Ensuring customers are not subject to unnecessary recovery action, additional costs or hardship
Dear Forest of Dean 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 Forest of Dean District Council have its computer software set to deal with non specific payments. Current or oldest year's liability?
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Further to your request, our system works by instalment matching. If a payment doesn't match the instalment due for the current financial year, it will allocate it to the oldest debt outstanding. If an account is subject to a special arrangement covering more than one financial year, we can specify how the payment should be split when setting up the arrangement.
If a payment is mistakenly allocated to the wrong year, we can always remove any costs incurred as a result.
Land, Legal & Property Support Officer
Tel: 01594 812513
Fax: 01594 812470
E-mail: [email address]
Dear Tracey Griffiths,
Thank you for stating that unmatched payments are allocated to the oldest debt outstanding.
Would you please confirm whether or not any measures are in place (other than relying on the customer) 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  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.?
Further to your email below, previous year charges, if they are still outstanding will in the majority of cases be subject to recovery action. These accounts would be checked periodically and potentially any payment anomalies could be picked up at this time. There are no other measures in place but should a payment be misallocated, there is not usually any problem moving it to the correct liability.
Forest of Dean District Council
Dear Claire Giles,
Thank you for clarifying my query. I consider Forest of Dean District 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)
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*: "These accounts would be checked periodically and potentially any payment anomalies could be picked up at this time."