Q&As

A lease of a shop premises expires in 2018. Since 2009 the tenant has failed to pay business rates and has left the country. There are therefore substantial business rates arrears. The landlord has not forfeited the lease and has claimed rent arrears for the guarantor. However, the guarantor may not be in a financial position to also meet the business rates arrears. If the landlord takes possession of the premises, will they be liable to pay the business rates arrears going back to 2009 or will they only be liable for future business rates?

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Last updated on 22/02/2018

The following Local Government Q&A provides comprehensive and up to date legal information covering:

  • A lease of a shop premises expires in 2018. Since 2009 the tenant has failed to pay business rates and has left the country. There are therefore substantial business rates arrears. The landlord has not forfeited the lease and has claimed rent arrears for the guarantor. However, the guarantor may not be in a financial position to also meet the business rates arrears. If the landlord takes possession of the premises, will they be liable to pay the business rates arrears going back to 2009 or will they only be liable for future business rates?

A lease of a shop premises expires in 2018. Since 2009 the tenant has failed to pay business rates and has left the country. There are therefore substantial business rates arrears. The landlord has not forfeited the lease and has claimed rent arrears for the guarantor. However, the guarantor may not be in a financial position to also meet the business rates arrears. If the landlord takes possession of the premises, will they be liable to pay the business rates arrears going back to 2009 or will they only be liable for future business rates?

In answering this Q&A, we have referred to Practice Note: Liability for business rates.

The starting point is that the occupier of the premises is liable for business rates under section 43 of the Local Government Finance Act 1988 (LGFA 1988). This means that the tenant is liable for the period for which they are in ‘actual possession’. See Commentary: Necessary ingredients of rateable occupation: Halsbury's Laws of England [61].

Assuming that the tenant went out of occupation in 2009, the property then became an unoccupied hereditament and any rates liability will since then have been governed by

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