Dear Doncaster Borough 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 Doncaster Borough Council have its computer software set to deal with non specific payments. Current or oldest year's liability?
Dear Gwyn Worth,
Re: Request for information under the Freedom of Information Act 2000
Thank you for your request for information.
Your request has been passed to the Revenues department. They will endeavour to search for any information held to provide you with a response as soon as is possible within 20 working days and in any case by the 3rd November 2017.
Freedom of Information Officer
Tel 01302 736000
Please find attached the response to your recent request
Please accept my apologies for the delay
Dear Freedom of Information Requests,
Thank you for your response.
Re; "There is no specific Council Tax legislation which covers the allocation of non-specific payments and principles on the best course of action have been adopted from case law and government guidance.
Whilst the absence of legislation on this point does suggest discretion on behalf of a Council to allocate to current year, it is clearly not what the Government expects..." [1a] & [1b]
Re; "Such action can result in much higher enforcement agent costs and potential action taken to remove goods from their premises. In addition to this further enforcement measures can result in bankruptcy and committal." 
Re; "Such issues usually come to light when a reminder for non-payment is received, which is before any costs are incurred" 
I would like to query the above element of your response.
1a. The general principles, which take into consideration the relevant case law (relevant to the debtor’s rights) are set out in Chitty on Contracts (31st Edition) Volume 1 at Para 21-061 (see below, note R v Miskin Lower Justices):
Debtor’s right to appropriate. It is essential that an appropriation by the debtor should take the form of a communication, express or implied, to the creditor of the debtor’s intention to appropriate the payment to a specified debt or debts so that the creditor may know that his rights of appropriation as creditor cannot arise . It is not essential that the debtor should expressly specify at the time of the payment which debt or account he intended the payment to be applied to. His intention may be collected from other circumstances showing that he intended at the time of the payment to appropriate it to a specific debt or account . Thus, where at the date of payment some of his debts are statute barred and others are not, it will be inferred (in the absence of evidence to the contrary) that the debtor appropriated the payment to the debts that were not so barred. 
353 Leeson v Leeson  2 K.B. 156, 161; Stepney Corp v Osofsky  3 All E.R. 289; Thomas v Ken Thomas Ltd  EWCA Civ 1504,  Bus. LR 429 at .
354 Newmarch v Clay (1811) 14 East 239, 244; Shaw v Picton (1825) 4 B. & C. 715; Young v English (1843) 7 Beav. 10; Nash v Hodgson (1855) 6 De G.M. & G. 474; R. v Miskin Lower Justices  1 Q.B. 533.
355 Nash v Hodgson (1855) 6 De G.M. & G. 474; cf. a balance owing on a current account: Re Footman Bower & Co Ltd  Ch. 443 (and see below, para. 21-067). '
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. 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.
1b. It can not have been the DCLG's intention to require billing authorities appropriate payments to previous year's liability where the customer's implied intention has been to allocate payment to the current year. The guidance merely emphasises the importance of attributing payments to the correct year when completing the Quarterly Return (QRC4), i.e. attributing payments which have been made in the current year (in respect of arrears) to the correct year so as not to misrepresent the "in year” Council Tax collection rates.
2. The customer would not seem to have benefited in this scenario. 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.
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. 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.
For the attention of Gwyn Worth
Thank you for providing further details about cases heard in court,
concerning payment allocation. In your comments and in some of the cases
there is a reference to an expressed or implied intention of the taxpayer.
I believe the rules that are used within the Northgate system cover such
an implied intention as much as possible without staff having to
individually check a payment once it is received. To do this would be
physically Impossible. The list in order of how payments are considered
and recorded was provided in the FOI response. It is only after all of
those rules have first been exhausted that a non-specific payment would
allocate to oldest debt first.
For example :
1) an amount of £175.00 paid as one amount , which matches a current year
instalment of £82.50 and an arrears balance of £92.50 would be split and
allocated to both parts by the system.
2) a payment made of £350.00 , where one current year instalment is due
of £66.00 and an arrears balance exists of £1,500.00, is more difficult to
establish. Does the taxpayer intend the £350.00 to go to arrears , or to
cover the current instalment and further current year instalments or a
combination of both ?
3) If a taxpayer is paying the amount over the phone with the assistance
of a member of staff then they can make their intention clear and the
member of staff would take that instruction and deal with it in accordance
with the taxpayers wishes , even if it meant them taking action after the
call to make sure that the overall amount was split and allocated
4) Where an amount is paid via an automated telephone line or via the
internet then such intentions cannot be expressed by the taxpayer. It is
such cases where the order of what comes first applies . Checks would be
made by the system to match a non specified amount to anything which could
deemed to have been intended by the taxpayer in view of the amount paid,
however this is not always possible. It is in such circumstances when no
rules have been matched and assumptions cannot therefore be made that such
a payment would go to oldest debt where that existed.
The only way around this would be for all unmatched / unspecified amounts
to be put into a holding area for further investigation , involving
contact by a member of staff to that taxpayer asking them where they
wanted it paying to? This would be too costly in terms of time and
resource , with no guarantee that the information would be forthcoming or
that a valid telephone number was held. I hope you can see how this is
I did reiterate in the reply however that where an unspecified amount has
paid off older debt and was not what the taxpayer wanted , then once
contact is made to clarify , Doncaster Council always work with taxpayers
to move payments to where they wish and cancel any recovery action and
costs where this is possible .
I also agree with your point about statutory recovery notices. They are
intended to notify the taxpayer that they have not paid or are in arrears
and what action they need to take, not to highlight problems with payment
allocation, however once the rules within the system have been exhausted
and no express or implied intention can be concluded, it is sometimes a
recovery notice such as a reminder that highlights to the taxpayer that
there is an issue. Action would then be taken promptly to resolve the
situation. It does not matter at what point the stage of recovery is at.
This can always be reversed even where full years instalments have become
due or a summons has been issued. If a customer advises that their
payments were intended for current year, if it is in the taxpayers
interest to move amounts then this will be done and action reversed once
an enquiry was resolved satisfactorily.
I hope that this clarifies your point further. I accept your points
concerning the QRC4 , however I hope that you can appreciate that where
councils apply all non specified payments to current year this is still
contributing to a false position of in year collection, which councils are
measured against. This will show that some councils are performing better
than others when this might not be a reflection of the actual position.
Dear Freedom of Information Requests,
Thank you for responding to my queries. I consider Doncaster Borough Council has provided the information I requested. 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)
As previously stated, 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 by the council's response (see *note*) that there are measures in place to ensure that unspecified payments are allocated to the account which it is least burdensome for the debtor, and consequently the laws surrounding the appropriation of payments are being complied with. This effectively means that 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).
*Note*: "....where an unspecified amount has paid off older debt and was not what the taxpayer wanted, then once contact is made to clarify, Doncaster Council always work with taxpayers to move payments to where they wish and cancel any recovery action and costs where this is possible.....
It does not matter at what point the stage of recovery is at. This can always be reversed even where full years instalments have become due or a summons has been issued. If a customer advises that their payments were intended for current year, if it is in the taxpayers interest to move amounts then this will be done and action reversed once an enquiry was resolved satisfactorily"