Liability for non-domestic property rates

News - 27/01/2014

The High Court has recently held that a company’s annual liability for non-domestic property rates was provable in full in a company voluntary arrangement (CVA) that was approved after the start of the year for which rates were due.

The relevant local authority had argued that, as the CVA company was entitled to pay the annual sum by instalments, only the instalments that had fallen due and were unpaid at the date of the CVA were provable.

The Court held that the entire annual liability for business rates  was a contingent debt, and that such contingent liabilities were subject to the terms of the particular CVA.

This decision is beneficial to debtors that seek to compromise their full business rates liability in a CVA. However, it seems likely that local authorities will seek to argue that it should be limited to its facts, despite the judge’s view that it has a potentially wide application.

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For further information please contact Lily Meyer on 020 8614 4590 or email [email protected]

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Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.

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