The Act Part 2 – Administration and enforcement of non-domestic rates Section 21 – Failure to pay instalments
102.Section 21 makes changes to the way in which local authorities can recover unpaid non-domestic rates.
103.Section 8(1) and (2) of the 1975 Act provides for non-domestic rates to be payable in ten monthly instalments, beginning in May and ending in February. This does not apply where the ratepayer agrees with the local authority to a different payment schedule (see section 8(7) of the 1975 Act). Prior to commencement of section 21, section 8(8) and (9) of the 1975 Act made provision for enforcement where rates are to be paid in monthly instalments in accordance with section 8(1). The position was that, if the ratepayer was in arrears by two or more instalments on or after 30 September, the balance of the rates became payable in full.
104.This meant that local authorities were unable to take steps to recover unpaid instalments before the end of September. To enable local authorities to initiate debt recovery at an earlier stage (bringing the process for recovery of unpaid non-domestic rates into line with the process for recovery of unpaid council tax), section 21 of the Act repeals section 8(8) and (9) of the 1975 Act and replaces them with a new section 8A.
105.Section 8A applies where rates are payable in instalments in accordance with section 8(1) and (2), and the ratepayer has missed an instalment. Section 8A(2) requires the local authority to send the ratepayer a reminder notice after the first missed instalment. The ratepayer has seven days in which to pay the missed instalment, and any further instalment which is due to be paid during that seven day period (section 8A(3)). If the ratepayer fails to pay the missed instalment (and any other instalment due as mentioned above), the total amount of unpaid rates for the year becomes payable at the end of the next seven-day period (section 8A(4)).
106.If a ratepayer misses an instalment, and has already been given two reminder notices in the year, section 8A(5) provides that the total amount of unpaid rates for the year becomes payable on the day following the day on which the missed instalment was due to be paid.
107.Paragraph (b) of section 21(3) of the Act repeals section 8(8) and (9) of the 1975 Act, whilst paragraph (a) makes a consequential adjustment to section 8(1) of that Act.
108.Section 21(4) of the Act amends section 247 of the Local Government (Scotland) Act 1947 in consequence of new section 8A. Section 247(1) provides that unpaid non-domestic rates are recoverable by diligence authorised by summary warrant or in pursuance of a decree granted in an action for payment. Section 247(2) makes provision about what a certificate accompanying an application to the sheriff for a summary warrant must say.
109.Section 21(4) amends section 247(2) so that, where reminder notices have been issued under section 8A, the certificate must state that the local authority has served a reminder notice on the ratepayer under section 8A(2), that the total amount of unpaid rates for the year has become payable under section 8A(4)(b) or (5)(c) and that a period of 14 days has passed since that amount became payable without the whole amount having been paid. This means that, when rates become payable in full, the ratepayer has a further period of 14 days within which to pay them before the local authority can apply for a summary warrant for their recovery.
110.Where section 8A does not apply to late payment of rates (because they were not payable in instalments under section 8(1)), the requirements of section 247(2) are unaltered.