The occupier of a non-domestic property normally pays the business rates – usually this is the owner-occupier or leaseholder. If a property is empty, the owner or leaseholder may be liable to pay business rates on the property after the appropriate exemption period has expired.
Non-domestic properties - often referred to as “hereditaments” - are business properties such as shops, offices, warehouses and factories and any other property that is not classed as domestic, such as that occupied by charities and voluntary organisations. In some cases, properties may be used for both domestic and non-domestic use (for example, a shop with a flat above it), in which case both council tax and business rates will be charged on the relevant portion of the property.
Reference is made in application forms, regulations etc., to a 'hereditament'. Section 115(1) of the General Rate Act 1967 defines a hereditament as being 'A property which is or may become liable to a rate, being a unit of such property which is, or would fall to be, shown as a separate item in the valuation list’.
Unless you plan to let your holiday home for at least 140 days a year, you will not have to pay business rates on the property. You will have to pay council tax instead.
If you offer bed-and-breakfast accommodation in your own home, to six people (or fewer), you will not have to pay business rates as long as you are living in the property. Instead, you will have to pay council tax on the whole property.
If your holiday home is available to let for 140 days a year or more and actually let for 74 days a year or more, or you provide bed-and-breakfast for more than six people at any one time, you will have to pay business rates on the whole or part of your property. You will still have to pay Council Tax on the part of your property you use as your home.
The government normally changes the multipliers every year to move in line with inflation and, in the case of the non-domestic rating multiplier, to take account of the cost of funding small business rate relief. This is so that the value of the money raised through business rates to fund local services each year stays the same.
A revaluation of the rateable values of non-domestic properties is undertaken by the Valuation Office Agency every five years. The purpose of a revaluation is to update the rateable value in line with changes in the property market.
The valuation date for the 2005 revaluation is 1 April 2003. The new rateable values came in to effect on 1 April 2005.
The valuation date for the 2010 revaluation is 1 April 2008. The new rateable values came in to effect on 1 April 2010.
The valuation date for the 2017 revaluation is 1 April 2015. The new rateable values came in to effect on 1 April 2017.
Your rates are not a payment for specific services but are a contribution from businesses towards all of the services provided by the Council for the community, such as local transport, education and housing, all of which indirectly benefit businesses in the area.
Councils do not have a statutory duty to collect commercial refuse; however we are required to make suitable arrangements to have such waste collected if this service is required.
The Council acts as the collection agent for the Government and all sums collected by the Council are paid into the Central Pool. Billing, collection and recovery has to be carried out in accordance with the regulations made the Government. If you fail to pay your instalments by the date given on your bill, recovery action will commence in accordance with the statutory regulations.
A reminder will be sent approximately 14 days after the instalment became due.
If you fail to pay the amount shown on the reminder within seven days or any subsequent instalment as it becomes due, a summons will be issued for you to appear in the Magistrates Court. Unless payment is received the Council will apply to the Court for a Liability Order which allows the Council to use enforcement agents or if appropriate to instigate bankruptcy or liquidation proceedings.
By law, the Council must send a Reminder if your instalments are not up-to-date. If you do not bring them up-to-date within 7 days and then keep them up to date, you lose the right to pay by instalments. If you do not comply with the Reminder, you will be sent a Summons and will have to pay court costs as well as your Business Rates.
If you receive a Summons and do not pay in full before the hearing, the Council will apply for a 'Liability Order' which gives the Council the right to use bailiffs to obtain payment, to start Bankruptcy/Liquidation proceedings in certain circumstances, or to ask the Magistrates Court to commit a person to prison.
If you are having difficulty paying, please contact us at the Business Rate office and we will try to come to an arrangement for payment with you.
By law, costs are payable when a Liability Order is obtained. Once a Summons has been issued, the only way to stop the Council from asking for a Liability Order is to pay the full amount before the hearing. Even when an arrangement is made, the Council still has to obtain a Liability Order, but we will not take any of the actions which it allows us to take as long as you keep to the arrangement we have made with you.
Under rating law, we must issue a bill to the occupier of a property regardless of any agreement, which may exist between the occupier and the Landlord. You may wish to contact your landlord either to arrange that he or she will pay on your behalf, or to renegotiate your rent agreement to remove the rate element. If the account is not kept up to date, action will have to be taken against you, not your landlord, because you are the person who is liable.
If we have not answered your question please email business.rates@tendringdc.gov.uk
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