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Tameside Metropolitan Borough Council (20 013 789)

Category : Benefits and tax > Council tax

Decision : Upheld

Decision date : 30 Nov 2021

The Ombudsman's final decision:

Summary: the Council has already provided a satisfactory remedy for injustice caused by its fault in responding to Miss X’s enquiries about disputed arrears on her Council Tax account.

The complaint

  1. Miss X complained that the Council has not properly accounted for all the payments she made to her Council Tax account and given her sufficient information to explain how it calculated the arrears she owes. She disputes the statement in the Council’s final response to her complaint that she owed £826.86 arrears.
  2. Miss X believes some of the payments she made were not allocated to her Council Tax account, or were allocated to the wrong year, which caused her to get into further debt. The Council issued a summons, applied for a Liability Order and passed her account to civil enforcement agents which resulted in extra costs being added to her account.

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What I have investigated

  1. Miss X complained to us in March 2021. Our investigation is therefore limited to the administration of the Council Tax account to the end of the 2020/21 Council Tax year. We did not investigate the administration of the account in the current 2021/22 Council Tax year.

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The Ombudsman’s role and powers

  1. 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)
  2. 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 have spoken to Miss X and considered all the information she sent me. I considered the Council’s response to my enquiries and supporting evidence from the Council Tax records.
  2. Miss X and the Council had an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

Relevant law and the Council’s policy and practice

  1. The Council Tax (Administration and Enforcement) Regulations 1992 set out how councils collect payments of council tax and recover council tax debt.
  2. The Council Tax year runs from 1 April to 31 March. Payment is usually collected through monthly instalments. If the taxpayer misses an instalment, the council sends a reminder notice. If a payment is not then made within seven days, or further instalments are missed, a final reminder is issued and the right to pay in instalments is lost. The entire balance for the year is then due.
  3. Councils have a range of powers to recover unpaid council tax. A council must first issue a summons to the taxpayer and then apply to the Magistrates Court for a liability order.
  4. A liability order gives councils the power to take enforcement action to collect the money owed. This may be by deductions from the taxpayer’s benefits, an attachment of earnings order (when an employer takes deductions directly from earnings and passes it to the Council) or using civil enforcement agents (formerly known as bailiffs). The Council can decide which recovery method to use provided it only uses one method for one liability order at a time.
  5. In exceptional circumstances, councils may write off some, or all, of a council tax debt by using discretionary powers under S13A(1)(c) of the Local Government Finance Act 1992 (as amended). Tameside MBC refers to this as a Hardship Payment. This is intended to be a short-term award made in exceptional circumstances to relieve financial hardship for taxpayers who are entitled to Council Tax Support (a means-tested reduction to Council Tax for people on low incomes).
  6. In common with other councils, the Council’s process for allocating Council Tax payments is automated due to the large volume of transactions. The Council’s website explains Council Tax must be paid in accordance with the payment instalments on the Council Tax bill or payment arrangement letter. It says it may send a reminder letter, final notice or summons if the exact amount due is not paid. It also explains that payments will automatically be credited to the oldest year’s debt if the payment does not exactly match the amount due under the instalment.

What happened

  1. Miss X moved to her current address in July 2013. She is liable to pay Council Tax and is entitled to the 25% Single Person Discount reduction. She was entitled to some Council Tax Support until 2016/17. The Council has issued a summons for unpaid Council Tax every year since 2014.
  2. Miss X complained to us in March 2021. I have focused on events since she started to dispute the arrears on her account in late 2019.
  3. In November 2019 Miss X received a statement of her Council Tax account. She could not reconcile the Council’s statement with her own records of payments she had made.
  4. In December 2019 Miss X sent bank statements to the Council Tax service so it could cross-reference the transactions on the statements with its records. She also provided some wage slips showing deductions made under an Attachment of Earnings Order. Miss X’s table of payments shows £1,120.95 was collected under the Attachment of Earnings Order between November 2017 and May 2018. The Council’s records show some of these payments were allocated to clear outstanding debts from previous years and some were credited to the 2017/18 year.
  5. In mid-January 2020 an officer wrote to confirm he had reviewed all this evidence. He had checked the bank statements and confirmed the Council had received all the listed payments. The Council’s records showed it had collected £1,120.95 under an Attachment of Earnings Order which tallied with Miss X’s records. The outstanding Council Tax balance then was £1833.70.
  6. The Council’s records note that Miss X spoke to an officer in the Council Tax team in late January 2020 and made further contact in February to say she was still confused by the outstanding balances on her account.
  7. In mid-February 2020 the Council Tax team agreed to transfer payments Miss X had made in 2019/20, which she had intended to go towards that year’s bill but were allocated to clear debts from previous years, to the 2019/20 tax year.
  8. In late April 2020 Miss X made a payment of £136.27. This did not match the £101.54 due under the monthly instalment plan for 2020/21 so it was allocated to reduce outstanding arrears from 2015/16 instead. Miss X did not pay the next instalments due in May, June and July 2020.
  9. In late July 2020 Miss X sent an email to the Council Tax team querying the balance on her account. She said she would start paying the current year’s instalments from 31 July.
  10. In early August 2020 the Council sent Miss X a reminder notice because she had not paid all the instalments due for 2020/21 by then.
  11. Miss X contacted the Council Tax service in mid-August to query the balances again and request a statement of her account.

Summons for non-payment – September 2020

  1. In early September 2020 Miss X received a summons for Council Tax owed for 2020/21. The Council obtained a Liability Order at the end of that month.
  2. In late November 2020 Miss X complained to the Council. She challenged the accuracy of the arrears on her account. She asked the Council to review the outstanding balances, and check the payments she had made, for every Council Tax year since 2015/16. She said she wanted the Council to:
    • cancel the summons issued in August 2020;
    • transfer payments she had made to clear the outstanding balance for the 2019/20 year;
    • provide a statement of account which she could then check against her records and go through with an officer.
  3. The Council put a hold on enforcement action while it considered her complaint.

The Council’s response to Miss X’s complaint

  1. In late December 2020 the Council replied to Miss X’s complaint. It attached a statement of account showing the Council Tax due, payments received and the outstanding balances for each year since 2013/14.
  2. At this point the Council also cancelled the summons issued in early September 2020. It recalled the account from the civil enforcement agents.
  3. Miss X says it was only when she received the December 2020 statement that she found out there were outstanding arrears from 2013/14 and 2014/15. She says these arrears balances were not shown on her online Council Tax account.
  4. In response to my enquiries, the Council said Miss X had been liable for Council Tax at this property from 8 July 2013 but did not make the first payment until 19 May 2014. So there was a Council Tax debt for 2013/14. It sent a table and computer screenshots which log all the correspondence sent to Miss X in 2013/14. This included several Council Tax bills, reminder notices and letters about arrangements to pay.
  5. The manager who replied to Miss X’s Stage One complaint said she would ask the Cashier Service to try to trace some payments Miss X made with a debit card between March and October 2014. Miss X’s bank statement shows she made four debit card payments to the Council in this period. The bank statement confirms the Council was the recipient but does not identify the purpose of the payments.
  6. Ms X said the Council failed to account for these debit card payments. The Council noted one payment was made before Miss X moved to her current address and another was not made to the Council. The Council’s Cashiers Service could not trace four other debit card payments Miss X made to the Council. The bank statement does not identify whether these were Council Tax payments. The Council noted that Miss X did not use a debit card to make subsequent Council Tax payments.
  7. The Council said that, due to a technical issue, Miss X could not view the balances for 2013/14 on her online account. However its correspondence log shows it sent reminder notices to her in 2013 and 2014 so it did inform her about the arrears at the time. It went on to obtain a summons in 2014. There is now a nil balance for 2013/14 because some Council Tax payments Miss X made in subsequent years were allocated to clear this old debt.

Summons for non-payment- January 2021

  1. In early January 2021 Miss X received another summons. It said she owed £944.51 for the 2020/21 year and 2019/20 year.
  2. In mid-January 2021 Miss X asked for her complaint to be investigated at the second stage of the Council’s complaints procedure.
  3. The Council sent its final response at the beginning of March 2021. It awarded a Hardship Payment of £913.59 which cleared the full Council Tax due for 2020/21. It explained that it had allocated the payments Miss X had already made in 2020/21 to clear Council Tax debts from previous years.
  4. The Council identified some faults in the way it had handled Miss X’s case:
    • It failed to send her a statement of account when she first requested one in August 2020;
    • It issued a summons in January 2021 while she was still disputing the arrears and the amount she owed.
  5. The Council withdrew the second summons, cancelled the £86 costs added to her account and recalled Miss X’s account from the civil enforcement agents. Following these adjustments, it said the outstanding debt was £826.86.
  6. The Council suggested Miss X could repay £50 per month in addition to paying Council Tax instalments due for 2021/22. It asked Miss X to complete and return an income and expenditure form if she did not consider this was affordable.
  7. Miss X then complained to us. She said she appreciated the Hardship Payment but she still could not reconcile her payment records with the figures the Council set out in its final response to her complaint. By her reckoning, the outstanding debt should be £684.17 not £826.86.
  8. She also queried how the Council had reallocated the total payments of £812.08 she made in 2020/21. In response to our enquiries, the Council provided a table showing it received payments of £846.84 in total from Miss X in 2020/21. These were allocated to clear debts from the 2015/16 and 2016/17 years.

My analysis

  1. The Council’s evidence shows Miss X built up Council Tax arrears in 2013/14 and it wrote to her about this debt at the time. I have seen no evidence that she queried the missing debit card payments at the time or when the Council issued a summons for this debt in January 2015. The Council’s correspondence log does not support Miss X’s statement that she was first informed of this debt in 2020 after she challenged the arrears and received the statement of account.
  2. The Council has seen the relevant 2014 bank statement but it has not been able to trace the debit card payments Miss X made to the Council between March and October 2014. The bank statement certainly shows Miss X made payments to the Council then but it does not prove these were Council Tax payments. These payments may largely account for the discrepancy of £142.71 between Miss X’s calculation of the arrears she owes and the Council’s figures. Miss X may wish to contact her bank to get further details about these transactions to assist the Council in tracing these payments.
  3. Miss X had an arrears balance at the end of each subsequent Council Tax year. I understand she wanted to make a fresh start and ensure Council Tax payments made in 2019/20 and 2020/21 were credited to those years. She wanted to stop the cycle of getting into further debt every year and incurring more costs. But it was not fault for the Council to allocate payments that did not exactly match the amounts due in the monthly instalments to clear debts from previous years. In these circumstances, the automated system allocates payments to the oldest debt first. The Council agreed to reallocate the payments Miss X made in 2019/20 to that year’s account when she requested that.
  4. The Council has provided evidence showing how it allocated the payments it received under the Attachment of Earnings Order. Its figure for the total amount collected under the Order tallies with Miss X’s figure.
  5. The Council withdrew the summons it issued while Miss X was still disputing the arrears. It also cancelled the costs and recalled the account from the civil enforcement agents. That provided a satisfactory remedy for its fault in failing to send her the statement of account promptly and issuing a summons when she was still disputing the arrears. The Hardship Payment awarded also had the effect of reducing Miss X’s overall debt.

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Final decision

  1. I have completed the investigation and found that the Council has already provided a satisfactory remedy for the injustice caused to Miss X by its fault in failing to act promptly on her request for a statement of her account and issuing a summons in September 2020. I therefore make no further recommendations.

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Investigator's decision on behalf of the Ombudsman

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