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

The request was partially successful.

Dear Knowsley Metropolitan 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 Knowsley Council have its computer software set to deal with non specific payments. Current or oldest year's liability?

Yours faithfully,

Gwyn Worth

Freedom of Information, Knowsley Metropolitan Borough Council

Dear Mr Worth,

Thank you for your email received on 6 November 2017 requesting information about unnecessary recovery action.

I have recorded your request for information under reference F2017.11.4058.

This has been passed to the relevant service and you will receive a response by 4 December 2017.

In line with guidance published by the Information Commissioner’s Office, the council may make a charge for the provision of information – for example in order to cover the costs of postage (in line with the relevant postal charges) or charges for printing and copying (which will reflect photocopying charges levied by the council’s public libraries) or if this falls within the regulations of an EIR (Environmental Information).

You will be informed if a fee is to be applied before information is to be provided.

If you need further information please contact me.

Kind regards,

Freedom of Information
Knowsley MBC
Archway Road
Huyton
Knowsley
Merseyside
L36 9UX

Freedom of Information, Knowsley Metropolitan Borough Council

Dear Gwyn,

 

Freedom of Information request F2017-11-4058

 

We have looked into your request for information about ensuring customers
are not subject to unnecessary recovery action, and our response is shown
below.

 

There are a number of payment allocation rules in the Authority’s Council
Tax software package which include matching on instalments, including
multiple instalments, and also recovery notices. A tolerance is also
applied to account for the potential roundings of payments due. Payments
which do not meet any of the criteria are ordinarily allocated to the
oldest debt in the first instance.

 

Where an incorrect allocation is identified by internal checks, or by
notification from the taxpayer, the allocation would be corrected when
this is appropriate. If any incorrect posting has resulted in recovery
action and/or costs being incurred, then reversal would be considered.

 

If you need further information please see contact details below.

 

Kind regards,

 

Freedom of Information

Knowsley MBC

Archway Road

Huyton

Knowsley

Merseyside

L36 9UX

 

 

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Dear Freedom of Information,

Thank you for your response. I consider Knowsley Borough 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 by the council's use of the expressions "WHEN THIS IS APPROPRIATE" and "WOULD BE CONSIDERED" regarding reallocating misallocated payments that there are no guaranteed measures in place to ensure that unspecified payments are allocated to the account which it is least burdensome for the debtor, 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).

If it appears I have misunderstood any of the council's response (I may well have done ) I would appreciate if you would correct me.

Yours sincerely,

Gwyn Worth