Council Tax Payment Problems
Service of the Summons
The council tax regulations
contain detailed arrangement for recovery and enforcement
including:
If an amount for which a reminder notice
or final notice has been served remains unpaid, the billing
authority may make a complaint to a justice of the peace made
within six years of an amount becoming due. The complaint will
result in a summons
being issued to the liable person by the Court to appear at a
hearing. The cost
of the application and summons will be charged to the liable
person.
The
Summons
A Justices' Clerk is authorised to
consider a complaint and issue a summons. The signing of the
summons by facsimile or rubber stamp was confirmed by the High
Court and although billing authorities print the summonses for the
Justices, it is the Justices who issue the summons, not the billing
authority. A summons must be served at least 14 days before the hearing
and the summons must state the time and date of the hearing. The
Local Government Act 1992 does not specify the form of a summons
and it is generally accepted that the standard form for civil
procedures is adequate.
Service of the
summons
A summons may be served on a
person by:
- Hand delivering it to him
- Leaving it at his usual or last known place of abode, or in the
case of a company, at its registered office
- Sending it by post to him at his usual or last known place of
abode, or in the case of a company, to its registered office,
or
- Leaving it at, or by sending it by post to him at, an address
given by the person as an address at which service of notices will
be accepted
If the council tax and costs are
paid before the hearing date then the hearing need not proceed. If
a person fails to attend the hearing the certificate of posting can
be entered into evidence as service of the summons. The billing
authority is required to submit evidence of the proof of
liability and the liable person may submit evidence in defence against the issue of a liability order.
Regulations state that appeals regarding liability may not be
raised in enforcement proceedings (they are subject to the council
tax appeals
processes) and provide for computerised records to be admissible as
evidence.
Proof of liability
The authorised person attending
for the billing authority will give evidence on oath that:
- The council tax has been made and published
- An entry for the dwelling appears in the valuation list
- A demand note has been issued
- A reminder notice or final notice has been issued
- The amount became due less than six years ago
- A summons has been served
- The sum claimed, including costs, has not been paid
It is a matter for the Court to
determine what is a valid defence but it is likely to
include:
- One or more of the matters included in proof of
liability are incorrect
- The sum is for a penalty that is subject to an appeal or
arbitration
- Insolvency proceedings have been commenced regarding the liable
person.
Regulations state that "The court
shall make the order if it is satisfied that the sum has become
payable by the defendant and has not been paid". The order is made
in respect of the sum payable and the costs reasonably incurred by the applicant
in obtaining the order. Where the council tax is paid before the
hearing date but the costs are not then the court shall, if
requested by the billing authority, make the order in respect of
the costs alone. The issuing of the liability order then enables
the billing authority to use a number of enforcement
options in order to settle the debt. An appeal against the
issue of a liability order is by taxpayer and can be heard at the
next available Magistrates Court hearing.
Liability
Order Costs
Additional costs are awarded by the
Court for the issuing of the liability order.
Enforcement Options
The issuing of a liability order
to a billing authority empowers the authority to obtain relevant
information about the circumstances of the liable person and
undertake enforcement by:
A liability order may be referred
to a bailiff for collection. The bailiff has the legal power to
take away a debtors possessions and sell them in order to pay off
the debt. The process is known as Distress. The bailiff is entitled
to charge costs and fees for the activities performed and some, for
instance the hiring of a van to remove goods, can be expensive.
Attachment
of earnings
Where a liability order has been
obtained the billing authority may serve a notice on the council
taxpayer requiring him to provide details of his employer. If the
taxpayer fails to supply the information within 14 days the billing
authority may issue a penalty against him. On obtaining the
employment details the authority may serve a notice on the employer
instructing him to make deductions from the taxpayers pay to offset
against their council tax account. The amount of the deduction is
determined in regulations and the employer is entitled to deduct £1
for each act of deduction. It is an offence for an employer to fail
without reasonable cause to implement an instruction and an
authority may only issue an instruction for two liability orders at
one time.
Attachment
of a councillor's allowances
Where a liability order has been
obtained against an elected member of a billing authority or
preceptor to that authority then an order may be served on his
authority requiring 40% of his allowances to be deducted and paid
to his council tax account.
Deduction
from job seekers allowance or income support
If a liability order has been
obtained and the council taxpayer is in receipt of income support
or a jobseekers allowance the billing authority may request the
Benefits Agency to make weekly deductions from those benefits. The
amount of the deduction is set out in regulations together with
arrangements for the deduction to continue if the taxpayer changes
address. The deductions may continue until such time as the
liability order has been paid in full or the entitlement to the
benefit ceases.
Insolvency
Where the outstanding debt is above
prescribed limits and is covered by liability orders the billing
authority can apply for the taxpayer to be declared insolvent.
Different arrangements and consequences apply to personal
insolvency (bankruptcy) and corporate insolvency (liquidation). The
arrangements and consequences are specialist matters however the
process includes the option for all parties to agree a voluntary
arrangement for the insolvent person or company to make payments to
their creditors and avoid the formal proceedings. Only council tax
debts incurred as at the time of the insolvency are included in the
insolvency. Further liabilities that accrue after the insolvency
are subject to the normal council tax processes.
Charging
Order
Where more than £1,000 is
outstanding under liability orders and the council taxpayer has a
legal interest in the dwelling, the billing authority may apply to
the county court for a charging order on the property. The effect
of a charging order is that if the property or other legal interest
is sold the amount of the charging order is paid out of the
proceeds. No further enforcement activity for that debt can be
undertaken whilst it is in force and there are provisions for the
order to be varied or discharged upon application by either the
authority or the taxpayer.
Payment Arrangement
The only assumption the legislation
makes regarding payment arrangements is that on receipt of a demand
note a taxpayer will pay by one or more monthly instalments.
However at any time during the collection process a billing
authority and council taxpayer may agree a different payment
arrangement. If a taxpayer is having difficulties making payment,
he/she should contact the Council Tax section to discuss the
situation.
Means
Enquiry
Where other enforcement options
have been unsuccessful the billing authority may make an
application to the Magistrates Court for the commitment to prison
of the liable person. The Court will summons the person to a
hearing to enquire as to his financial means. This is often
referred to as the means enquiry hearing. The Court has the power
to remit the debt, impose a term of imprisonment of up to 90 days
with immediate effect, or impose a term and suspend the commitment
pending the taxpayer paying a payment arrangement imposed by the
court. The Council will also apply for further costs against the
taxpayer.
If the person fails to appear a
warrant will be issued for their arrest and if he fails to abide by
the payment arrangement imposed by the Court the billing authority
may request that he be summonsed again to appear in front of the
Court. At such a hearing the Court has the same powers as at the
original hearing.