1. Overview
This document sets out Plymouth City Council’s approach in the relation to the recovery of unpaid council tax.
The relevant regulations covering the recovery of council tax are The Council Tax (administration and enforcement) Regulations 1992 (SI 1992/613 as amended).
2. In Scope
All customers with a liability for Council tax.
3. Key Principles
Plymouth City Council is committed to assisting all customers to pay their council tax bills. This includes maximising council tax support take up; providing accurate bills as soon as possible; and assisting people to make affordable payments arrangements if a liability order has been obtained. Customers can make a claim for council tax support.
The council’s approach to potentially vulnerable households is described in the ‘Welfare Support Framework’. We will take this into account when considering the most appropriate course of action in recovery.
However, where following these measures bills remain unpaid the council will use all available powers in order to pursue these debts, including summonsing to Court and collection through enforcement agents, charging orders against property, bankruptcy and in extreme cases even imprisonment.
This document provides full information on the different stages and actions that the city council may take.
4. Bills
Two types of bills are issued, these are annual bills despatched every March for the forthcoming financial year and amended bills which are issued as a result of changes to the Council Tax database or as a result of adjustments to Council Tax Support.
An annual bill is issued to each person shown in the Council Tax database as being the liable person(s). Amended bills are sent out overnight whenever there is a change in liability or Council Tax Support (CTS).
In March annual bills are sent out to all taxpayers, whatever the value, to inform them of their gross liability for the forthcoming year and to advise them of any CTS entitlement. Annual bills are sent for zero balances to taxpayers in receipt of 100% Council Tax Support and a number of credit bills are issued.
Amended Bills are issued in all cases where the change in liability results in a net liability in excess of £1.00 Where 100% CTS is awarded, a NIL bill is always issued to confirm CTS entitlement.
If, at the time the bill (annual or revised) is issued, the property is subject to a time-limited exemption, a note will be included on the bill indicating that a liability will exist from the end of the exemption.
Payment of Bills
A wide variety of payment schemes exist including weekly and monthly options as well as the statutory instalment scheme which provides for payment of the annual bill by 10 monthly payments.
Where the taxpayer does not express a preference, documents are issued for the statutory instalment scheme for payment to be made by cash starting in April.
The Council's preferred method of collection is direct debit. Customers are therefore encouraged to pay by direct debit wherever possible. Provided their bank/building society account remains in credit, customers will not normally incur any charges with their bank.
Customers adopting Direct Debit as a method of payment can opt for monthly or weekly payments and have a choice of payment dates in the month.
5. Action on non-payment
Where a taxpayer fails to make payment in accordance with the instalments shown on their most recent bill, recovery action is taken in accordance with the statutory procedures contained in the Local Government Finance Act 1992 and subsequent regulations.
On the first occasion of default in any financial year a reminder will be sent requesting that the taxpayer pays the unpaid instalment within 7 days and informing the taxpayer that if not paid the whole balance for the year will become due after a further 7 days.
If the taxpayer pays the missed instalment and pays subsequent instalments as they become due no further action will be taken.
Where a second default occurs a further reminder is issued (-worded differently).
If the taxpayer pays the missed instalment and makes all subsequent payments as they become due no further action will be taken.
If any further default occurs a Final Reminder Notice is issued requesting payment of the total amount remaining unpaid. Final Reminder Notices are also issued where there are no remaining instalment payment dates e.g. where the taxpayer fails to pay the final instalment of the year.
Where a taxpayer leaves a property the closing account shows one instalment date. If this bill is not paid a final reminder notice will be issued.
Payment of the outstanding amount detailed in the Final Reminder Notice will terminate any action.
Where the taxpayer fails to pay the amounts requested on a Reminder 1, Reminder 2 or Final Notice the account will progress automatically to summons stage.
The right to pay by instalments is only forfeited in the year of default and will automatically be reinstated for subsequent years.
Instalments should still be paid and recovery action will continue as necessary regardless of any outstanding CTS claim. Customers should be advised of this when making contact.
Summons
Where the amount on the reminder or final notice is not paid in full within the prescribed time, a summons for the outstanding balance will be issued.
The summons states the date when the Council will apply for a liability order. Where full payment of the Council Tax liability including costs is received, after the issue of a summons but before the date of the application for a liability order, all action will be terminated.
When a summons has been issued and the customer wishes to enter into an arrangement to pay by regular instalments which will clear the debt within a reasonable period of time, this will be agreed. However, the customer should be informed that the application for a liability order together with liability order costs will continue but that no further action will be taken if all payments are made as agreed.
Reasonable costs will be added to the account when a summons is issued, further costs will be added when a liability order is obtained. These costs will be reviewed on an annual basis.
Liability Orders
Once a liability order has been obtained the account is reviewed and the most appropriate enforcement action is taken. An Attachment to Earnings will be set up where the customer’s employment information is known and the rate of deduction will clear the debt within a reasonable time.
Customers can still agree a payment arrangement once a liability order has been awarded, however the agreement will need to clear the debt within a reasonable period of time. Customers will also need to provide their income details when agreeing an arrangement.
Consideration will be given to setting up an Attachment of Benefit for some customers. However, these will not be set up where the rate of deduction is less than the accruing council tax liability or where the deductions will not clear the debt in a reasonable time.
Customers can still agree a payment arrangement once a liability order has been awarded, however the agreement will need to clear the debt within a reasonable period of time. Customers will also need to provide their income details when agreeing an arrangement.
Consideration will be given to setting up an Attachment of Benefit for some customers. However, these will not be set up where the rate of deduction is less than the accruing council tax liability or where the deductions will not clear the debt in a reasonable time.
Enforcement Agents
Where an Attachment to Earnings or benefit is not appropriate or the customer has not contacted the council to make a payment arrangement then the debt will be referred to an enforcement agent company for collection.
The enforcement agent company will follow the procedures laid down in the contract between them and the council. The company will also follow the Taking Control of Goods Regulation 2013.
Further enforcement Action
Where the debts are returned from the enforcement agents or where enforcement agent action is not considered appropriate, consideration will be given to taking further enforcement action, this will include obtaining a charging order against the customers property, enforcing the sale of that property, applying for the customers bankruptcy, or applying for a customer’s committal to prison. Instigating Bankruptcy Proceedings against a Debtor
Where the total debt is £5,000 or more, the Council can take action to have the debtor declared bankrupt (or in the case of a company take winding up proceedings).
Debts to be referred for bankruptcy are those where we have a liability order and it is felt that the customer has sufficient assets to clear their debt.
The costs of applying for a bankruptcy petition and the consequences for the customer are substantial and approval will first be obtained from a Service Manager.
Charging Orders and Enforced Sale
Where the owner of a property has been determined to be liable for Council Tax, bills will be sent and recovery action taken in the normal way if he/she fails to pay.
If other enforcement methods are not successful (Attachment to Earnings/ Benefit or the use of enforcement agents) and the balance on the liability order(s) exceeds £1,000, then the Council can apply for a charging order against the person’s property
The Council’s legal services team will undertake the work and apply to The County Court for the charging order.
Further costs will be incurred when a charging order is obtained and interest may be charged on the outstanding debt.
Once a charging order is obtained and no payment is forthcoming, the council may apply to The County Court for an order of sale to sell the property and recover its money.
An order for sale will only be pursued once all the facts have been considered and approval has been obtained from a Service Manager.
Committal to Prison
In cases where the Enforcement Agent has been unsuccessful in obtaining payment and has provided a 'Nulla Bona' certificate the Council can apply to the Magistrates Court for the debtor to be committed to prison for non-payment.
The standard procedure is for the debtor to be summonsed to Magistrates' Court. Where the debtor fails to appear a warrant of arrest will be applied for.
The costs of applying for a customer’s committal to prison and the consequences for the customer are substantial and approval will first be obtained from a Service Manager. Committal action is not taken in cases where the current address of the debtor is not known (i.e. no trace cases).
When a debtor attends a Court hearing Recovery staff will interview him/her before the hearing to obtain full details of the financial circumstances. If information becomes available that the debtor is working or on Income Support/JSA and it would be more beneficial to set up an Attachment of Earnings or Benefit, committal proceedings will be withdrawn and an attachment set up.
The debtor will be brought before the Magistrates who will conduct a Means Enquiry and consider whether the debtor has been guilty of either "wilful refusal" or "culpable neglect". If the Magistrates decide that the taxpayer is guilty of either of the offences they can impose a prison sentence of up to 3 months.
The sentence may be postponed to allow payment at a rate determined by the Magistrates. The rate of payment will be set as a result of the information supplied during the Means Enquiry.
Additional costs are incurred if it becomes necessary to start committal proceedings, which the debtor will be liable for.
Magistrates have the power to remit all or part of the debt after conducting the Means Enquiry. If a person is actually committed to prison for non-payment of Council Tax, he/she can be released before their sentence is served in full if they pay the debt outstanding. The amount to be paid will be apportioned according to the period of sentence already served.
6. Vulnerable Households
We will consider each case individually where potential vulnerability is identified and if we do believe that vulnerability exists, we will take the following steps:
6.1 We will maintain an up to date record of our customer identified as being vulnerable.
6.2 We will review the personal circumstances of each customer before passing a debt to the Council’s enforcement agents for collection.
6.3 Prior to taking bankruptcy action against a customer we will take pro-active action to contact the customer to identify whether they may be vulnerable.
6.4 We will monitor our complaints procedure to identify any trends.
6.5 Our enforcement agents will be obliged to advise the Council of any customers they identify as possibly vulnerable.
6.6 The Council’s contract with our enforcement agents will insist that they maintain a vulnerable persons and safe guarding children policy.
6.7 Where a vulnerable customer is identified, if necessary, we will visit the customer in their home to discuss their debts.
6.8 Where appropriate, we will use an interpretation service for customers whose first language is not English, including British Sign Language.
6.9 We will maintain a complaints procedure for customers unhappy with the conduct of enforcement agents.
6.10 We will monitor our enforcement agents and meet regularly with them to review their practices.
6.11 We will regularly meet with advice agencies in order to discuss practical ways to assist vulnerable customers.
6.12 We will work with advice agencies to agree repayment schedules that are affordable and recognise a customer’s priority debts.
6.13 We will publicise debt advice contact details with our literature.
6.14 We will consider a customer’s total indebtedness to the Council when considering repayment arrangements
6.15 We will work with other areas of the council to identify possible vulnerable customers and develop a joint strategy for repayment of any debts.
6.16 We will promote how council tax bills can be reduced through council tax support, exemptions and other discounts in our literature and on our website.
6.17 Where allowed in law we will share data regarding vulnerable customers with other interested parties.
6.18 We will encourage customers to contact us if they are experiencing financial hardship
6.19 We may ask customers experiencing financial hardship to complete personal budget sheets to enable us to agree fully informed repayment schedules that are affordable to the customer and in the best interest of the Council.
6.20 If we do not accept a repayment arrangement we will fully explain why.
7. Contacts
General information
Telephone: 01752 668000