Business Rates Bailiffs: NNDR Liability Orders Explained

Business rates appear on the paperwork as non-domestic rates or NNDR, and the CRAR route is covered separately in bailiffs and your business.

The business rates route is essentially the council tax machinery pointed at a business, but the protections work differently at a shop or unit than they do at a home, and knowing which goods are actually at risk changes how worried you should be.

How the council gets a liability order

The route runs: demand notice, reminder, then a magistrates' court summons. At the hearing the council asks for a liability order under the non-domestic rating enforcement regulations. The court checks that the rates were properly demanded and are unpaid; it does not hear argument about whether the valuation is too high or a relief should have been given, which is why turning up to dispute your rateable value achieves nothing there.

The order adds the council's reasonable costs, and an application cannot be started more than six years after the sum became due. If you believe the underlying liability is wrong, occupation dates, empty property status, small business rate relief, that fight happens with the council and the Valuation Office Agency, not in the magistrates' court. See liability order for how these orders work generally.

What the liability order lets the council do

Since 2014 the old "distress" wording has gone: the regulations now say payment may be enforced using the Schedule 12 taking control of goods procedure, so the enforcement agents who attend operate under exactly the rules described across this site. That means a notice of enforcement with at least 14 clear days before any visit, attendance only between 6am and 9pm, and the fixed fee scale, £79 added when the case reaches an agent and £247 plus a percentage once a visit happens.

One difference from High Court and county court money judgments is worth knowing: the power to apply to court for permission to force entry to business premises exists only for judgment debts, not for business rates. For an NNDR liability order, entry to your premises must be peaceable, through an open or unlocked door, so a locked unit and an instruction to staff not to let agents in is a lawful, if temporary, defence.

Whose goods are at risk at the premises

Agents may only take control of goods belonging to the debtor named on the liability order. At business premises that single rule does most of the work:

• if the ratepayer is a limited company, only the company's goods are at risk, not the director's personal property or staff belongings
• if you trade as a sole trader, business and personal assets are legally the same pot, which cuts the other way too, goods at home could in principle be pursued
• leased, hired and financed equipment generally belongs to the finance or hire company, not the debtor, and card machines, leased vans and rented coffee machines routinely fall outside what can be listed. Be ready to prove it with agreements and invoices.

The exempt goods rules were written mainly around households, so the domestic exemptions do little at a commercial unit. The one that matters is the tools of the trade exemption: items necessary for personal use in the debtor's trade or business are protected up to an aggregate value of £1,350. That wording is built around an individual, so it can shelter a sole trader's essential kit, but it offers little comfort for a company's stock or equipment, and anything above the cap is exposed either way. See what can bailiffs take for the full exemption list.

The backstops: insolvency and, in England, committal

A liability order also lets the council pursue insolvency, bankruptcy for an individual ratepayer or winding-up for a company, and for larger debts councils increasingly go straight there, because a petition concentrates minds faster than a visit. In England a council can also apply to commit an individual ratepayer to prison where agents could not find sufficient goods, though this is rare and requires the court to find wilful refusal or culpable neglect.

Unlike council tax, the business rates regulations contain no attachment of earnings route, so there is no equivalent of the wage deductions described in attachment of earnings. Goods, insolvency and committal are the whole enforcement menu, which is why the goods stage carries most of the weight.

If the business has closed

Enforcement follows the debtor, not the address. If a company has been dissolved or is in liquidation, agents cannot lawfully take goods for its rates debt from whoever now occupies the unit, and directors are not personally liable for a company's rates except in unusual circumstances such as personal guarantees given to the council. Former sole traders remain personally liable after closing, and the debt behaves like any other personal debt of theirs.

If agents are attending premises you occupy for a previous occupier's debt, say so in writing with your lease or licence, and see our get help service if it does not stop.