Business Rates Arrears: How to Negotiate an Affordable Payment Plan

Direct answer: If your business has fallen behind with business rates, contact the council immediately and propose a payment plan that covers the current year while reducing the arrears at an affordable rate. Councils are not required to accept every proposal, but a clear budget, evidence of affordability and an early approach can improve your prospects.

Can business rates arrears be paid by instalments?

Often, yes. The billing authority may agree a revised instalment arrangement or a separate plan for historic debt. The outcome depends on the council, the stage of recovery, your payment history and whether the proposed instalments are realistic.

Do not ignore a reminder, final notice, summons or enforcement letter. Recovery costs can increase and the council may obtain a liability order. If enforcement agents are already involved, the correct contact and options may be different.

What to do now

1. Check the bill. Confirm the property, rateable value, liability dates, reliefs and payments already credited.

2. Protect current payments. If possible, keep the current year's instalments up to date. This demonstrates that the arrears are not continuing to grow.

3. Prepare an affordable offer. Use a short cash-flow forecast and propose dates and amounts the business can maintain.

4. Contact the correct recovery team. Explain the cause of the arrears, the steps taken to stabilise the business and the proposed arrangement.

5. Get the agreement in writing. Confirm the instalment dates, treatment of costs and what happens if circumstances change.

Evidence checklist

• The latest business rates bill and account reference

• Any reminder, final notice, summons, liability order or enforcement notice

• A list of payments already made

• Recent bank statements and a short cash-flow forecast

• Management accounts or other evidence of current trading

• Details of other essential liabilities, including rent, wages, tax and utilities

• Evidence supporting any billing error, relief entitlement or occupation-date dispute

• A written proposal showing the amount and date of each payment

Practical example

A trading business owes £12,000 from the previous rating year and has a current monthly liability of £2,000. Offering £500 a month without addressing the current bill is unlikely to solve the problem because the total debt will keep increasing. A stronger proposal would show how the business will maintain the £2,000 current instalment and make an additional affordable payment towards the £12,000 arrears, supported by a cash-flow forecast.

If the figures show that this is impossible, the business should seek professional debt and insolvency advice promptly rather than promise instalments it cannot maintain.

Check whether the bill itself is correct

A payment plan deals with collection; it does not correct the underlying assessment. Check whether the property details, occupation dates and reliefs are accurate. If the rateable value may be wrong, the Valuation Office Agency's Check, Challenge, Appeal process is separate from the council's recovery action. An outstanding challenge does not normally mean collection automatically stops.

If enforcement agents are involved

Ask for a current breakdown of the balance, including compliance and enforcement fees, and keep a written record of every contact and payment. Do not conceal or dispose of controlled goods. If the business is vulnerable, the debt is disputed or the proposed payments are unaffordable, obtain advice quickly.

Common mistakes to avoid

• Waiting until the day of an enforcement visit

• Offering an amount without supporting figures

• Agreeing instalments the business cannot sustain

• Stopping current-year payments while negotiating older arrears

• Assuming a VOA challenge automatically pauses council recovery

• Relying only on telephone conversations without written confirmation

Official guidance

• GOV.UK: Introduction to business rates

• GOV.UK: Business rates relief

• GOV.UK: Check whether your rateable value is correct

Get case-specific help

If you have received a reminder, summons, liability order or enforcement notice, our Business Rates Debt Advice service can review the account, identify billing or relief issues and help you prepare a realistic proposal.

Call to action: Contact Business Rate Advisors Ltd with the latest bill, recovery notice and the amount you can afford each month. The earlier we see the documents, the more options may remain available.

Author: Steve Adams, Business Rate Advisors LtdReviewed by: Business Rate Advisors LtdLast updated: 17 August 2026

This article provides general information for businesses in England and is not legal or insolvency advice. Procedures and available arrangements vary by council and individual circumstances.