Summary: Ms X complained the Council unfairly pursued her for Council tax payments she did not owe. She said this caused her stress and upset. The Council was at fault when it failed to clearly explain what she owed on several occasions. The Council has agreed to make a payment to Ms X in recognition of the uncertainty and stress this caused her.

The complaint

1. Ms X complained the Council did not manage the outstanding charges on her Council tax account correctly. Specifically, she said the Council:
• failed to collect attachment of earnings payments from her employer, causing her account to accrue more debt.
• failed to remove charges from the account after she provided proof she had already paid them.
• issued a court summons and pursued her for a debt caused by the Council failing to correctly allocate payments to her account.
• quoted varying outstanding debt amounts on her account.
2. Ms X said this situation caused her stress and inconvenience.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

5. I have spoken to Ms X and discussed her view of the complaint.
6. I considered information and documents provided by Ms X and the Council, which includes her complaint form and correspondence shared between Ms X and the Council.
7. I wrote to Ms X and the Council with an initial draft decision and a further amended draft decision. I gave them both the opportunity to comment. I considered their comments on the initial and amended draft decision before I made the final decision.

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What I found

Council Tax

8. Council tax is a combination of tax on the value of a property and a tax on individuals. The occupier or owner pays it.
9. The Council Tax (Administration and Enforcement) Regulations 1992 cover both the way councils collect payments of council tax and the way councils can recover council tax debt.
10. The Tribunals, Courts and Enforcement Act 2007 and associated regulations cover the way bailiffs may recover debts.
11. The council tax bill for the year is due on the 1st April. A council will usually collect payment through monthly instalments. If any instalment is missed the council will send the liable person a reminder. If a payment is still not made or a further payment missed, then the entire outstanding balance will be due (that is the full amount for the rest of the year).
12. To use the various powers available to it to recover unpaid council tax, a council has to apply to the Magistrates Court for a liability order against those it believes are liable. Once a council has obtained a liability order it can take recovery action.
13. A liability order gives a council legal powers to take enforcement action to collect the money owed. This can include taking deductions from benefits, getting an attachment of earnings (by which deductions are taken directly from earnings by an employer and passed to the Council) or using bailiffs. The Council can decide which recovery method it wishes to use but it can only use one method for one liability order at one time

Attachment of Earnings orders

14. An attachment of earnings order is a legal document which enables an employer to collect council tax from a resident’s wages if they are in PAYE employment.
15. The order is served by the council, at its discretion, not by the court. Any appeal against the order is to the council, and there is no further appeal from the council. The only discretions the council has are to make the order, not make the order, or stop an existing order. The payments are collected by the employer. Once an order is paid the council must write and tell the employer.

Ms X’s complaint

16. Ms X suffered financial hardship in 2017 and 2018 and fell behind on her council tax payments for the 2017/2018 financial year.
17. The Council was granted a liability order by the court in December 2017 after Ms X fell behind on her monthly payments. The Council sent Ms X notice of this several days later. The Council has confirmed it sent Ms X’s employer an attachment of earnings order in January 2018. It did not receive a response and sent further reminder letters in June, July and August 2018. The Council did not receive a response from Ms X’s employers.
18. In June 2019, Ms X started receiving debt recovery letters from the Council citing non-payment of council tax. The Council also sent Ms X notice of the liability order in July 2019.
19. Ms X believed she was up to date with her current year’s council tax. She called the Council and requested a breakdown of the debt, which the Council provided. In August 2019, Ms X sent the Council bank statements showing the payments she made and told the Council her employer had deducted payments through an attachment of earnings order.
20. Ms X complained to the Council in September 2019 after receiving a court summons for unpaid council tax. Ms X sent the Council a selection of bank statements and said she had made all agreed payments. She said the Council should have pursued her employer for the outstanding debt as the employer had deducted money from her wages under the attachment of earnings order. The Council responded to Ms X’s complaint, advising her employer failed to pass on the deductions made from her earnings. Ms X’s employer went on to make a payment to the Council in October 2019 which cleared her balance for the financial year 2017/2018. The Council said it used the remaining credit to reduce the balance for the financial year 2018/2019 to £47.70.
21. The Council conceded it failed to allocate a £100 payment Ms X made to the correct financial year which had contributed to the debt for the current financial year. The Council said it had withdrawn the summons, so she was no longer required to attend the court hearing. The Council said the outstanding debt for the current council tax year was £640.96 and Ms X needed to make five payments between November 2019 and March 2020. The Council invited Ms X to request a review of her complaint at Stage 2 if she remained unhappy with the Council’s response.
22. Ms X told the Council she disagreed with the figures quoted in its letter because she believed it included the court summons fee in its calculations. She said she made several payments since August 2019 which the Council had not noted, and she sent bank statements to support her comments.
23. Ms X also provided copies of two council tax bills she received from the Council in two consecutive days in October 2019. One showed she owed nothing for 2017/18, £47.70 for 2018/19 and £640.96 for 2019/20 totalling £688.66. The other showed she owed £112.70 for 2017/18, £155 for 2018/19 and £420.96 for 2019/20 totalling £686.66. Ms X believed the balance due was £420.96.
24. The Council advised Ms X that several payments she made were returned and the outstanding balance was now £686.66. Ms X disputed this and asked the Council to confirm the returned payments. The Council confirmed three payments between September 2018 and December 2018 were returned unpaid and escalated Ms X’s complaint to Stage 2 of its complaints’ process. Ms X received a letter detailing the outstanding payments due on her account, but she continued to disagree with the Council’s calculations and payment arrangement figures.
25. In November 2019, the Council wrote to Ms X at Stage 2, stating it had called and sent letters to her employer regarding the attachment of earnings order, but her employer failed to make the required payment until October 2019. The Council told Ms X, “The reason there is a difference between what you believe the debt to be £420.96 and the debt we are reclaiming £640.96 is that this includes a housing benefit overpayment which you have been written to separately about.”
    The Council apologised for unclear communication, for not confirming it had removed charges from the arrears and for incorrectly allocating £100 to the wrong financial year.
26. The Council offered a further apology for issuing a court summons but clarified it was issued for the total outstanding debt on the account. The Council acknowledged it could have been clearer in its correspondence but maintained it was asking her to pay the balance she owed. Ms X has since cleared the debt.

Findings

27. The evidence shows the Council pursued Ms X for non-payment of council tax almost a year after attempting to contact her employer. After receiving requests for payment, Ms X contacted the Council and provided evidence indicating the issue lay with her employers. After the Council received Ms X’s wage slips it contacted her employers and collected the due payments. Had the Council sent Ms X the notice of liability order sooner, it is likely this matter would have been concluded earlier. I stop short of attributing fault to the Council and I cannot see that Ms X has suffered a direct injustice because of this part of her complaint.
28. I am satisfied the payments Ms X made were allocated to her debt. However, the Council quoted several different figures to Ms X when she asked for confirmation of the arrears on her account. It failed to clearly explain what she owed. It provided bills which showed different amounts owed against different council tax years. The failure to clearly explain to Ms X what she owed is fault and caused Ms X confusion and frustration.
29. The Council then told Ms X in its stage two response that it included a housing benefit overpayment in the outstanding council tax arrears. This was inaccurate and not in line with the law or Council policy. This is fault. This caused Ms X further confusion and contributed to the breakdown of trust between her and the Council.
30. Where payments are made which are different from the instalment schedule set out on the bill, the Council’s system will automatically credit the payment to any arrears on the account. This is not fault. When Ms X paid £100 towards her council tax in April 2019 the Council’s system allocated this to the previous year’s council tax. The Council accepted this payment was meant for the current year’s council tax and moved the payment. This was appropriate.

Agreed action

31. Within one month of the date of my decision, the Council has agreed to pay Ms X £100 in recognition of the stress and uncertainty caused by the faults in the way it handled Ms X’s council tax debt.
32. Within two months the Council has agreed to review its procedures to ensure it takes action against employers where an attachment of earnings order is not complied with.

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Final decision

33. There was fault in the way the Council managed Ms X’s complaint about its handling of her Council tax arrears. I have made recommendations for how the Council should remedy this and the Council has agreed to them. I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman