Unpaid business rates

Emsa77

HelloMy husband has been in talks with a local owner to buy his business but he let slip he hasn't paid any business rates in over 20 years.Do you think that if we went ahead with the purchase we would be responsible for the unpaid rates? If we are it will obviously affect our decision.
Hope someone can help x

fc123

Maybe it is because the property is under a certain rateable value and it is his only premises.


We pay zero business rates on our premises as the rateable value is under £12,000. See link here

How much is the rent and what is the rateable value?

I have known owners of freeholds to pay negligible business rates based on rateable value and the neighbours pay a huge amount as the value has been set far higher.

Emsa77

Thanks for the quick reply. The current rent is £5000 per year - not sure on the rateable value though. It is a run down old farm building so perhaps that makes a difference.

fc123

The rateable value should be roughly what the rent is....so is probably under £5000.
They would then apply the multiplier (approx. X 0.48) and you would be charged about £2,500 pa but then apply for small business rate relief. Bit of a faff about but once it's done, it rolls over each year so very straightforward.

I think you can find out what it is by asking to see his Business rates bill as he will have had one every year.

If he hasn't had one, then it is not registered for BR....and that is a whole new set of issues that I know nothing about

Pennywise

Putting aside the question as to whether business rates were due for the past years, what, exactly are you proposing to buy?

If they're trading as a limited company, and the proposal is to buy the limited company, then yes, you buy it "warts and all" - all previous liabilities remain with the company.

But if it's a sole trader or partnership business, then it's liabilities stay with the previous owners and don't transfer to you.

If it's a limited company, and you just buy the assets, stock, goodwill from it, then again, it's prior liabilities stay with it and you don't inherit them.

All the above can be varied by the business sale agreement but that should be a professionally produced document drawn up by a solicitor, and should be properly negotiated between the parties so it's clear who ends up with any unknown/prior liabilities.

lincroft1710

I bet as it's a rundown farm building, it's either been overlooked or not picked up by the council. Check the property on the VOA business rates page

http://www.2010.voa.gov.uk/rli/en/basic/find

Savvy_Sue

Pennywise wrote: »

All the above can be varied by the business sale agreement but that should be a professionally produced document drawn up by a solicitor, and should be properly negotiated between the parties so it's clear who ends up with any unknown/prior liabilities.

Can I just emphasise what Pennywise has said, please don't say you can't afford to take professional advice because you cannot afford NOT to!