A retailer who requested anonymity (let’s call him Gary) rang to warn others that back in March his store in the West Country had a call from business rates company telling him that, for £5.99, they would look at the possibility of getting his rates reduced.
They reckoned he had a good case. They wrote to him: “Your property was identified whilst we were working for another client in the area, and I think that it has merit in terms of securing you a substantial reduction for this rating period and credit onto your account for any over-payments you made from April 2017 – March 2023.” It went on to say that they saw businesses on a daily basis claiming back money they are owed and using it to strengthen their business and asking ‘Why should you miss out?’
Then they subsequently wrote: “We write to update you that the VOA have acknowledged the 1st stage of the process ‘Check’ and a copy of this acknowledgement is attached. The Valuation Office allocates a 12-week period to deal with these cases, but may come back to us sooner.” (The Check acknowledgement pointed out that the rateable value of the property was £40,000 with effect from 1 April 2023 and added that “the information submitted as part of the Check case may cause the valuation to go up as well as down”.)
It also said that updates would be forthcoming and that “in the event a reduction is not achieved at this initial check stage we will then be able to proceed with the 2nd stage – Challenge”.
After he paid the £5.99 he said that the company then helped itself to £1,074.01 from his bank account. He managed to do a charge back and got his money back. Then it all went pear-shaped.
The managing director of the company wrote to Gary in part: “If you look over our invoices and other correspondence you will read that if we are unable to reduce your rate liability with the local authority, we will refund all monies paid to us so there is no risk to you in terms of fees.
“Remember what I explained, because you have registered a charge back, we will have to defend it, meaning this money will be tied up for months and months whilst it is in dispute which seems unnecessary when we are offering a refund guarantee to mitigate your risk.
“Please get back to me asap with how you want to play this situation out, and remember there is no ill will our end and will continue carrying out the work as these muddles can happen.”
Gary did not respond to this and the company took him to court. “They sent me a judgement for claimant in default claim for £1,318.01.”
Again he did not respond and then the bailiffs showed up. They presented him with a bill which included interest of £5.22, a compliance stage fee of £75, an enforcement stage fee of £719 equalling to a total sum outstanding of £2,246.98. Quite an increase on that initial £5.99.
The bailiffs said that if Gary didn’t pay up, they would take goods to the value of. He paid.
He contacted Action Fraud which he says “did nothing” and he approached NFRN’s legal team. He labelled them “useless”.
And, of course, he did not get a reduction on his business rates.
I contacted the rates company and they responded with a line-by-line rebuttal of the retailer’s complaints.
It turned out that the company had acted by the book and had the weight of the law behind it.
So, for any retailers in dispute with a supplier or who have entered into a contract which they wish to get out of, here are some pointers.
DO: contact the other party to discuss the matter.
It is unlikely that the company you are in dispute with wants to go legal and will, if at all possible wish to compromise even if it means taking back goods that it has supplied. But expect a fee for this if the goods are not faulty. If they are that is a whole different discussion.
A contract may be more difficult but, again, if the other company is legitimate it won’t want to go legal. It won’t want to carry out work that you actually don’t want but will probably require a termination fee. Don’t hold you breath in pleading an ‘unfair contract’. Your responsibility is to spot that before you sign. It won’t work to claim that you were pressurised into signing. That’s the rep’s job. Yours is to be cautious, even cynical. Don’t be fooled by ‘offers’: ‘Sign now and you’ll get a reduction’. If you sign tomorrow or next week you can negotiate the reduction with the threat not to sign if you don’t get the reduction.
However, if things go bad there are things you must do.
The first do is a don’t: DON’T ignore any correspondence.
If you receive a letter threatening court action reply saying that you will ‘vigorously’ defend any such action. (The wording is important. It leaves the other party in no doubt it will have a fight on its hand.) At this stage don’t make any offers, don’t try to compromise.
Above all don’t feel intimidated. Intimidating you is their tactic.
If you receive a ‘claim’ from the court, again DON’T ignore it; it won’t go away.
You will have two weeks to respond. Remember the court is neutral. It has nothing to gain by your being prosecuted and this is a civil not criminal matter. You, and the company you are in dispute with, are equals.
In responding you have two options:
1/. Admit the claim and pay up. (Including the costs that will have been added to the claim. Ignore these and the court will be after you.)
2/. Dispute the claim but make sure that you have good grounds. “I decided not to go ahead” isn’t a reason. Nor is “Unfair contract” unless you have legal opinion that you can present and, probably, legal representation.
The other thing you can do at this stage is to make a counterclaim. But it had better be good. You will need to prove a loss caused by the other party.
If you don’t respond to the court claim you will automatically receive a judgement against you: a CCJ. This is bad. Your bank won’t like it, your suppliers won’t like it. No one will want to give you credit. It can make doing business very difficult.
But here again don’t ignore it. You will have to pay up. Only in very particular circumstances can you have the judgement ‘set aside’ – the jargon for cancelling it. And at this stage you will be best advised to get your solicitor involved. If it is a small sum it is probably not worth arguing. You may feel unjustly dealt with but chalk it up to experience and pay up.
Otherwise you may find a bailiff coming into your premises and taking away your goods. There was once a video in circulation a few years ago, of bailiffs removing a refrigerator from a store. Great fun to watch for quite a lot of people. Less so for the shopkeeper.
So: If you get into a dispute do not ignore it or any correspondence related to it.
Do take advice, seek help understanding documents and letters especially if English is not your first language. This especially applies to letters from the company you are in dispute with; courts should be able to provide translations.
There are differences between sole traders and limited companies. As a sole trader you are liable as an individual, which means the bailiffs could come after your telly. If you are limited company the company has a life of its own so your business assets – see the story about the fridge above – are at risk.
If you have a CCJ and have not paid it this will go on your credit record – business or personal – and either way you will have problems getting finance.
One final point, don’t do what Gary did. His problems all started because he claimed back the payment he made on a credit card. Equally if you have set up a direct debit don’t just cancel it without talking to the company you are in dispute with. Either way you could end up like Gary with a big bill you could have avoided and, worse case scenario, you could trash your credit rating at the same time.
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