Business rates and the bailiffs

Dominic Laurie
Working Lunch

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In the downturn, many small businesses are finding it harder to pay bills such as business rates.

Especially as their customers have less money to spend on all but the most essential items.

Hairdressers like Alex Ciangola's Eclipse in Camden, North London, are suffering.

Mr Ciangola has noticed that his clients are now having their hair cut every six weeks instead of every four. In spite of current slow trading, he says he's making enough money to cover costs.

However, other small shopkeepers he knows aren't so lucky.

Revenue and rent

Revenues are going down, but costs aren't. Rents stay the same, as do business rates, which were calculated in pre-recession times.

So payments for business rates, which can amount to more than £1000 a month, end up getting skipped.

Camden, the local authority that collects the rates in Mr Ciangola's area, sometimes has to resort to sending the bailiffs round.

Alex Ciangola says he knows of 65 local businesses which have had the debt collectors round in recent months, although Camden council says that its use of bailiffs is lower this year than previously.

Debt at the door

Don't panic, says debt expert Beccy Boden-Wilks

If a debt collector does come to the door of your business, the advice is not to panic, says Beccy Boden-Wilks from National Debtline.

"Complete a budget sheet to show them that you can afford to make an offer to clear the arrears in a reasonable period of time, maybe three or six months.

"Bailiffs don't really want to come and take your goods and to have to sell them", she says. "It's much quicker and easier for everybody all round if they can accept a reduced payment offer".

Top tips

Beccy's advice to small businesses who have the debt collectors round...

• Bailiffs need to gain peaceable entry; this is often made easier for bailiffs with open door firms such as shops, pubs, and restaurants

• Bailiffs can enter property and then do a levy of goods to be removed if the business rates arrears are not settled

• Check that you are eligible for small business rates relief on the Business Link website

• Ask the local authority to recall the debt back from the bailiffs. Complete a business budget sheet and make an offer to repay the arrears at a rate you can afford. You can also give the bailiff a copy of your budget sheet

• Contact Business Debtline to complete a budget sheet, and discuss whether your business is viable

• Think carefully before taking out further credit to keep your business going.