Ensuring customers are not subject to unnecessary recovery action, additional costs or hardship

The request was successful.

Dear South Oxfordshire District Council,

A council taxpayer who owes more than just the current year's liability runs the risk of incurring additional recovery costs through a further application for a liability order if payments which are intended for the current year's liability are allocated by the council's computer to the previous year's liability. This would most likely happen where a non specific payment is made and the computer software is set to automatically allocate these payments to the oldest year's debt.

Councils computer systems have the necessary flexibility to be set to allow non specific payments to be allocated to the arrears or the current year's liability.

I understand that the majority of billing authorities have their computer software set to ensure that their customers are not subject to unnecessary recovery action, additional costs or hardship, i.e. so non specific payments are allocated to the current year's liability.

How does South Oxfordshire Council have its computer software set to deal with non specific payments. Current or oldest year's liability?

Yours faithfully,

Gwyn Worth

FOI South, South Oxfordshire District Council

Dear Gwyn,

Thank you for your Freedom of Information requests, which were received by
Vale of White Horse and South Oxfordshire District Council on 20 October
2017.
Please accept this email as confirmation that your request has been
received and forwarded to the relevant department and that a response will
be sent to you within 20 working days.
The deadline for this will be 17 November 2017. 
The reference number for these requests are Vale 17/659 and South 17/476.
I trust that this email is sufficient to assure you that your request is
being dealt with. However, should you have an queries in the meantime,
please do not hesitate to contact the FOI team at [South Oxfordshire District Council request email]
or [email address]
Regards
FOI Team
 
Policy & Partnerships
South Oxfordshire and Vale of White Horse District Councils
 
Direct line: 01235 422371
[1]www.southoxon.gov.uk 
www.whitehorsedc.gov.uk

--------------------------------------------------------------------------

From: Gwyn Worth <[FOI #439793 email]>
Sent: 20 October 2017 08:58
To: FOI South
Subject: Freedom of Information request - Ensuring customers are not
subject to unnecessary recovery action, additional costs or hardship
 
Dear South Oxfordshire District Council,

A council taxpayer who owes more than just the current year's liability
runs the risk of incurring additional recovery costs through a further
application for a liability order if payments which are intended for the
current year's liability are allocated by the council's computer to the
previous year's liability. This would most likely happen where a non
specific payment is made and the computer software is set to automatically
allocate these payments to the oldest year's debt.

Councils computer systems have the necessary flexibility to be set to
allow non specific payments to be allocated to the arrears or the current
year's liability.

I understand that the majority of billing authorities have their computer
software set to ensure that their customers are not subject to unnecessary
recovery action, additional costs or hardship, i.e. so non specific
payments are allocated to the current year's liability.

How does South Oxfordshire Council have its computer software set to deal
with non specific payments. Current or oldest year's liability?

Yours faithfully,

Gwyn Worth

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Vicky Johnson,

Dear Gwyn

Thank you for your Freedom of Information requests, which were logged
under FOI 17/476 SODC and 17/659 Vale and passed to me to respond
accordingly.

Under Section 1 of the Freedom of Information Act 2000 (the 2000 Act) you
are entitled to be informed in writing whether the council holds the
information specified in your request and, if that is the case, to have
that information communicated to you unless any of the statutory
exemptions apply. I have considered your request and can confirm we do
hold the information asked and I do not believe any of the statutory
exemptions apply to your request. 

You have asked how the council's computer software set to deal with non
specific payments on council tax.   I can confirm that both SODC & Vale
the system is set (unless specified otherwise) to allocate any
unrecognised payment received against the oldest debt.

Please treat this as the council's formal response under the 2000 Act. If
you are not satisfied with the decision I have made in response to your
request, you may complain under the council's complaints procedure. If you
remain dissatisfied after following that procedure, you have the right
under Section 50 of the 2000 Act to complain to the Information
Commissioner if you feel the council has not dealt with your request
properly. You can contact the Commissioner at Wycliffe House, Water Lane,
Wilmslow, Cheshire SK9 5AF (telephone number: 01625 545745). You can also
find further information at [1]www.ico.gov.uk . 

Kind Regards

Vicky Johnson
Revenues & Benefits Client Officer
Finance
Vale of White Horse District Council &
South Oxfordshire District Council

Direct Line: 01235 422481 (Abingdon - VWHDC) Text phone users add 18001
before you dial
Email : [2][email address]
      
Visit us at:
[3]www.whitehorsedc.gov.uk
[4]www.southoxon.gov.uk
 

References

Visible links
1. http://www.ico.gov.uk/
2. mailto:[email address]
3. http://www.whitehorsedc.gov.uk/
4. http://www.southoxon.gov.uk/

Dear Vicky Johnson,

Thank you for stating that 'both SODC & Vale the system is set (unless specified otherwise) to allocate any unrecognised payment received against the oldest debt'.

Would you please confirm whether or not any measures are in place to check that allocating an unmatched payment to the oldest debt in these circumstances would have the consequences of putting the current year's liability also in arrears, and if so, in accordance with R. v Miskin Lower Justices [1953] 1 Q.B. 533, whether the payment would be moved in respect of the current year's account to avoid unnecessary recovery action, additional costs etc.?
Yours sincerely,

Gwyn Worth

Vicky Johnson,

Dear Gwyn

Thank you for your email.

I will check this matter and reply to you ASAP.

Kind regards

Vicky Johnson
Revenues & Benefits Client Officer
Finance
Vale of White Horse District Council &
South Oxfordshire District Council

Direct Line: 01235 422481 (Abingdon - VWHDC) Text phone users add 18001
before you dial
Email : [1][email address]
      
Visit us at:
[2]www.whitehorsedc.gov.uk
[3]www.southoxon.gov.uk
 

--------------------------------------------------------------------------

From: Gwyn Worth <[FOI #439793 email]>
Sent: 24 October 2017 14:57
To: Vicky Johnson
Subject: Re: Freedom of Information Request Vale of White Horse DC (Vale)
17/659 & South Oxfordshire DC (SODC) 17/476
 
Dear Vicky Johnson,

Thank you for stating that 'both SODC & Vale the system is set (unless
specified otherwise) to allocate any unrecognised payment received against
the oldest debt'.

Would you please confirm whether or not any measures are in place to check
that allocating an unmatched payment to the oldest debt in these
circumstances would have the consequences of putting the current year's
liability also in arrears, and if so, in accordance with R. v Miskin Lower
Justices [1953] 1 Q.B. 533, whether the payment would be moved in respect
of the current year's account to avoid unnecessary recovery action,
additional costs etc.?
Yours sincerely,

Gwyn Worth

Vicky Johnson,

Dear Gwyn

Thank you for your email.

I can confirm that both Vale and SODC , if it was ascertained that the
payment was intended for a particular financial year can (and do) adjust
the cash allocation accordingly.

I would stress,  that unrecognised payments will always be assigned to the
oldest debt, as this is where the highest risk of further enforcement
action (and costs) are.  It is not for the council to second guess where
an unspecified sum was intended to go, especially if it doesn’t actually
balance back to anything. 

Furthermore, if it is not auto allocating to the current year then it is
because the amount is not correct and therefore recovery action would
likely happen on the current year anyway – a reminder notice serves as a
prompt for the taxpayer to get in contact to discuss their account and, if
appropriate to do so, the current/future installments can be adjusted to
reflect a fixed payment plan.

I hope this has answered your query.  If you have any further queries,
please do not hesitate to contact me.

Kind Regards

Vicky Johnson
Revenues & Benefits Client Officer
Finance
Vale of White Horse District Council &
South Oxfordshire District Council

Direct Line: 01235 422481 (Abingdon - VWHDC) Text phone users add 18001
before you dial
Email : [1][email address]
      
Visit us at:
[2]www.whitehorsedc.gov.uk
[3]www.southoxon.gov.uk
 

--------------------------------------------------------------------------

From: Gwyn Worth <[FOI #439793 email]>
Sent: 24 October 2017 14:57
To: Vicky Johnson
Subject: Re: Freedom of Information Request Vale of White Horse DC (Vale)
17/659 & South Oxfordshire DC (SODC) 17/476
 
Dear Vicky Johnson,

Thank you for stating that 'both SODC & Vale the system is set (unless
specified otherwise) to allocate any unrecognised payment received against
the oldest debt'.

Would you please confirm whether or not any measures are in place to check
that allocating an unmatched payment to the oldest debt in these
circumstances would have the consequences of putting the current year's
liability also in arrears, and if so, in accordance with R. v Miskin Lower
Justices [1953] 1 Q.B. 533, whether the payment would be moved in respect
of the current year's account to avoid unnecessary recovery action,
additional costs etc.?
Yours sincerely,

Gwyn Worth

Dear Vicky Johnson,

Thank you for your response.

Re; 'I would stress, that unrecognised payments will always be assigned to the oldest debt, as this is where the highest risk of further enforcement action (and costs) are.' [1]

Re; 'Furthermore, if it is not auto allocating to the current year then it is because the amount is not correct and therefore recovery action would likely happen on the current year anyway' [2]

Re; 'a reminder notice serves as a prompt for the taxpayer to get in contact to discuss their account and, if appropriate to do so, the current/future installments can be adjusted to reflect a fixed payment plan' [3]

I would like to query the above elements of your response (in order).

1. This would seem to achieve nothing in the way of benefiting the customer. The net result would mean that rather than having ONE year's liability subject to potential enforcement, bankruptcy, committal proceedings or a charging order, the customer would have TWO year's liability potentially subject to those burdens.

2. A customer who has outstanding liability from a previous year may make an un-matched payment in excess of the current year's instalment amount and recovery action would NOT happen on the current year if it was posted to that liability

3. It is not the purpose of statutory notices (reminders, final notices etc.) to alert customers that the billing authority may have wrongly allocated payments. The notices are to inform the customer that they need to pay a certain amount by a due date to avoid further action being taken. This is one reason why statutory notices can not play a legitimate part in the appropriation process, another being they cannot be relied on as the law provides that a taxpayer has only a limited number of chances before no more reminders are issued.

Yours sincerely,

Gwyn Worth

Vicky Johnson,

Dear Gwyn

 Thank you for your email.  Please accept my apologies for the delay in
replying.

I can confirm the following in response to your queries:-

1.       Not at all. It could avoid a taxpayer from having his arrears
escalated to the Enforcement Agents in the first place, thus avoiding
substantial fees (£310) and having goods removed etc. All that would
initially happen on the current year is that a reminder would go out,
acting as a formal prompt to get in touch – no costs or fees incurred at
all. If you are talking about enforcement action on the current year then
the taxpayer’s right to pay by installment has already been rescinded
anyway so there are no installments.  

2.       Noted.

 

3.       Noted.

 

The council tax demand, our recovery notices and our procedures are very
clear and well tested.  Whilst you may disagree with our approach and
whilst we thank you for your comments the council has no plans as this
point in time to change our procedures.

Kind Regards

Vicky Johnson
Revenues & Benefits Client Officer
Finance
Vale of White Horse District Council &
South Oxfordshire District Council

Direct Line: 01235 422481 (Abingdon - VWHDC) Text phone users add 18001
before you dial
Email : [1][email address]
      
Visit us at:
[2]www.whitehorsedc.gov.uk
[3]www.southoxon.gov.uk
 

--------------------------------------------------------------------------

From: Gwyn Worth <[FOI #439793 email]>
Sent: 26 October 2017 10:05
To: Vicky Johnson
Subject: Re: Freedom of Information Request Vale of White Horse DC (Vale)
17/659 & South Oxfordshire DC (SODC) 17/476
 
Dear Vicky Johnson,

Thank you for your response.

Re; 'I would stress, that unrecognised payments will always be assigned to
the oldest debt, as this is where the highest risk of further enforcement
action (and costs) are.' [1]

Re; 'Furthermore, if it is not auto allocating to the current year then it
is because the amount is not correct and therefore recovery action would
likely happen on the current year anyway' [2]

Re; 'a reminder notice serves as a prompt for the taxpayer to get in
contact to discuss their account and, if appropriate to do so, the
current/future installments can be adjusted to reflect a fixed payment
plan' [3]

I would like to query the above elements of your response (in order).

1. This would seem to achieve nothing in the way of benefiting the
customer. The net result would mean that rather than having ONE year's
liability subject to potential enforcement, bankruptcy, committal
proceedings or a charging order, the customer would have TWO year's
liability potentially subject to those burdens.

2. A customer who has outstanding liability from a previous year may make
an un-matched payment in excess of the current year's instalment amount
and recovery action would NOT happen on the current year if it was posted
to that liability

3. It is not the purpose of statutory notices (reminders, final notices
etc.) to alert customers that the billing authority may have wrongly
allocated payments. The notices are to inform the customer that they need
to pay a certain amount by a due date to avoid further action being taken.
This is one reason why statutory notices can not play a legitimate part in
the appropriation process, another being they cannot be relied on as the
law provides that a taxpayer has only a limited number of chances before
no more reminders are issued.

Yours sincerely,

Gwyn Worth

Dear Vicky Johnson,

Thank you for your response. I consider South Oxfordshire District Council has provided the information I requested, however, the purpose of this exercise was to ascertain whether or not the principles surrounding the appropriation of payments were being adhered to.

R v Miskin Lower Justices (1953)

It was held in R v Miskin Lower Justices, that where an amount obviously relates to a specific liability, it would be an unwarranted assumption to allocate the payment elsewhere.

If no instruction is given at the time of payment, then the council has a duty to allocate payment to the account which it is most beneficial to the debtor to reduce. That would be in the majority of cases the current liability if the consequences of allocating payment to the arrears meant that the customer was subject to unnecessary recovery action, additional costs etc.

I understand from the council's explanation that there are no measures in place to ensure that unspecified payments are allocated to the account which it is least burdensome for the debtor (except relying on customer contact on being served a statutory notice) that the laws surrounding the appropriation of payments are not being complied with. If the laws of appropriation were being complied with, an unmatched payment allocated to the oldest debt (having the consequences of putting the current year's liability also in arrears) would be reallocated to the current year's liability on account of the circumstances implying that this was the debtor's intention (least burdensome for the debtor).

P.S.

A percentage of customers will have reached a stage where they have been served the maximum number of statutory reminders the law permits for the year and so a subsequent failure to keep their account up to date (or perceived failure) will result in the demand for the outstanding liability for the year.

Re; '....the taxpayer’s right to pay by installment has already been rescinded anyway so there are no installments'

For the above to be strictly relevant, an instalment paid in these circumstances would need to be returned to the customer. I doubt this ever happens.

Yours sincerely,

Gwyn Worth

Vicky Johnson,

Dear Gwyn

Thank you for your email.

I have pass this on to our revenues manager for review.

Kind regards

Vicky Johnson
Revenues & Benefits Client Officer
Finance
Vale of White Horse District Council &
South Oxfordshire District Council

Direct Line: 01235 422481 (Abingdon - VWHDC) Text phone users add 18001
before you dial
Email : [1][email address]
      
Visit us at:
[2]www.whitehorsedc.gov.uk
[3]www.southoxon.gov.uk
 

--------------------------------------------------------------------------

From: Gwyn Worth <[FOI #439793 email]>
Sent: 03 November 2017 19:34
To: Vicky Johnson
Subject: Re: Freedom of Information Request Vale of White Horse DC (Vale)
17/659 & South Oxfordshire DC (SODC) 17/476
 
Dear Vicky Johnson,

Thank you for your response. I consider South Oxfordshire District Council
has provided the information I requested, however, the purpose of this
exercise was to ascertain whether or not the principles surrounding the
appropriation of payments were being adhered to.

R v Miskin Lower Justices (1953)

It was held in R v Miskin Lower Justices, that where an amount obviously
relates to a specific liability, it would be an unwarranted assumption to
allocate the payment elsewhere.

If no instruction is given at the time of payment, then the council has a
duty to allocate payment to the account which it is most beneficial to the
debtor to reduce. That would be in the majority of cases the current
liability if the consequences of allocating payment to the arrears meant
that the customer was subject to unnecessary recovery action, additional
costs etc.

I understand from the council's explanation that there are no measures in
place to ensure that unspecified payments are allocated to the account
which it is least burdensome for the debtor (except relying on customer
contact on being served a statutory notice) that the laws surrounding the
appropriation of payments are not being complied with. If the laws of
appropriation were being complied with, an unmatched payment allocated to
the oldest debt (having the consequences of putting the current year's
liability also in arrears) would be reallocated to the current year's
liability on account of the circumstances implying that this was the
debtor's intention (least burdensome for the debtor).

P.S.

A percentage of customers will have reached a stage where they have been
served the maximum number of statutory reminders the law permits for the
year and so a subsequent failure to keep their account up to date (or
perceived failure) will result in the demand for the outstanding liability
for the year.

Re; '....the taxpayer’s right to pay by installment has already been
rescinded anyway so there are no installments'

For the above to be strictly relevant, an instalment paid in these
circumstances would need to be returned to the customer. I doubt this ever
happens.

Yours sincerely,

Gwyn Worth

Vicky Johnson,

Dear Gwyn

The key point to note “where an amount obviously relates to a specific
liability…” it will be allocated against that account, irrelevant of any
other arrears by both South Oxfordshire DC & Vale of White Horse DC. If it
is not (for whatever reason) allocated correctly but subsequently
identified as belonging to an alternative account then it can and will be
transferred accordingly. Should any recovery action been advanced on the
other liability and, the impact of that payment transfer puts the account
back on track (or ahead), then that action can be cancelled.   
 
The councils do not share your opinion that in the majority of cases it is
most beneficial to allocate payment to the current year. Whilst it would
be extremely beneficial  for the council’s own in-year collection levels
if it did take this approach, it would certainly not benefit the majority
of taxpayers.
However, you may be interested to know that all accounts identified for
summonses and/or further enforcement action (Enforcement Agents etc.)
receive a 100% manual check prior to action being taken – this is to cover
scenarios where there may have been  clear misallocation of funds, or a
single payment that was intended to have been split to cover two separate
accounts or liabilities etc. This manual exercise, whilst extremely time
consuming, does mean that recovery action is minimized where possible. 
From this exercise we also write out (email ideally) when someone is
making what appears to be random payments that do not correlate to
anything. We therefore do vet accounts before any costs have been incurred
to the taxpayer. However, I will stress that if taxpayers fails to pay in
accordance with their bills and does not contact the council then they do
run the risk of receiving reminders and robust notices.
 
For information, we have rolled out the new Online Portal, making it
easier for taxpayers to see all their Live accounts
details/transactions/balances etc. online. This clearly shows where
payments have gone and hopefully makes things clearer for our customers.
  
 
We will not be making any changes to our procedures, which have helped the
councils achieve impressive collection levels, which are up there amongst
the highest in the country. This helps ensure future council tax is kept
as low as possible, which is very important for our residents.
 
Thank you for comments and I trust this clarifies the council’s stance on
this matter.

Kind Regards

Vicky Johnson
Revenues & Benefits Client Officer
Finance
Vale of White Horse District Council &
South Oxfordshire District Council

Direct Line: 01235 422481 (Abingdon - VWHDC) Text phone users add 18001
before you dial
Email : [1][email address]
      
Visit us at:
[2]www.whitehorsedc.gov.uk
[3]www.southoxon.gov.uk
 

--------------------------------------------------------------------------

From: Gwyn Worth <[FOI #439793 email]>
Sent: 03 November 2017 19:34
To: Vicky Johnson
Subject: Re: Freedom of Information Request Vale of White Horse DC (Vale)
17/659 & South Oxfordshire DC (SODC) 17/476
 
Dear Vicky Johnson,

Thank you for your response. I consider South Oxfordshire District Council
has provided the information I requested, however, the purpose of this
exercise was to ascertain whether or not the principles surrounding the
appropriation of payments were being adhered to.

R v Miskin Lower Justices (1953)

It was held in R v Miskin Lower Justices, that where an amount obviously
relates to a specific liability, it would be an unwarranted assumption to
allocate the payment elsewhere.

If no instruction is given at the time of payment, then the council has a
duty to allocate payment to the account which it is most beneficial to the
debtor to reduce. That would be in the majority of cases the current
liability if the consequences of allocating payment to the arrears meant
that the customer was subject to unnecessary recovery action, additional
costs etc.

I understand from the council's explanation that there are no measures in
place to ensure that unspecified payments are allocated to the account
which it is least burdensome for the debtor (except relying on customer
contact on being served a statutory notice) that the laws surrounding the
appropriation of payments are not being complied with. If the laws of
appropriation were being complied with, an unmatched payment allocated to
the oldest debt (having the consequences of putting the current year's
liability also in arrears) would be reallocated to the current year's
liability on account of the circumstances implying that this was the
debtor's intention (least burdensome for the debtor).

P.S.

A percentage of customers will have reached a stage where they have been
served the maximum number of statutory reminders the law permits for the
year and so a subsequent failure to keep their account up to date (or
perceived failure) will result in the demand for the outstanding liability
for the year.

Re; '....the taxpayer’s right to pay by installment has already been
rescinded anyway so there are no installments'

For the above to be strictly relevant, an instalment paid in these
circumstances would need to be returned to the customer. I doubt this ever
happens.

Yours sincerely,

Gwyn Worth

Dear Vicky Johnson,

Re; "The councils do not share your opinion that in the majority of cases it is most beneficial to allocate payment to the current year. Whilst it would be extremely beneficial for the council’s own in-year collection levels if it did take this approach, it would certainly not benefit the majority of taxpayers."

You have stated the above apparently without regard for payments being non-specified (unmatched). I of course didn't mean payments which were obviously intended to credit the arrears should be allocated to the current year. The in-year collection levels would not artificially be inflated if payments were allocated to the year's liability which the customer intended whether they be matched or unmatched.

It might be worth taking into consideration the following (see link) which appears to be guidance to local authorities summarising relevant case authority concerning appropriation of payments.

https://www.whatdotheyknow.com/request/4...

See quoted that which refers to R v Miskin Lower Justices (emphasised):

"It follows that it is not essential for there to be a specific expression by the debtor as to which account is to be credited. The intention may be gathered from other circumstances or IMPLIED BY THE DEBTOR'S LIABILITY that it would be an unwarranted assumption to allocate it elsewhere (R v Miskin Lower Justices (1953) 1 QB 533). "

Hence, if the laws of appropriation were to be complied with, an unmatched payment allocated to the oldest debt (having the consequences of putting the current year's liability also in arrears) would require reallocating to the current year's liability. The circumstances would imply that this was the debtor's intention as it would be least burdensome for him and would be an unwarranted assumption to do differently.

Thank you for the provided information and subsequent clarification which satisfies my request. I am not expecting any further response.

Yours sincerely,

Gwyn Worth

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