20 Recovery and Enforcement
The detailed arrangement for
recovery and enforcement of overdue business rates involve :
20.1 The
Summons
If an amount for which a
further notice or reminder notice has been
served remains unpaid the billing authority may make a complaint to
a Justice of the Peace. The complaint must be made within six years
of an amount becoming due and the complaint will result in a
summons being issued for the ratepayer to appear at a
hearing. The cost
of making the complaint and issuing the summons may be charged to
the liable person.
A Justices' Clerk is authorised
to consider a complaint and issue a summons. The signing of the
summons by facsimile or rubber stamp was confirmed by the High
Court and although billing authorities print the summonses for the
Justices, it is the Justices who issue the summons, not the billing
authority. A summons must be served at least 14 days before the
hearing and the summons must state the time and date of the
hearing. The Local Government Act 1992 does not specify the form of
a summons and it is generally accepted that the standard form for
civil procedures is adequate.
A
summons may be served on a person by:
- Hand delivering it to him
- Leaving it at his usual or last known place of abode, or in the
case of a company, at its registered office
- Sending it by post to him at his usual or last known place of
abode, or in the case of a company, to its registered office,
or
- Where it relates to a business, by leaving it at, or sending it
by post to him at his place of business
- Leaving it at, or by sending it by post to him at, an address
given by the person as an address at which service of the summons
will be accepted
20.2 The Hearing
If the business rate and costs
are paid before the hearing date then the hearing need not proceed.
If a person fails to attend the hearing the certificate of posting
can be entered into evidence as service of the summons. The billing
authority is required to submit evidence of the proof of liability
and the ratepayer may submit evidence in defence against the issue
of a
liability order. Regulations provide for
computerised records to be admissible as evidence. Regulations also
state that appeals regarding the valuation of a property or its
inclusion in the local rating list may not be raised at the hearing
of a summons.
The authorised person attending
for the billing authority will give evidence of proof of liability
on oath that:
- The business rate poundage has been made and published
- An entry for the property appears in the local rating list
- A demand notice has been served
- A further notice or reminder notice has been served
- The amount became due less than six years ago
- A summons has been served under
the specific rules
- The sum claimed, including costs, has not been paid
It is a
matter for the Court to determine what is a valid defence but it is
likely to include where one or more of the matters listed in 'proof
of liability' are incorrect or insolvency proceedings have been
commenced regarding the ratepayer.
20.3 The Liability Order
Regulations state that "The court
shall make the order if it is satisfied that the sum has become
payable by the defendant and has not been paid". The order is made
in respect of the sum payable and the costs reasonably incurred by
the applicant in obtaining the order.
Where the business rates are paid
before the hearing date but the costs are not then the court shall,
if requested by the billing authority, make the order in respect of
the costs alone. The issuing of the liability order then enables
the billing authority to use a number of enforcement
options in order to settle the debt. An appeal against the
issuing or non-issuing of a liability order is by a request for a
case to be stated for the opinion of the High Court.
Additional costs are awarded by the
Court for the issuing of the liability order but the regulations do
not specify the scale of those costs. The scale is usually subject
to regional discussions between representatives of billing
authorities and justices clerks and when agreed are applied
uniformly across the region.
20.4 Enforcement Options
The issuing of a liability order
to a billing authority empowers the authority to obtain relevant
information about the ratepayer and undertake enforcement by:
20.5
Distress
A liability order may be referred
to a bailiff for collection. The bailiff has the legal power to
take away a debtor's possessions and sell them in order to pay off
the debt. The process is known as Distress. The bailiff is entitled
to charge costs and fees for the activities performed and some, for
instance the hiring of a van to remove goods, can be expensive.
20.6 Insolvency
Where the outstanding debt is above
prescribed limits and is covered by a liability order the billing
authority can apply for the ratepayer to be declared insolvent.
Different arrangements and consequences apply to personal
insolvency (bankruptcy) and corporate insolvency (liquidation) and
those arrangements and consequences are specialist matters. However
part of the process includes the option for all parties to agree a
voluntary arrangement for the person or company to make payments to
their creditors and avoid the formal proceedings.
Only business rate debts incurred
as at the time of the insolvency are included in the insolvency.
Further liabilities that accrue after the insolvency are subject to
the normal business rate processes.
20.7 Payment
Arrangement
The only assumption the legislation
makes regarding payment arrangements is that on receipt of a demand
notice a ratepayer will pay by one or more monthly instalments.
However, a billing authority can agree a payment arrangement with a
ratepayer in certain circumstances and any ratepayer having
financial difficulties should contact the rates section.
20.8
Prison
Where other enforcement options
have been unsuccessful the billing authority may make an
application to the Magistrates Court for the commitment to prison
of a ratepayer who is an individual. The Court will summons the
person to a hearing to enquire as to his financial means. This is
often referred to as the 'means enquiry hearing'.
The Court has the power to remit
the debt, impose a term of imprisonment of up to 90 days with
immediate effect, or impose a term and suspend the commitment
pending the ratepayer complying with a payment arrangement imposed
by the court. The Council will apply for additional costs. If the
person fails to appear, a warrant will be issued for their arrest
and if he fails to abide by the payment arrangement imposed by the
Court the billing authority may request that he be summonsed again
to appear in front of the Court. At such a hearing the Court has
the same powers as at the original hearing.