DEPARTMENT OF THE ENVIRONMENT,
TRANSPORT AND THE REGIONS
CHANGES TO THE ENFORCEMENT AND
LEVYING OF DISTRESS FOR NON-DOMESTIC
A CONSULTATION PAPER
This consultation paper seeks views on proposals to improve the way in which non-domestic rate arrears and
levying of distress - removal of a debtor's goods to discharge the debt - is conducted in England and Wales.
Some of the proposed changes can be made by secondary legislation and, subject to the outcome of this
consultation, we intend to introduce these with effect from 1 October 1998. Other proposals will require primary
legislation for which there is no provision currently.
The Department may wish to publish responses to this consultation exercise in due course or deposit them in the
Department's library. If so, all responses received will be published or deposited, unless a respondent specifically
asks the Department to treat their response as confidential. Confidential responses will, nevertheless be included
in any statistical summary of numbers of comments received and views expressed.
Comments on the proposed changes to the non-domestic rating enforcement and collection regulations
should be sent to Mr Geoff Salvatore, Non-Domestic Rates Branch, Zone 5/J1, Eland House, Bressenden
Place, London SW1E 5DU by Monday 3rd August 1998. Two copies of responses should be provided,
unless the response is to be treated in confidence.
The systems of recovery and enforcement of both non-domestic rates and council tax have remained relatively
unchanged since their introduction in 1990 and 1993 respectively.
There has been public concern about the way in which some enforcement options were being applied, in
particular the levying of distress on council tax, and because of the alleged behaviour of some bailiffs. The
Department, therefore, published on 15 September 1997 three consultation documents on proposed changes to
the enforcement and administration of the council tax. On 19 December 1997 the Department issued a circular
letter setting out the changes which it intended to introduce.
Many respondents to this consultation exercise expressed the view that similar changes should be made to the
non-domestic rating regime. We have considered the views put forward and concluded that, where it is
appropriate to do so, the non-domestic collection and enforcement regulations should be brought into line with
those for the council tax.
This paper sets out the changes we considered appropriate and seeks views on them.
The current legislative position
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) (Local Lists) Regulations 1989 (Statutory Instrument
1989/1058 - as amended). Where instalments are unpaid and reminder notices are not complied with, the full
amount of the outstanding rate liability for the year falls due for payment. The billing authority can seek a
liability order through the magistrates court to recover the outstanding sum, plus costs.
When a liability order has been issued by the court, the billing authority can seek to recover the debt by:
i) levying distress; or
ii) seeking a winding up order in the case of a company, or initiating bankruptcy
proceedings in the case of an individual.
Where a billing authority has tried to levy distress, but has found no (or insufficient) goods on which to levy an
amount by distress, it can apply to the magistrates court for a warrant to commit the debtor to prison. This will
only be granted if the Court is satisfied the failure to pay is due to a person's wilful refusal or culpable neglect.
In this consultation paper we are proposing to amend:
a) the operation leading to issuing a liability order;
b) the operation of committal proceedings and recovery of costs; and
c) the way in which distress is levied (including fees).
A summons is issued to a ratepayer of an application for a liability order against him/her and the date of the
court hearing. The costs of the application (including the issue of the summons) are payable by the ratepayer
The purpose of the summons is to provide an opportunity for the ratepayer to attend court and contest the
application if he/she so wishes. However, there have been many complaints that summonses provide very short
notice of the hearing at which the application will be considered.
It is important that the system operates as fairly as possible and to do so the ratepayer must receive adequate
notice of the hearing to enable him/her to attend court and to seek professional advice beforehand if he requires
We propose to amend the regulations to require summonses to be served at least 14 days before the court
hearing thus ensuring debtors are given adequate notice to enable them to attend court if they wish and to
seek advice as necessary.
The liability order
There are some defences against the making of a liability order - these include the fact that an amount has not
been properly demanded or that the amount has been paid. But unless a defence is accepted by the court the
order will be granted.
However, it can emerge after the order has been made that a mistake has occurred, perhaps because a ratepayer
has later been able to find receipts proving payment. Although no action will be taken on a liability order in
these circumstances, the ratepayer will understandably wish it to deleted from the record. At present requires an
application to a higher court and this means that authorities incur considerable cost. This seems unnecessary
where there is no dispute about the facts.
We therefore propose, as soon as an opportunity arises to amend primary legislation, to introduce a power
which will enable local authorities to request a magistrates' court to overturn a liability order previously
made by the court.
Commitment to prison
Where a billing authority has failed in its attempts to recover unpaid sums, provided that it has tried
unsuccessfully to levy distress, it may apply to the magistrates' court for a warrant committing the debtor to
prison. The purpose of this option is to enforce payment rather than to punish an individual, and in most cases is
effective in eliciting payment before a person is actually committed to prison.
Where the debtor pays the outstanding rates liability and the costs relating to the issuing of the liability order
before the warrant of committal is issued, then the billing authority can take no further action against the debtor.
This means that the authority cannot recoup the costs incurred in obtaining the warrant. It is plainly unfair that an
authority should bear the cost of part of the enforcement action to secure payment of the rate debt where the
ratepayer has wilfully withheld payment until the last possible moment.
We propose to amend the regulations to enable the authority to recover the cost of securing a warrant for
committal in cases where the debtor discharges their rates debt before the warrant is served.
Magistrates have no power to recall those who have appeared before them in committal proceedings. This can
give rise to difficulties and may lead to their decisions being subject to legal challenge. For example, where new
evidence comes to light, or where new advice is issued to the courts following a judgement in the appeal court,
but this was not made available at the time of the original hearing. The logical course in these circumstances
would be to recall the debtor and reconsider whether the court's original decision should be reviewed.
We propose to introduce a power for magistrates to recall those who have appeared before them in committal
proceedings as soon as an opportunity arises to amend primary legislation.
LEVYING OF DISTRESS
Regulation of bailiffs
The current legislation governing the accreditation of those levying distress on behalf of billing authorities is
minimal. Regulation 14 of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations
1989 only specifies that the person levying distress must carry written authorisation from the billing authority
and show this to the debtor if requested.
There is no requirement that a person should be certificated before they can operate as a bailiff and the bailiff
industry is largely self-regulating. However, there is a system of certification through the county courts whereby
an applicant for a certificate must satisfy the judge or registrar that he is a fit and proper person to hold a
certificate, and that he has a sufficient knowledge of the law of distress. The Law of Distress Amendment Act
1888 requires that all bailiffs levying distress for rent have a certificate.
A requirement to use certificated bailiffs in the pursuit of rate debts would help ensure that such debts are
pursued by individuals who could be expected to have a reasonable understanding of the laws governing distress,
if not necessarily the recovery of local taxes. Moreover, a certificated bailiff may have his certification cancelled
by the county court which originally certificated him if the court is satisfied that the bailiff has acted improperly.
The use of certificated bailiffs would therefore provide an additional route of recourse for local taxpayers
aggrieved by the actions of bailiffs.
We propose to amend the regulations to require that only certificated bailiffs may levy distress in respect of
rate debts - this will apply equally to officers employed directly by the billing authority and private bailiffs.
Provision of information to the debtor
At present, the only information about the levy of distress which must be provided to the debtor must be given
when distress is actually levied. There is no requirement to notify the debtor in advance of the proposed levy, nor
when a levy is attempted but is unsuccessful.
Few debtors attend court when a liability order is made. By this time the debtor should have received a reminder
letter about the arrears and a summons in respect of the liability order. But many debtors claim that the first they
know of the debt is when the bailiff arrives at their door. At this stage the debtor is unlikely to be aware of his
rights or the powers of the bailiff. This can lead to accusations, justified or otherwise, from frightened debtors,
of having been intimidated by a process they did not understand. Furthermore, the information the debtor does
receive at this stage does not explain in full the role and powers of the bailiff and is not in language that can be
We propose that the regulations should be amended so that no less than 14 days prior to the first attempt to
levy distress, the billing authority must send to the debtor a letter informing him/her:
i) that a liability order has been made against him/her and setting out the amount in
respect of which the liability order has been made, and if different, the amount which
ii) that unless the debt is paid before the end of the 14 day period the case may be passed to
a bailiff, and further costs may be incurred by the debtor in accordance with the schedule
of fees which should be enclosed; and
iii) of the address and telephone number of the team or section at the billing authority who
should be contacted if the debtor has a query.
However, concern has been expressed that business debtors will take advantage of any advance notice of the
levying of distress and remove all goods of any worth from their premises. The Department would
particularly like to receive comments on whether or not this fear has any foundation.
We also propose, as soon as an opportunity arises to amend primary legislation, to make provision for
statutory provision for information to be given to debtors about the courses of action available if they are
aggrieved by the actions of a bailiff, (the first option of which must be to refer the matter to the billing
authority), This information will include the address and telephone number of the team or branch at the
authority to whom the debtor should put his grievance.
Where an unsuccessful attempt at levy is made the debtor may be unaware of the visit and unaware that further
costs have been added to their arrears.
We therefore propose, as soon as an opportunity arises to amend primary legislation, to make statutory
provision that where a visit is made with the intention of levying distress but no such levy is made, the bailiff
should leave at the debtor's premises notification to the debtor that an unsuccessful attempt to levy distress in
respect of rate debt has been made. The notification would include:
i) the address and telephone number of the appropriate team or branch at the billing
authority if the debtor has any queries;
ii) the name of the bailiff who attended;
iii) the date and time of the visit;
iv) the amount of the debt in respect of which the levy was attempted, including fees added
as a result of the unsuccessful attempt;
v) where the levy was attempted by a private sector bailiff and not an employee of the
billing authority, the name, address and telephone number of the bailiff's firm; and
vi) the courses of action available to the debtor if they are aggrieved by the actions of the
bailiff, the first option of which must be to refer the matter to the billing authority. This will
include information on how to appeal in the Magistrates Courts against either the action of the
billing authority or the bailiff.
In addition we propose to make provision for information to be given where a levy has been made. This
would require the person carrying out the levy to leave a further copy of the warning letter, to which will be
added the name of the bailiff who levied the distress, a revised memorandum setting out the amount owed by
the debtor, a copy of any close or walking possession agreement entered into and information on the appeal
Review of Fees
Fees payable in respect of the levy of distress are designed to cover the costs incurred by the billing authority in
making the levy. These were last reviewed in 1993.
We now propose to amend the regulations as follows:
i) the current fees for attending to levy distress where no levy is made will be increased to £20
for a first or only such visit (up from £15.00) and to £15 for a second visit (up from
ii) the charge for levying distress will be the lesser of the actual fees incurred or £20 (up from
£15) - the current sliding scale for fees for debts over £100 is being retained;
iii) the current fee for close possession - where the bailiff, instead of removing the debtor's goods,
agrees to stay with the goods until the debt has been paid - will be increased to £12.50 per
day (up from £10);
iv) the introduction of a flat rate fee of £10 for walking possession - where the bailiff, instead
of removing the goods agrees a schedule of payments with the debtor;
v) the introduction of a requirement that, where a debtor asks for the value of an item to be
assessed before sale, the debtor should be advised of the cost of the assessment and the
manner of its calculation before the assessment takes place; and
vi) the introduction of a fee of £20, or actual costs incurred up to a maximum of 5% of the
amount of the liability order, whichever is the greater, for advertising costs where a sale does
not take place because the debt has been paid and the goods have been returned to the debtor.
Proposals which will be subject to further consultation
At present there is no provision to enable billing authorities to recover the cost of being presented with a cheque
which is returned unhonoured by a bank. We propose to give authorities the power to charge a fee should a
cheque be so returned.
We also propose to introduce a statutory requirement on billing authorities to set fee maxima, at the start of the
rate year, for fees charged by bailiffs where they attend with a vehicle and where they remove goods . We also
intend to require that the debtor be informed of the daily cost for storage of goods and to receive an itemised
breakdown of other costs incurred.
These proposals will be subject to separate consultation.
Changes to the enforcement of the council tax not to be
extended to non-domestic rates
As part of the proposed changes to the enforcement of council tax the Department intends to:
a. amend and uprate the income bands for use in Attachment of Earnings Orders in line with wage
inflation since 1989;
b. restrict to two the number of Attachment of Earnings Orders that a single billing authority can
action against a debtor subject to multiple AEO's; and
c. give the power to authorities to recover distress costs through Attachment of Earnings Orders.
We have considered whether it would be desirable for Attachment of Earnings Orders and Community Services
Orders to be made available to the courts in cases of rate debt, but have decided that they would not be
appropriate. Such orders would not add significantly to the existing deterrent power of committal. Also they
would still not address the problem of the company or corporate debtor against whom such orders could not be
Another council tax change not being extending to non-domestic rates is the aggregation of liability orders for
the purpose of meeting the £1,000 limit on charging orders. Charging orders are not available to the courts in
cases of rate debt.
Non-Domestic Rates Branch
5 June 1998