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Information: changes to the law on bailiffs On 6 April 2014, the law on bailiffs changed. The information in this fact sheet is based on our understanding of the new rules. Some bailiffs may interpret the new rules differently. It is not yet clear how the new rules will be applied in practice. If you are unsure whether a bailiffs actions are legal, contact us for advice. Bailiffs are also commonly known as enforcement agents. In this fact sheet we use the term bailiff. Use this fact sheet to: get more information about debts to Her Majesty’s Revenue and Customs(HMRC); understand what to do if HMRC take recovery action against you; deal with business rates, rent and utility arrears, accountants’ bills, equipment leases and supplier debts; and find out where to get specialist help and advice. Business Debtline This fact sheet gives information about business debts that self employed people commonly have. We explain how you can deal with these debts if you have stopped trading. We do not give information about debts owed by limited companies. If you are still trading then you need to get more advice and information about running your business and dealing with the ongoing debts your business may have. Contact Business Debtline (BDL) on 0800 197 6026. Debts to HMRC HM Revenue & Customs (HMRC) are responsible for collecting income tax, National Insurance and value added tax (VAT). HMRC are likely to take further action against you more quickly than some other types of creditors. This may mean that you need to treat a debt to HMRC as a priority. However, you may not need to do this if the types of action they can take do not have serious consequences for you. In the following sections we give more information on the different types of debt that HMRC collect and how they can take action to recover the money you owe. If you are not sure whether to treat a debt to HMRC as a priority, contact us for advice. Income tax When dealing with income tax arrears, you need to consider the following points. After completing a tax return, check whether your tax debt is correct. If you think the amount is not correct, contact HMRC to discuss what you think you do owe. If you have not sent HMRC a tax return, your income tax arrears will be estimated. You will be sent a ‘determination’. You have no right of appeal against this determination so if you think the figures are wrong, send HMRC your tax return as soon as possible. Freephone 0808 808 4000 www.nationaldebtline.org September 2016 England & Wales edition Business debts Fact sheet no. 04 EW Business debts My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you work out a budget and give you a personalised action plan setting out practical steps to deal with your debts. www.mymoneysteps.org Freephone 0808 808 4000 www.nationaldebtline.org Page 1 of 13

Transcript of )UHHSKRQH ZZZ QDWLRQDOGHEWOLQH RUJ …€¦ · ([wuddgylfh xsgdwh+05&,wlvlpsruwdqwwrwhoo+05& 1,&2...

Page 1: )UHHSKRQH ZZZ QDWLRQDOGHEWOLQH RUJ …€¦ · ([wuddgylfh xsgdwh+05&,wlvlpsruwdqwwrwhoo+05& 1,&2 zkhq\rx vwrsshgehlqjvhoi hpsor\hg ,qirupdwlrq qrwsd\lqjfodvv frqwulexwlrqvrqwlph,wlvdfulplqdoriihqfhqrwwrkdyhsdlgfodvv

Information:changes to the law onbailiffsOn 6 April 2014, the law on bailiffs changed. Theinformation in this fact sheet is based on ourunderstanding of the new rules. Some bailiffsmay interpret the new rules differently. It is notyet clear how the new rules will be applied inpractice. If you are unsure whether a bailiffsactions are legal, contact us for advice.

Bailiffs are also commonly known as enforcementagents. In this fact sheet we use the term bailiff.

Use this fact sheet to:

get more information about debts to Her Majesty’s Revenue and Customs(HMRC);

understand what to do if HMRC take recovery action against you;

deal with business rates, rent and utility arrears, accountants’ bills, equipment leases and supplier debts; and

find out where to get specialist help and advice.

Business DebtlineThis fact sheet gives information about business debts that self­employed people commonly have. We explain how you can dealwith these debts if you have stopped trading. We do not giveinformation about debts owed by limited companies. If you arestill trading then you need to get more advice and informationabout running your business and dealing with the ongoing debtsyour business may have. Contact Business Debtline (BDL) on0800 197 6026.

Debts to HMRCHM Revenue & Customs (HMRC) are responsible for collectingincome tax, National Insurance and value added tax (VAT).HMRC are likely to take further action against you more quicklythan some other types of creditors. This may mean that youneed to treat a debt to HMRC as a priority. However, you maynot need to do this if the types of action they can take do nothave serious consequences for you. In the following sections wegive more information on the different types of debt that HMRC collect and how they can take action to recover the moneyyou owe. If you are not sure whether to treat a debt to HMRC as a priority, contact us for advice.

Income taxWhen dealing with income tax arrears, you need to consider the following points.

After completing a tax return, check whether your tax debt is correct. If you think the amount is not correct, contactHMRC to discuss what you think you do owe.

If you have not sent HMRC a tax return, your income tax arrears will be estimated. You will be sent a ‘determination’.You have no right of appeal against this determination so if you think the figures are wrong, send HMRC your taxreturn as soon as possible.

Freephone0808 808 4000www.nationaldebtline.org

September 2016

England & Wales edition

Business debts

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 1 of 13

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Information:outstanding tax returnsIf any of your tax returns are still outstanding,HMRC will not usually allow you further time topay your debt back in instalments.

Warning:outstanding VAT returnsIf any of your VAT returns are still outstanding,HMRC will not usually allow you further time topay your debt back in instalments.

Send in your tax return even if it is late. However, if you send in your return after the deadline, penalties will be addedto what you owe. The deadline for sending in your tax return depends upon how you send it in. If you send in your taxreturn by post, the deadline is usually 31 October each year. If you send in your tax return over the internet, thedeadline is usually 31 January each year. Penalties for late tax returns are a complicated area. Contact us foradvice.

HMRC will add interest to your tax debt at a set rate. It is very rare for HMRC to stop adding this interest. This meansthat the amount you owe can increase quickly.

It is important to try to make an arrangement to pay with HMRCcollectors as soon as possible. Collectors are people employedby HMRC to collect debts owed to them. You may need to treatincome tax arrears as a priority debt. Make an offer to clear thearrears and use your budget to show what you can afford.

The collector will sometimes accept instalments to clear whatyou owe. However, this will usually be over a short period, forexample between three and six months, depending uponyour circumstances. If you need longer than this to pay backwhat you owe and you have previously had a good payment record, the HMRC Business Payment Support Helplinemay agree a longer repayment period with you. Contact them on 0300 200 3835.

Value added tax (VAT)VAT is a tax that is charged on most goods and services thatcertain businesses provide. You should have been registered topay VAT if your annual turnover was above a certain amount.The amount you should have paid will be the VAT on your salesminus the VAT on purchases for goods and services youbought for your business.

Contact HMRC to de­register for VAT if you have not alreadydone this. This will help to make sure they have worked out howmuch you owe properly.

Make sure all of your VAT returns have been sent to HMRC. If your VAT bill has been assessed and you disagree withthe amount claimed, you can ask for a review within 30 days. If you still disagree with the decision, you can appeal to aVAT tribunal. If you are considering making an appeal, contact us for advice.

After you have stopped trading, it is usually possible to come to a payment arrangement with HMRC over a shortperiod of time once you are no longer VAT registered. However, penalties and interest for late payment will be addedto your VAT bill.

You may need to treat VAT arrears as a priority debt. Use your budget to help you work out what offer of payment tomake. Contact us for advice.

If your budget shows that you are offering all that you can afford, HMRC will usually allow you to pay the VAT arrearsover a maximum of 12 months. Call the HMRC Business Payment Support Helpline on 0300 200 3835. However,if you do not send HMRC a budget, they may ask you to clear your VAT arrears within 3 months or less.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 2 of 13

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Extra advice:update HMRCIt is important to tell HMRC (NICO) when youstopped being self­employed.

Information:not paying class 2contributions on timeIt is a criminal offence not to have paid class 2contributions on time and HMRC can ask themagistrates'; court to fine you for non­payment.In practice, this is unlikely. If HMRC threaten to dothis, contact us for advice.

National InsuranceNational Insurance contributions are dealt with by the HMRC National Insurance Contributions Office (NICO). There aredifferent types, or ‘classes’, of National Insurance contributions.

Class 1 contributionsClass 1 contributions are paid by employees unless your earnings are below a certain limit.

Class 2 contributionsClass 2 contributions are paid by self­employed people as a weekly flat rate unless your earnings are below a certainlimit. If your earnings were below this limit and you did not ask HMRC for exemption from paying class 2 contributions, theamount you owe may be wrong. Contact us for advice. Arrears of class 2 contributions are collected by the ‘NationalInsurance Contributions Office’ at HMRC.

Class 4 contributionsClass 4 contributions are paid by self­employed people in addition to class 2 contributions, where your earnings areabove the personal tax allowance for the year. The amount changes every year. Contact us for advice.

National Insurance arrears may need to be treated as a priority debt. Use your budget sheet to work out an offer ofpayment that you can afford. Contact us for advice.

Further action HMRC can takeHMRC can try to recover the money you owe in a number of different ways.

Changes to your tax codeFor some debts to HMRC, if you are currently working for an employer either full or part­time, HMRC may try to recoverthe money by changing your tax code. This allows them to recover the debt from your wages before you get them. If youthink HMRC are trying to do this for a debt you owe, contact us for advice.

BailiffsThe ‘bailiff’ will be a collector appointed by HMRC Commissioners. HMRC can use bailiffs to recover debts without gettinga court order first. This is known as 'taking control of goods'.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 3 of 13

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Extra advice:bailiffs' entry rightsYou do not have to let the bailiffs into your homebut they can come in through open doors. If yourefuse entry to an HMRC bailiff, they may applyfor a warrant to break into your home, but this isunlikely to happen very often. If you park yourvehicle on a public road, HMRC bailiffs can useforce to get into the vehicle and take control of it.If you park your vehicle on your drive, the bailiffsmay clamp or remove it. If you can, keep yourvehicle locked in a garage.

Information:types of taxThe minimum amount of £1,000 that must beowed to HMRC can be made up of any type of taxincluding income tax and VAT.If you don’t agree that HMRC can take this action,for example the debt has been paid, you canobject to HMRC. Contact us for advice.

Extra advice:joint accountsHMRC can ask for money to be taken from a jointaccount. Only money in the account belonging tothe person who owes the debt can be taken.However, HMRC will assume balances in jointaccounts are split equally. For example, if theaccount is in two names, and only one personowes the debt, HMRC will say 50% of the moneyin the account can be taken.

If they gain entry to your home, the bailiff will usually list items and ask you to sign a ‘controlled goods agreement’. Thisallows you to keep use of the goods listed whilst you make payments by instalments. If you do not pay, the goods listedon the controlled goods agreement can be removed. HMRC bailiffs may also remove your goods straight away or lockthem up on your premises until you pay what you owe. You should try to agree affordable payments by instalments.

There are some goods which cannot be taken such as basic household items and goods owned by other people. HMRCcan take goods used in your business, if you are still self­employed. Contact us for advice.

Direct deductions from bank accountsIf you owe HMRC at least £1,000 they can ask your bank if there is any money in your account to pay this debt. They willnormally be able to do this 30 days after you have the letter from HMRC telling you how much you owe.HMRC can do thiswithout going to court first.In most cases if you account is less than £5,000 in credit, HMRC cannot take any money.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 4 of 13

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See our fact sheet:County Court - chargingorders.

See our fact sheet:County Court - replying to aclaim form.

County court actionHMRC may make a claim through the County Court to get a county court judgment (CCJ) against you. This may be doneif bailiff action is not successful. County court action is most commonly used to recover income tax and National Insurancearrears. A CCJ will be recorded on your credit reference file for six years and can affect your ability to get further credit.

When county court action is taken against you, you will get a ‘claim form’. This gives details about the debt and tellsyou how much the creditor says you owe them.

You can complete the ‘admission’ form if you admit the debt and want to make an offer to pay the debt in instalments.

If you want to dispute all or part of the debt, contact us for advice.

The County Court should consider your circumstances and your income and outgoings before making a decision abouthow the debt should be paid back. The final decision about how much you should pay back each month is taken by thecourt, even if the collector wants a higher amount.

If HMRC applied for a CCJ against you on or after 1 October2012, they can apply to secure the debt against any propertyyou own, even if you have not missed payments on the CCJ. IfHMRC applied for a CCJ against you before 1 October 2012,the rules are different. Contact us for advice.

If you miss payments on a CCJ, HMRC can take other types of action against you through the County Court, which couldinclude:

taking regular deductions from your wages if you areworking, called an ‘attachment of earnings order’;

freezing money in your bank account, called a ‘third partydebt order’; and

applying to court for a ‘judgment summons’.

Judgment summonsThe court can issue a ‘judgment summons’ for you to go to court and explain why you have not paid. If HMRC do this, youcan be sent to prison if you have:

had the money to pay the amount of the judgment summons since the CCJ was made; and

wilfully neglected or refused to pay as the court ordered.

In practice, HMRC do not use this procedure very often.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 5 of 13

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Information:magistrates' courtbailiffsIf you do not pay, magistrates' court bailiffs couldbe used to collect the debt. Magistrates' courtbailiffs can force entry to your home to removegoods, but this should only be done as a lastresort and when it is reasonable. Contact us foradvice.

See our fact sheet:Magistrates' court fines.

See our fact sheets:Bankruptcy and StatutoryDemands.

Magistrates’ court actionIf you owe less than £2,000 on income tax or National Insurance, in some situations HMRC could recover the debt throughthe magistrates’ court. The process is called ‘summary proceedings’ but is not used very often. The collector has 12months to start summary proceedings once the debt is due.

You will receive a magistrates’ court summons to go to a hearing. Try to make an arrangement to pay with thecollector. If this is agreed, the magistrates’ court may accept this at the hearing. If you are unable to go for a very goodreason such as illness, see if the collector will ask the court to give you more time by delaying the hearing.

Take any evidence of recent payments with you to the hearing. You can ask the magistrates’ court for time to pay thedebt back in instalments that you can afford. Take your budget and proof of your income to the hearing.

HMRC do not usually make applications to send people to prison. However, debts owed to HMRC may still need to betreated as priority debts.

BankruptcyIf you owe £5,000 or more, HMRC could apply to make youbankrupt. Bankruptcy means that valuable things you own (your‘assets’) could be sold to help pay your debts. You wouldusually receive a ‘statutory demand’ before being madebankrupt. This is a legal document which shows what HMRCclaim you owe.

Bankruptcy should be a last resort for HMRC after othermethods of recovering the debt have been attempted. It is very important to let the collector know if you have very littleincome or no assets, particularly if your home is worth less than any mortgage or secured loans on it. If the collector cansee that you do not have any assets, they may decide not to make you bankrupt.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 6 of 13

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Extra advice:send in your tax returnsIf you have not already sent your tax returns toHMRC, it is very important that you do this. Thiswill allow HMRC to calculate your debt accurately.You may find that you owe less than you firstthought.

Information:complaining to HMRCDetails of how to contact HMRC to make acomplaint can be found on their website.

How HMRC should behaveHMRC have a service commitment laid out in a Charter (calledthe ‘HMRC Charter’) which includes the following commitments.

HMRC will act ‘fairly and impartially’ by:treating your affairs in strict confidence within the law.

HMRC will ‘communicate effectively’ by:providing clear and simple guidance; and

giving accurate and complete information.

HMRC will provide ‘good quality service’ by:handling your affairs promptly and accurately;

being accessible:

keeping your costs to a minimum;

helping customers with special needs; and

being courteous and professional.

Complaining about HMRCIf you are unhappy with the way HMRC has dealt with your case,there is a complaints procedure that you can follow.

You may want to complain if you have been refused time to payyour arrears and you feel that this is unreasonable in view ofyour circumstances.

You should first contact the HMRC office that has beendealing with your case. If you are not happy with theresponse, your complaint will usually be passed to a ‘complaints handler’. HMRC accept complaints by telephone andin writing.

If you are still not happy with the response, you can ask HMRC to look at your case again. They will usually ask adifferent complaints handler to consider your case.

After going through these steps, if you are still not happy you can contact the Adjudicator’s Office. See Usefulcontacts at the end of this fact sheet. The adjudicator is not part of HMRC and they can act as an impartial referee inunresolved complaints.

If you are not happy with a decision that HMRC has made, such as the amount of tax you owe or the charges theyhave asked you to pay, you may need to follow the review and appeals process instead of complaining. Contact usfor advice.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 7 of 13

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Business ratesBusiness rates are a tax you have to pay to the council. If you have stopped trading, tell the council straight away. Youmay still be responsible for paying business rates if you are still leasing premises, even if they are empty. However, theremay be discounts you can claim.

You may be entitled to ‘relief’ from business rates in certain circumstances. Contact us for advice.

Check the bill to make sure it has been calculated correctly. Contact us for advice.

Business rates are a priority debt. Use your budget to work out an offer of payment that you can afford.

Remitting business ratesThe council has the power to remit or ‘write off’ all or part of your business rates arrears. In practice, local authorities donot agree to this very often. However, it may be worthwhile making an application if you feel that you can show that youare in exceptional circumstances.

In order to remit business rates, the council must be satisfied that:

you would suffer hardship if they did not remit the business rates: and

it is reasonable for them to remit your business rates, taking into account the interests of local people.

Exceptional circumstances may be where:

your business is essential to the local community. This may include a rural post office, a nursery and day care facilitieswhere there are no other similar services in the area; or

your business has failed, you are left with arrears on business rates and your personal circumstances mean you areunable to make an offer of payment. If you now receive only benefit income and this is unlikely to change in the future,your circumstances are more likely to be considered exceptional. For example, this could apply if you are sufferingfrom long­term ill health.

You need to write to the council asking for your business rates to be remitted under section 49 Local GovernmentFinance Act 1988. You also have to:

show how you would suffer hardship;

show what steps have been taken to make the business work; and

provide details of your budget and any assets you have.

Collection proceduresTreat business rates arrears as a priority debt. This is important because the council has a range of powers to recoverbusiness rates arrears. They should send you a reminder notice when you fall behind on your payments. If you still do notpay after reminders have been sent, the council can ask the magistrates’ court to make a liability order. This allows thecouncil to try different ways of collecting the debt from you.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 8 of 13

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Warning:bailiffs' entry rightsBailiffs cannot force their way in if they have notgained entry peacefully before. If the bailiffs havenot yet been into your home, you can choose notto let them in. Contact us for advice.

See our fact sheet:Council tax recovery.

Extra advice:get further helpIf you have not been able to get help before thehearing you can ask to speak to the duty solicitorin the court on the day.

Unlike council tax, you cannot have money taken out of your benefits directly to pay back business rates arrears.

BailiffsThe council can send bailiffs to business premises or yourhome. The procedure is almost exactly the same as for counciltax. They cannot take protected goods such as basic householditems. The main difference is that they can take tools of thetrade.

If the bailiffs have not yet taken control of any vehicles you own,keep them safe by locking them in a garage or parking themwell away from your property. However, if you do park yourvehicle away from your property and the bailiffs find it, they mayclamp it or use force to get into it and take it away.

Contact the bailiffs and the council and try to negotiate an offer of payment that you can afford. Start paying immediately.

ImprisonmentIf the council has tried to use bailiffs and you are still in arrears,they can ask for a hearing in the magistrates’ court called a‘means enquiry’. The court should not send you to prison unlessthey can show that you are guilty of:

wilful refusal (you have deliberately refused to pay); or

culpable neglect (you could afford to pay but did not).

The court can order all or part of your business rates arrears tobe written off in exceptional circumstances, but are more likely to tell you to pay the arrears off in weekly instalments.

You must go the hearing and explain why you have not been able to pay. Take your budget.

If you do not pay the amount ordered, you will usually have to go to court again and may be sent to prison. It is veryimportant to get advice before the hearing. Contact us for advice.

Gas and electricity arrearsIf you have debts from your business premises for gas and electricity, suppliers have the same powers of recovery foreach.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 9 of 13

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A debt from your business premises can be transferred to your home account if the accounts are in the same name andprovided by the same supplier. In this situation, you could be disconnected at home for arrears from your businesspremises. If this is the case, you must treat electricity and gas arrears as priority debts. Make an offer of payment to clearthe arrears as well as paying your current bill.

Water ratesYou can no longer be disconnected at home for water rates arrears. This applies to your ongoing water rates bill and alsoa water debt for any previous property you lived in or traded from. The water company may make a claim through theCounty Court to get a county court judgment (CCJ) against you. This is a court order which states what you owe and howit should be repaid. Therefore it is a good idea to build your ongoing water rates into your budget.

Make an offer of payment you can afford on the arrears on the same basis as your credit debts.

Old business suppliersIf you have debts to businesses that used to supply goods and services to you, they could take further action against youto recover their money.

Debt collection agenciesSometimes old suppliers will use a ‘debt collection agency’ to try to collect their money. Don’t worry. A debt collectionagency has no greater powers than the organisation you owe the money to. They are not bailiffs and have no right tocome into your home.

County court actionOld suppliers may make a claim through the County Court to get a county court judgment (CCJ) against you. The suppliershould send you a letter before they start court action telling you how to pay and how to contact them to discuss whatrepayment options you might have.

The county court process is the same as described earlier for debts to HM Revenue & Customs. See the earlier sectionCounty court action under the heading Debts to HMRC.

Debts to suppliers are not usually regulated by the Consumer Credit Act 1974. If this is the case and you do not keepto the payments the court has ordered on a CCJ, bailiffs called High Court Enforcement Officers could be used to recoverthe debt. If High Court Enforcement Officers have not been into your home before, do not let them in. This is becausethey should not force their way into your home unless they have been in peacefully before and taken control of yourgoods properly.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 10 of 13

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Information:judgment summonsOld business suppliers cannot use a 'Judgmentsummons' if they are successful in taking countycourt action against you. Therefore, you cannotbe sent to prison for not paying a debt to an oldsupplier, even if you have a CCJ against you.

See our fact sheet:High Court enforcement.

BankruptcyIf you owe £5,000 or more, your old supplier could apply to make you bankrupt. The process used is similar to that fordebts to HMRC. See the earlier section Bankruptcy under the heading Further action HMRC can take for moreinformation.

Business rent arrearsYou may have had a lease for business premises. When you cease trading you may still be liable for ongoing rent andany arrears even if you have given up the lease and returned the keys to the landlord.

Monthly tenancyIf your tenancy runs from month to month, then you must give the correct period of notice before leaving. However yourliability usually ends when your tenancy finishes. Check the terms of your tenancy agreement.

Long-term leaseIf your lease is over a period of years then you may be liable for the rent until the lease expires or a new tenant isfound either by you or the landlord. Check the terms of your lease agreement.

If your landlord evicts you from the business premises the lease will end and you will not be liable for ongoing rent andbusiness rates.

If you are liable for the ongoing rent, you may be able to sublet or ‘assign’ the premises. Check your agreement. Thelandlord should not normally ‘unreasonably refuse’ to let you do this.

Ask the landlord to let you surrender the lease. If the landlord accepts surrender of the lease they will be liable forbusiness rates while the property is empty. Therefore they are unlikely to agree unless they can easily find anothertenant.

A landlord for a business tenancy can send bailiffs to recover rent arrears without a court order. However they canonly usually call at the rented business premises to remove your stock and equipment. Therefore if the premises areempty, bailiffs cannot usually come to your home and remove personal belongings. If your landlord is threatening touse bailiffs for rent arrears, contact us for advice.

After you have stopped trading you can treat the rent as a non­priority debt and negotiate payments you can affordwith the landlord.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 11 of 13

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Information:selling leasedequipmentIt is a criminal offence to sell leased equipmentwithout the consent of the company.

Equipment leasesYou may have had an agreement with a company to lease equipment for your business. Check the agreement to seewhether you have the right to keep the equipment at the end of the lease. You may have to pay for the equipment untilthe lease runs out whether you return the equipment or not.

Check with the leasing company if the debt will be reduced ifyou return the equipment. If you no longer need the equipmentbecause you have ceased trading, you can treat this as a non­priority debt and negotiate payments you can afford with thecompany.

If you want to keep the equipment you have leased but cannotafford the payments, contact us for advice.

Accountants’ billsIf you have an accountant who usually deals with your tax returns, you may have a problem if you are not up to date withtheir bill. Sometimes accountants refuse to complete tax returns or give you back your books if they have not been paid.This can cause problems with HMRC if they have sent you an estimated tax bill that is too high.

If you cannot get your books back, try to give HMRC a summary of your trading figures from any papers you have.

Tell HMRC why you have no books. Ask them to accept your estimate even if you have no papers to prove yourfigures.

Try to negotiate with your accountant to give your books back. They may agree if they can see you are in no positionto make any sort of payment to them, or you may be able to make an agreement for a part payment instead.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 12 of 13

Page 13: )UHHSKRQH ZZZ QDWLRQDOGHEWOLQH RUJ …€¦ · ([wuddgylfh xsgdwh+05&,wlvlpsruwdqwwrwhoo+05& 1,&2 zkhq\rx vwrsshgehlqjvhoi hpsor\hg ,qirupdwlrq qrwsd\lqjfodvv frqwulexwlrqvrqwlph,wlvdfulplqdoriihqfhqrwwrkdyhsdlgfodvv

Information:self-help packOur self­help pack includes further information ontypes of debt. There is also guidance oncompleting a budget and negotiating withcreditors. Contact us for a copy.

10 ways to clear your debtIn the Debt topics area of our website, we havea section which sets out 10 ways to clear yourdebt. You can compare:

how big or small your debts must be to useeach of these options;

what type of debt you can repay using eachoption; and

how long each option might last before youare debt­free.

Useful contactsAdjudicator’s Office 8th FloorEuston Tower286 Euston RoadLondon NW1 3USPhone: 0300 057 1111 They are open:Monday to Friday 9:00am to 5pm www.adjudicatorsoffice.gov.uk

Business DebtlinePhone: 0800 197 6026 They are open:Monday to Friday 9:00am to 8:00pmwww.businessdebtline.org

TaxaidIf you need specialist advice on tax you can ring Taxaid.Phone: 0345 120 3779They are open:Monday to Friday 10:00 am to 12:00 noonwww.taxaid.org.uk

National Debtline endeavour to keep our fact sheets as up-to-date as possible, however, we cannot be held responsible for changesin legislation or for developments in case law since this edition of the fact sheet was issued.

National Debtline is part of the Money Advice Trust. Money Advice Trust Registered Charity Number 1099506. A company limited byguarantee. Registered in England and Wales (Number 4741583). Registered office 21 Garlick Hill, London, WC4V 2AU. © CopyrightNational Debtline 2001.

September 2016

Business debts England & Wales edition

Fact sheet no. 04 EW Business debts

My Money Steps is our free, independent and confidential online debt advice service. My Money Steps will help you workout a budget and give you a personalised action plan setting out practical steps to deal with your debts.

www.mymoneysteps.org

Freephone 0808 808 4000www.nationaldebtline.org Page 13 of 13