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

The request was partially successful.

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

Yours faithfully,

Gwyn Worth

Finance and Resources, Liverpool City Council

Information request
Our reference: 561807

Finance and Resources, Liverpool City Council

1 Attachment

Information request
Our reference: 561807

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Dear Finance and Resources,

Thank you for stating that unmatched payments (allowing a tolerance) will be allocated to 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

Finance and Resources, Liverpool City Council

Information request
Our reference: 563842

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Finance and Resources, Liverpool City Council

Information request
Our reference: 563842

show quoted sections

Dear Finance and Resources,

Thank you for your further response. I can confirm that your original response contained the following:

"The rules for payment allocation also allow a degree of tolerance in case a customer should round their payment up or down. This again will identify which debt a payment is to be allocated to."

Therefore my 21 November request/clarification still stands, i.e:

"Thank you for stating that unmatched payments (allowing a tolerance) will be allocated to 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 Finance and Resources,

Will you please acknowledge receipt of my 29 November 2017 request/clarification.

Yours sincerely,

Gwyn Worth

Information Requests, Liverpool City Council

Dear Mr Worth

In terms of your follow-up questions, we did not mention ‘unmatched payments’ in our initial response.

In respect of your follow-up questions, where payment for the current year is made in accordance with the statutory instalment scheme, the customer’s payment(s) will be allocated to the current year debt. The tolerance that is applied means that where a customer rounds a payment up or down it should be allocated as a statutory instalment.

It should only be where a customer has lost their entitlement to statutory instalments, and does not have a structured repayment arrangement, that the question arises of which year a payment should be allocated to. In this scenario the Billing Authority will have obtained a Liability Order with associated costs for the current year, as well as prior years, and so payment allocation will not adversely affect the customer.

Regards

Information Team

Liverpool City Council I Cunard Building I Water Street I Liverpool I L3 1AH 
Online: www.liverpool.gov.uk
Postal address:
Liverpool City Council I Cunard Building I Water Street I Liverpool I L3 1AH

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Dear Information Requests,

Thank you for your reply. I seem to have assumed that unmatched payments (subject to rounding up/down) are allocated to the oldest debt. However, it is still unclear whether such payments are posted to the oldest debt. If so, are there any measures in place, other than allowing a tolerance to check that allocating an unmatched payment to the oldest debt would have the consequences of putting the current year's liability also in arrears, and if so, 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

Information Requests, Liverpool City Council

Dear Mr Worth

In response to your latest enquiry we can advise that when other rules do not result in auto allocation, a payment will be allocated to the earliest debt for the account to which it is paid. If this is incorrect and a customer advises us of this we will normally reallocate the payment.

Regards

Information Team

Liverpool City Council I Cunard Building I Water Street I Liverpool I L3 1AH
Online: www.liverpool.gov.uk
Postal address:
Liverpool City Council I Cunard Building I Water Street I Liverpool I L3 1AH

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Dear Information Requests,

Thank you for clarifying your response. I consider Liverpool City Counci 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 being unable to confirm that there are measures in place to ensure that unspecified payments are allocated to the account which it is least burdensome for the debtor (other than allowing a tolerance and relying on customer contact) 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 anything by what I have stated I would appreciate if you would correct me.

Yours sincerely,

Gwyn Worth

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