London Borough of Harrow (20 004 760)

Category : Benefits and tax > Council tax

Decision : Upheld

Decision date : 30 Nov 2020

The Ombudsman's final decision:

Summary: Mr B complained about the way the Council dealt with the recovery of his council tax arrears. The Council agreed it was at fault for not responding to Mr B’s proposal for a repayment plan. However, the Council’s apology and removal of the summons costs are an adequate remedy. In addition, the Ombudsman found no evidence of any fault in the Council’s enforcement action.

The complaint

  1. The complainant, whom I shall refer to as Mr B, complains about the way the Council dealt with his council tax arrears. He says he had proposed a payment plan and told the Council he would pay his council tax arrears. Therefore, it should not have taken court action and instructed its enforcement agents to recover the arrears.
  2. As a result, Mr B says he experienced stress and enforcement costs.

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The Ombudsman’s role and powers

  1. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
  2. We cannot investigate a complaint about the start of court action or what happened in court. (Local Government Act 1974, Schedule 5/5A, paragraph 1/3, as amended)
  3. 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

  1. I considered Mr B’s complaint and the information he provided. I have considered the Council’s responses to the complaint.
  2. I sent a draft decision to both parties to enable them to comment before I took a final decision.

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What I found

Legal Background

  1. The Local Government Finance Act 1992 gives local authorities the power to levy and collect a dwelling tax. This is known as council tax. The main legislation concerned with the collection and recovery of council tax is the Council Tax (Administration and Enforcement) Regulations 1992 (as amended).
  2. Before a council can pursue someone for council tax it must send a demand. If a taxpayer misses a payment, a council must issue at least one reminder notice before issuing a summons for a liability order in the magistrates’ court. They can then seek to recover payment of the sum in the liability order by various means.
  3. Councils can also agree a special payment arrangement outside the normal instalment scheme if they consider it is appropriate to do so. This is discretionary and councils are not obliged to do so.
  4. A liability order gives a council legal powers to take enforcement action to collect the money owed. The council can add the costs of obtaining the order to the person’s debt.
  5. If someone does not pay the council tax, and the costs, the council can ask bailiffs (also referred to as enforcement agents) to collect the debt. Bailiffs charge fees which also must be paid.

What happened

  1. Mr B was liable to pay council tax for his address for the tax year 2019-2020. In March 2019 the Council issued Mr B his annual council tax charges. This explained the amount he had to pay over 10 monthly instalments.
  2. The Council did not receive payment from Mr B for his first instalment, and so it issued a reminder notice to Mr B.
  3. Mr B contacted the Council and said he was waiting for his council tax support appeal. He also said he had a direct debit set up, but he did not have enough money on his account to pay the instalment. The Council told Mr B he was required to make payments for council tax during his appeal. But it agreed to put his council tax account on hold for 28 days.
  4. The Council then issued Mr B a revised council tax bill due to a benefit adjustment. But it said it received no payments from Mr B.
  5. Three months later, the Council issued a further revised council tax bill due to another benefit adjustment for Mr B.
  6. Mr B sent a letter to the Council asking for his payment plan to be extended until March 2020. But he did not receive a response from the Council.
  7. Six weeks later, the Council sent Mr B another reminder notice, as it had still not received his council tax payments. Then a month later, the Council sent Mr B a court summons.
  8. Mr B said he then wrote the Council and promised them he would pay.
  9. The Council obtained a liability order in the Magistrate’s Court in respect of Mr B unpaid council tax. Mr B attended the Court and agreed with the Council to discuss repayment options the following day. But no repayment plan was agreed.
  10. The Council said Mr B refused to set up any arrangement to repay the debt and that he would dispute the debt. Mr B said the Council asked if he was willing to pay and showed no sympathy. Mr B complained to the Council about the summons costs.
  11. In response the Council said it had followed legislation and refused to remove the costs.
  12. The Council passed Mr B’s debt on to its enforcement agents for recovery and a £75 compliance fee was added to his debt. Mr B complained to the Council. He said he had been willing to pay but it had failed to respond to his earlier request for a payment plan until March 2020. He asked for the summons costs and compliance fee to be removed from his debt.
  13. In response the Council apologised for not actioning Mr B’s request for a payment plan. But it refused to remove the costs because it had sent subsequent bills and reminders to Mr B and no payments had been received. It also explained why the debt was passed on to its enforcement agents. Mr B was not satisfied with the response and escalated his complaint with the Council.
  14. The Council considered Mr B’s complaint again but did not change its view. It said it had followed the law. However, because it had not responded to Mr B’s earlier request for a payment plan, it said as a gesture of goodwill it would remove the summons costs.
  15. Mr B remained unhappy about the compliance fee and asked the enforcement agents to refund the fee he paid. But they refused and informed Mr B he should resolve the matter with the Council.

Analysis

Payment plan

  1. The information provided shows Mr B did not regularly pay his council tax and so arrears accumulated over the year. Councils have a duty to collect council tax from residents and there is legislation setting out the process that must be followed. The Council sent Mr B his annual council tax charges and readjusted bills. It also sent three reminder notices for his unpaid council tax. These show Mr B was aware of the payments due and the Council was intending to take the matter to court.
  2. I acknowledge Mr B asked the Council for a payment plan two month before it started court action. The Council did not have to agree to his request, but it accepted it was at fault for not providing a response. It apologised to Mr B and removed the summons costs. I consider this a suitable remedy for the Council’s fault on this matter.

Court summons and compliance fee

  1. Mr B said he would not have had the court summons if the Council had responded to his repayment request. He attended the court hearing, which was his opportunity to challenge to validity of the Council’s action. However, the Court did not find fault by the Council and issued a Liability Order. The law says we cannot investigate complaints about the start of a court action or what happened in court. I can therefore not consider this matter further.
  2. Mr B spoke to the Council after the Liability Order was issued, but no repayment arrangement was agreed. The Liability Order allows the Council to start enforcement action, and so the Council is not at fault for passing Mr B’s debt to its enforcement agents. In addition, the Taking Control of Goods (Fees) Regulations 2014 allows enforcement agents to charge a compliance fee of £75. The amount charged by the agents is therefore correct. As I have found no fault by the Council on this matter, I have completed my investigation.

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Final decision

  1. I have completed my investigation with a finding of fault causing injustice.

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Investigator's decision on behalf of the Ombudsman

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