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

The request was successful.

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

Yours faithfully,

Gwyn Worth

John, Nia, Swansea Council

3 Attachments

Dear Mr Worth,

Please find attached response to your FOI.




| |  |
| | |
| |Nia John |
| |Gweithrediadau Ariannol |
| |Control Team Leader |
| |01792 636884 |
| |[1][email address] |
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Dear John, Nia,

Thank you for clarifying my query. I consider Swansea 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 indicating 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 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

Webborn, Martin, Swansea Council

1 Attachment

Dear Mr Worth,

I agree with your interpretation of R v Miskin Lower Justices (1953) and believe our processes do in fact comply with that judgement.

If the payment amount received identifies the debt whether explicitly or implicitly then it must be allocated to that debt. Where the debtor does not make any reference as to where the payment should be allocated and the amount gives no clue it is up to the Local Authority to make that choice (Albermarle Supply Co Ltd v Hind & Co (1928).

In Swansea we will seek to do what is best for the customer in terms of minimising any potential costs incurred. For example in a case where the oldest debt is being collected by an Enforcement Agent and a payment is received that that is not from the agent and does not match a current year instalment it will be applied to the current year in the hope that there will be no need to send any future debts to enforcement agents. Likewise, if a payment arrangement is made that covers more than one year it will take account of the estimated future charges so a situation should not arise where payments are being made against arrears and further charges are incurred for the current financial year.

I hope this answers your query but do not hesitate to contact me if you require any further information.

Yours sincerely

Martin Webborn
Principal Revenues Officer/ Prif Swyddog Refeniw
Room 1.7.5 Civic Centre
Tel (01792) 635925

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Dear Mr Webborn,

Thank you for clarifying the matter. It evident that the overall approach complies with appropriation principles, i.e. the circumstances are evaluated and payment allocated in the best interests of the customer.

Out of interest, it was held in Fernando v. Fernando (Sri Lankan case around the time of Miskin) that where the purpose for which a payment is made is unspecified “it must be carried to that account which it is most beneficial to the debtor to reduce".


Yours sincerely,

Gwyn Worth

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