The paper deals with the issues of enforcement and removal of debtor's goods (levying of distress) for rate debt. It follows publication last September of three consultation papers on improving council tax debt collection procedures.
In response to a written question from Graham Stringer (Manchester, Blackley), local government minister Hilary Armstrong said:
'Many of those who responded to our consultation exercise on council tax debt collection expressed the view that similar changes should be made to the non-domestic rating regime. We have decided that, where appropriate, the non-domestic collection and enforcement regulations should be brought into line with those for council tax. I am publishing today a consultation paper Changes to the Enforcement and Levying of Distress for Non-Domestic Rate Debts setting out our proposals.
Proposed changes include requirements that:
- only certified bailiffs may levy distress (remove a debtor's goods) to recover rate debts;
- debtors should be given advance warning of the bailiffs' involvement in the recovery process and of fees for which they may become liable;
- adequate notice should be given of court hearings;
- the fees payable in connection with distress should be updated.
Some of the proposed changes could be made by secondary legislation and subject to the outcome of this consultation, the intention is to introduce them with effect from 1 October 1998. Other proposals would require the amendment of primary legislation, for which an early opportunity would be sought.
Copies of the consultation paper, Changes to the Enforcement and Levying of Distress for Non-Domestic Rate Debts, are available from Geoff Salvatore (tel: 0171 890 4223), Non-Domestic Rates Branch, Zone 5/J1, Eland House, Bressenden Place, London SW1E 5DU. The consultation paper is available on the Internet at the Local Government Finance Directorate website http://www.local.detr.gov.uk. Closing date for comments is Monday 3 August 1998.
The regulations governing demands for non-domestic rates and the recovery of unpaid sums are set out in the Non-Domestic Rating (Collection and Enforcement) Regulations 1989 Statutory Instrument 1989/1058 - as amended. Where non-domestic rates are unpaid and reminders ignored, the local authority can apply for a liability order through the magistrates court to enable then to recover the outstanding sum, plus costs. The liability order gives the authority powers to recover the debt by levying distress, seeking a winding up order against a company or initiate bankruptcy in the case of an individual.
The levy of distress is the removal of a debtor's goods so that the proceeds of their sale can be applied to the debt. However, goods need not be removed if the debtor agrees with the bailiff to the payment of the debt over a given period. Fees are payable in connection with the levy, or attempts to levy distress, and are payable by the debtor. The current fee levels are set out in schedule 3 of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 Statutory Instrument 1989/1058 - as amended.