Exercising discretion when applying to the court for a Council Tax Liability Order

The request was partially successful.

Dear City of York Council,

The Council Tax (Administration and Enforcement) Regulations 1992 (the "Regulations") confer a duty on the billing authority to exercise discretion under regulation 34(1) when deciding whether to institute a complaint to the Magistrates' court to enforce payment.

Regulation 34(1) as amended by Regulation 15 of SI 1992/3008 states, with the relevant part emphasised, as follows:

"If an amount which has fallen due under paragraph (3) or (4) of regulation 23 (including those paragraphs as applied as mentioned in regulation 28A(2)) is wholly or partly unpaid, or (in a case where a final notice is required under regulation 33) the amount stated in the final notice is wholly or partly unpaid at the expiry of the period of 7 days beginning with the day on which the notice was issued, THE BILLING AUTHORITY MAY, in accordance with paragraph (2), apply to a magistrates' court for an order against the person by whom it is payable."

Regulation 34(2) states as follows:

"The application is to be instituted by making complaint to a justice of the peace, and requesting the issue of a summons directed to that person to appear before the court to show why he has not paid the sum which is outstanding."

The following are examples (but by no means exhaustive) of what are reasonable factors a recovery officer should take into account in exercising discretion to institute a complaint to the Magistrates court under paragraph (2) of regulation 34 of the Regulations:

1. the level of debt outstanding

2. any payments made subsequent to the full amount becoming due and time remaining of the financial year

3. are circumstances indicative of the debt being settled without resorting to enforcement

4. consider if enforcing the debt would unnecessarily subject the taxpayer to additional costs etc. and therefore amount to a penalty (see 3 above)

5. ensure monies have been prioritised to maintaining the in-year debt

6. allocate to the in-year any monies posted to arrears (or sufficient of it) that would if it had not been misallocated prevented the in-year liability also falling in arrears (see 5 above)

7. check for benefit claims or appeals already in the system and refrain from taking enforcement action where such genuine cases are unresolved

Q1. Does City of York Council exercise discretion before proceeding under regulation 34(2) of the Council Tax (Administration and Enforcement) Regulations 1992 to request a summons from a justice of the peace (it may be an automated process)

Q2. If yes to (1) what factors are taken into consideration

Yours faithfully,

Helen Barker

foi@york.gov.uk, City of York Council

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Dear Ms Barker
 
Please see below the response to your enquiry under the Freedom of
Information Act (FOIA) received on 21^st April 2020.
 
Q1. Does City of York Council exercise discretion before proceeding under
regulation 34(2) of the Council Tax (Administration and Enforcement)
Regulations 1992 to request a summons from a justice of the peace (it may
be an automated process)
 
Q2. If yes to (1) what factors are taken into consideration
 
I can confirm that we hold this information.  However, this information is
exempt from disclosure under section 21 of the FOIA as it is considered
reasonably accessible to you by other means.
 
You can locate the information at
[1]https://www.york.gov.uk/CouncilTaxArrears
[2]https://www.york.gov.uk/council-tax/summ...
 
If you are dissatisfied with our response you have the right to ask for a
review of how your enquiry was handled and responded to. This can be done
by contacting us through [3][City of York Council request email] within 40 working days of
receiving your response, stating your reason(s) why you are dissatisfied.
If you remain dissatisfied after receiving the review response you can
contact the Information Commissioner, using the online form on the
following link:
 
[4]http://ico.org.uk/global/contact-us/
 
Alternatively you can call on telephone number 0303 123 1113 (local rate)
Yours sincerely,
 
 
City of York Council  | Complaints Team, Customer & Business Support
Services
West Offices | Station Rise | York YO1 6GA
[5]www.york.gov.uk | [6]facebook.com/cityofyork | [7]@CityofYork
 
 
 
 
 
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Dear [email address],

Thank you for your response.

The Council’s website and and other information I have seen indicate that discretion is not exercised at the point where a decision is needed to be made about whether to request a summons. Discretion is applied earlier than this, after a summons has been issued but before a liability order is obtained and after a liability order has been obtained.

So no discretion is exercised when requesting the issue of a summons and the procedure is effectively automated (the defendant incurs a £62.50 sum for that action). However, that sum actually covers the council's additional expenditure in respect of officer time engaging with customers who choose to query their accounts to arrange payment plans which would be conditioned upon the council obtaining a Liability Order (to secure the debt) adding a total £102.50 court costs comprising summons costs of £62.50 plus a further £40.00. This sum (£40.00) is added to the £62.50 costs already incurred for the request of the summons in respect of the accounts of all customers who have not paid the total amount outstanding of their liability, whether choosing to query their accounts or not. This is presumably to compensate the council for the officer time attributed to dealing with customers (in respect of those who contacted them) and making the application for a Liability Order (on day of the hearing).

Although its possible for a customer to avoid potential summons costs, for example, when a taxpayer who is struggling to pay contacts the Council and arranges a payment plan before the summons stage. Discretion whether to enter into a payment agreement with a taxpayer is applied again once the council has obtained a liability order (as an alternative to taking recovery action) but of course by that time she will have had the total £102.50 court costs added to the debt and included in the payment plan.

So the costs in reality cover as well as the expenditure already described the council's additional expenditure both before the summons is requested and after the liability order has been obtained in respect of officer time engaging with customers who agree to enter into payment arrangements.

Information obtained from the council's website also suggests what would be valid defences against the issue of a Summons/Liability Order. However, there are six obvious additional defences that would be valid if no discretion is exercised prior to requesting the issue of a summons and expenditure incurred by the council both before and once the summons has been issued and after the liability order has been obtained are included in those costs. They would be that;

1. the billing authority has not (does not) comply with regulation 34(1) of the Council Tax (Administration and Enforcement) Regulations 1992;

2. expenditure amounting to £62.50 was not incurred by the council in respect of instituting the complaint;

3. the costs have been inflated to subsidise customers who elect to query their accounts, make payment arrangements, etc.;

4. the costs in respect of instituting the summons include expenditure which is incurred by the council after that action;

5. the costs have been inflated to subsidise expenditure incurred by the council in respect of potential applications to the court but which are not made by virtue of negotiations that have taken place; and

6. the costs in general have been inflated to subsidise expenditure incurred by the council in respect of officer time monitoring arrangements and/or engaging with customers after the process of applying for and obtaining the liability order has ended.

I would appreciate the council reviewing my request and confirming that the response to my request is "No" to (Q1) and therefore "N/A" in respect of (Q2).

Yours sincerely,

Helen Barker

foi@york.gov.uk, City of York Council

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Dear Ms Barker
 
Following your request dated the 19^th May 2020  I have now completed a
review of the response to your request under the Freedom of Information
Act (FOIA).
 
I would appreciate the council reviewing my request and confirming that
the response to my request is "No" to (Q1) and therefore "N/A" in respect
of (Q2).
 

 1. the billing authority has not (does not) comply with regulation 34(1)
of the Council Tax (Administration and Enforcement) Regulations 1992;

 
The council does comply to regulation 34(1)
 

 2. expenditure amounting to £62.50 was not incurred by the council in
respect of instituting the complaint;

 
There are many reasons why arrears may occur, and if there any
discrepancies these can be investigated through the appropriate
procedures. Residents will not be fined for making a complaint.
 
If you remain dissatisfied you can now contact the Information
Commissioner, contact details below:
Information Commissioner's Office
Wycliffe House Water Lane
Wilmslow
Cheshire
SK9 5AF
Tel: 0303 123 1113 (local rate) or 01625 545 745 if you prefer to use a
national rate number
Fax: 01625 524 510
Or email: [1][email address] (please include your telephone number)
 
Yours sincerely
 
 
City of York Council  | Complaints Team, Customer & Business Support
Services
West Offices | Station Rise | York YO1 6GA
[2]www.york.gov.uk | [3]facebook.com/cityofyork | [4]@CityofYork
 
 
 
 
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