Exercising discretion when applying to the court for a Council Tax Liability Order

The request was successful.

Dear Hackney Borough Council,

The Council Tax (Administration and Enforcement) Regulations 1992 (the "Regulations") confer a duty on the billing authority to exercise discretion under regulation 34(1) when deciding whether to institute a complaint to the Magistrates' court to enforce payment.

Regulation 34(1) as amended by Regulation 15 of SI 1992/3008 states, with the relevant part emphasised, as follows:

"If an amount which has fallen due under paragraph (3) or (4) of regulation 23 (including those paragraphs as applied as mentioned in regulation 28A(2)) is wholly or partly unpaid, or (in a case where a final notice is required under regulation 33) the amount stated in the final notice is wholly or partly unpaid at the expiry of the period of 7 days beginning with the day on which the notice was issued, THE BILLING AUTHORITY MAY, in accordance with paragraph (2), apply to a magistrates' court for an order against the person by whom it is payable."

Regulation 34(2) states as follows:

"The application is to be instituted by making complaint to a justice of the peace, and requesting the issue of a summons directed to that person to appear before the court to show why he has not paid the sum which is outstanding."

The following are examples (but by no means exhaustive) of what are reasonable factors a recovery officer should take into account in exercising discretion to institute a complaint to the Magistrates court under paragraph (2) of regulation 34 of the Regulations:

1. the level of debt outstanding

2. any payments made subsequent to the full amount becoming due and time remaining of the financial year

3. are circumstances indicative of the debt being settled without resorting to enforcement

4. consider if enforcing the debt would unnecessarily subject the taxpayer to additional costs etc. and therefore amount to a penalty (see 3 above)

5. ensure monies have been prioritised to maintaining the in-year debt

6. allocate to the in-year any monies posted to arrears (or sufficient of it) that would if it had not been misallocated prevented the in-year liability also falling in arrears (see 5 above)

7. check for benefit claims or appeals already in the system and refrain from taking enforcement action where such genuine cases are unresolved

Q1. Does Hackney Borough Council exercise discretion before proceeding under regulation 34(2) of the Council Tax (Administration and Enforcement) Regulations 1992 to request a summons from a justice of the peace (it may be an automated process)

Q2. If yes to (1) what factors are taken into consideration

Yours faithfully,

Helen Barker

hackney@infreemation.co.uk,

Dear Helen Barker

We acknowledge receipt of your email to Hackney:
 

Freedom of Information request - Exercising discretion when applying to
the court for a Council Tax Liability Order

Thank you for your request for information, FOI-5834.

 

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Information Management Team

London Borough of Hackney

References

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2. https://foi.infreemation.co.uk/hackney/
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hackney@infreemation.co.uk,

Dear  Helen Barker

 

Re: Freedom of Information Request.

Thank you for your request for information under the Freedom of
Information Act 2000, received 25 April 2020. Your request has been
considered and our response is in bold below.

 

You requested the following: 

The Council Tax (Administration and Enforcement) Regulations 1992 (the
"Regulations") confer a duty on the billing authority to exercise
discretion under regulation 34(1) when deciding whether to institute a
complaint to the Magistrates' court to enforce payment.
Regulation 34(1) as amended by Regulation 15 of SI 1992/3008 states, with
the relevant part emphasised, as follows:
"If an amount which has fallen due under paragraph (3) or (4) of
regulation 23 (including those paragraphs as applied as mentioned in
regulation 28A(2)) is wholly or partly unpaid, or (in a case where a final
notice is required under regulation 33) the amount stated in the final
notice is wholly or partly unpaid at the expiry of the period of 7 days
beginning with the day on which the notice was issued, THE BILLING
AUTHORITY MAY, in accordance with paragraph (2), apply to a magistrates'
court for an order against the person by whom it is payable."
Regulation 34(2) states as follows:
"The application is to be instituted by making complaint to a justice of
the peace, and requesting the issue of a summons directed to that person
to appear before the court to show why he has not paid the sum which is
outstanding."
The following are examples (but by no means exhaustive) of what are
reasonable factors a recovery officer should take into account in
exercising discretion to institute a complaint to the Magistrates court
under paragraph (2) of regulation 34 of the Regulations:
1. the level of debt outstanding
2. any payments made subsequent to the full amount becoming due and time
remaining of the financial year
3. are circumstances indicative of the debt being settled without
resorting to enforcement
4. consider if enforcing the debt would unnecessarily subject the taxpayer
to additional costs etc. and therefore amount to a penalty (see 3 above)
5. ensure monies have been prioritised to maintaining the in-year debt
6. allocate to the in-year any monies posted to arrears (or sufficient of
it) that would if it had not been misallocated prevented the in-year
liability also falling in arrears (see 5 above)
7. check for benefit claims or appeals already in the system and refrain
from taking enforcement action where such genuine cases are unresolved

Q1. Does Hackney Borough Council exercise discretion before proceeding
under regulation 34(2) of the Council Tax (Administration and Enforcement)
Regulations 1992 to request a summons from a justice of the peace (it may
be an automated process)
Q2. If yes to (1) what factors are taken into consideration

 

The Council’s Response

Q1. Does Hackney Borough Council exercise discretion before proceeding
under regulation 34(2) of the Council Tax (Administration and Enforcement)
Regulations 1992 to request a summons from a justice of the peace (it may
be an automated process)

Yes, as far as this is possible. The Recovery Team reviews the summons
prelist to make sure that action is not taken in respect of deceased
persons, rental companies with no business address recorded, incomplete
company names and statute barred cases.  It would not, however, be the
case that every account that appears on the pre-list would be individually
reviewed to accommodate all of the reasons you suggest.

 

Q2. If yes to (1) what factors are taken into consideration?

As stated, where it is possible to do so, most of the factors cited in
your request will be considered, however in the majority of cases this
will be dependent on contact being received from the Council tax payer
after receipt of an earlier recovery notice. The exceptions are your
points 5 and 6, which refer to prioritising all payments received to the
current year to prevent further recovery action. Where an account has
arrears, payments that do not match a current year instalment (or
multiples thereof) are credited against the arrears. If it is subsequently
brought to the Council’s attention that the payment(s) was (were) intended
for the current year, then it (they) will be transferred to offset the
current year debt.

The Council has found that adopting this procedure actually results in the
better outcome for many Council Tax payers. Where payments are prioritised
to the current year, this can result in previous year liabilities that are
likely to already be subject to advanced recovery action being escalated
further. This can then lead to further costs being added, such as
enforcement agent or insolvency costs, that would be significantly higher
than the Council’s summons and liability order costs.

 

Hackney also takes the following steps to try to ensure that any recovery
action taken is both fair and appropriate.

These measures include:

* Ensuring that no recovery action is taken for an account until any
outstanding correspondence relating to that account has been
processed.
* Checking that Council Tax Reduction has been applied for and granted,
where this is appropriate.
* Withholding action if a complaint or an enquiry from a Councillor or
an MP is awaiting a response
* Not issuing a summons where the outstanding balance is small.
* Checking that the named liable person is correct
* Checking that previous notices (e.g. reminders, final notices, etc.)
have been correctly served
* Checking the age of the debt (partly to ensure the summons will be
within six years from the date the liability was first billed and
partly to see if any other delay that may have occurred within that
period is still considered acceptable and that recovery action is
therefore still appropriate)
* Checking whether any contact was received regarding the debt prior to
the recovery action becoming necessary, and a suspension of recovery
agreed.

 

In addition to these more general measures, Hackney have also introduced
their own bespoke discretionary measures which are aimed at trying to
break the cycle of recovery or preventing entry to that cycle in the first
place. Whilst these are not necessarily directly related to the individual
consideration of each case that has become subject to recovery action,
they are a reflection of the Council’s intention to try to prevent
accounts escalating to that stage.

 

These measures include:

* Sending SMS text messages (where the appropriate details are held) a
few days in advance of each formal recovery notice being sent, either
as a reminder that payment is overdue or as a warning that further
recovery action is imminent. In the latter case, the Council tax payer
is urged to contact the Council so that the action can be avoided if
possible.
* Sending E-mail messages (again where appropriate details are held)
prior to notices being issued in a bid to prompt payment or contact
and so reduce the number of notices required.
* Issuing a Final Notice prior to a summons. Final Notices are no longer
required in certain circumstances (e.g. where an instalment remains
unpaid after a reminder has been sent), but Hackney will still send
one to try to prompt payment ahead of a summons becoming necessary.
* Creating a specialist “Stop the Costs” team, designed to reduce the
number of accounts reaching the point at which a summons is issued.
This team will pro-actively try to make contact with those Council Tax
payers who are either in receipt of, or have recently ceased to
receive, Council Tax Reduction support, or who, where known, are
families with young children and whose accounts appear in recovery
action pre-lists. If contact is made then they can:
* offer alternative payment arrangements,
* offer advice on applying for Council Tax Reduction,
* deal with any enquiries and/or issues that might arise from the call
and which could be a contributing factor for the non-payment,
* advise and assist the Council Tax payer to complete a Standard
Financial Statement so that their income and outgoings can be assessed
to ensure that any arrangement offered is both fair and affordable,
and
* sign-post the Council Tax payer towards financial and debt advice
organisations, including the Citizens’ Advice Bureau, who are
partnering Hackney in a bid to improve the financial well-being of
those who find themselves less able to manage their finances.     
      

 

As with your own list, this is by no means an exhaustive list of the
measures taken by the Revenues Team to try to assist those who are less
able to pay their Council Tax. I hope though, that it at least provides
evidence of the many ways in which Hackney tries to consider the Council
Tax payer’s situation and ability to pay prior to a summons being sought.
All of the measures implemented rely heavily on a spirit of co-operation,
and whilst consideration will be given as far as possible in all cases,
practical assistance can obviously only be given to those who actively
engage with the Council in relation to their debt.

 

As a footnote, we are all experiencing extraordinary and unprecedented
times at the moment. The Covid-19 pandemic crisis has created a huge
amount of uncertainty and distress at a personal level and has had a
devastating financial impact on many of Hackney’s residents and business
community. With this in mind, the Revenues Team has currently suspended
all recovery action.

This situation cannot continue indefinitely, and recovery action will have
to be re-instated eventually in order to ensure that sufficient funds are
available to maintain the many vital services that are provided each day.
However, please be assured that, from a Revenues perspective at least, a
person’s individual circumstances, where known, will continue to be
considered prior to advanced action being taken. 

 

Appeals & Complaints Procedure

If you are dissatisfied with this response and wish to appeal, please
reply to this email and this will be dealt with through our Internal
Review procedure.

 

Your request should be submitted to us within 40 working days of receipt
by you of this response. Any request received after this time will only be
considered at the discretion of the Council.

 

If you are still not satisfied following the Internal Review, you have a
right to appeal to the Information Commissioner's:

[1]https://ico.org.uk/global/contact-us/ema...

Information Commissioner's Office

Wycliffe House

Water Lane

Wilmslow

Cheshire

SK9 5AF

0303 123 1113

 

Yours sincerely

 

Information Management Team

ICT Services
London Borough of Hackney 

References

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