiple payments, distributing it between the creditors included in the agreement.

Creditors’ Voluntary Liquidation (CVL)

If it’s not possible to rescue your company, a voluntary liquidation procedure exists that prioritises creditors’ interests and offers some protection against allegations of misconduct as a director.

Creditors’ Voluntary Liquidation means the end for your business, which closes down following the sale of assets. A licensed IP must be appointed to act as liquidator, and by taking proactive steps to limit creditor losses, you comply with the stringent insolvency laws of the UK. A further benefit of entering a CVL when there are no other options, is that you could be eligible to claim statutory redundancy pay as a director.

Other options may also be available, so for more information on what to do when you can’t afford to pay business rates, please contact our team of licensed IPs at UK Liquidators. We offer free, same-day consultations and operate local offices extensively throughout the UK.