Summary: Mr X complained the Council is pursuing him for a historic council tax debt he believes he does not owe. The Council was at fault because it delayed pursuing Mr X’s council tax debt for a significant period of time and now Mr X is not able to challenge it. The Council has agreed to write off the debt and any associated costs and apologise to Mr X for the anxiety and distress the matter has caused him. The Council will also review its approach to historic council tax debt. This will include reminding staff they must consider whether it is fair and reasonable to pursue debt recovery in individual circumstances.

The complaint

1. Mr X complained the Council is pursuing him for a council tax debt which is 15 years old in relation to a previous property where he resided. Mr X said he had paid all his council tax before he moved out of the property. Mr X said the Council’s actions caused him anxiety and distress. He wants the Council to cancel the debt it believes he owes.

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The Ombudsman’s role and powers

2. 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)
3. If we are satisfied with an organisation’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

4. I spoke with Mr X and considered the information he provided.
5. I considered the information the Council provided.
6. Mr X and the Council had the opportunity to comment on the draft version of this decision. I considered their comments before making a final decision.

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What I found

Council tax

7. Council tax is a tax made on domestic properties. Councils issue one bill to each household. Residents of dwellings, including tenants, are usually liable for council tax from the date they moved into the property.
8. Where a sum of council tax is unpaid, a council may seek an order from the courts known as a liability order. This confirms the amount owed and who is liable to pay it. When a liability order has been made, a council has several options available to pursue the debt. One option is to instruct enforcement agents (bailiffs). Enforcement agents follow a procedure to recover the debt and at each stage of the process, add fees, which are set out in law. (Regulation 45 of the Council Tax (Administration and Enforcement) Regulations 1992).

Recovery of council tax debt

9. The Limitation Act 1980 gives a creditor a set amount of time to recover a debt. For unsecured debts, the time limit is six years, from the last time a debtor acknowledged a debt or made a payment. If a creditor does not take court action within that time, the debt becomes statute barred.
10. Case law has clarified there is no time limit for recovery action on council tax debt, once a liability order has been granted, therefore the Limitation Act 1980 does not apply. This allows councils to take recovery action years after a liability order has been granted. Whether it is reasonable to do so is a matter the Ombudsman can consider.

Background

11. Mr X rented a property he lived in. He was liable to pay council tax on the property. In September 2007, Mr X moved out of the property. Mr X said he paid the council tax bill before he moved out of the property.

What happened

12. In January 2021, the Council completed a review of council tax accounts with an outstanding debt and found Mr X had not paid his council tax bill from 2007. As a result, the Council wrote to Mr X later that month to instruct him to clear the debt. It sent the letter to Mr X’s last known address which was the property he had moved out of in 2007.
13. The Council did not receive a response from Mr X and so in January 2022, it handed the account to an enforcement agency and asked it to recover the debt from him.
14. The Enforcement Agency traced Mr X’s recent address details and in March 2022, issued him a notice and asked him to pay the debt within a week.
15. Later in March 2022, Mr X complained to the Council. He said:
• he had paid the council tax bill in relation to the property before he had moved out. He was not able to provide the Council with his bank statements supporting this as his bank did not hold information which was more than six years old;
• when he moved out of the property, he provided his forwarding address to the landlord and estate agent and he also contacted the Council to register his address; and
• the Council had not written to him within the last 15 years in relation to the council tax bill it believed he had not paid.
16. Mr X said the Council’s actions were not fair as he could not properly challenge its view and provide it with proof he had paid his council tax bill.
17. The Council responded to Mr X and said:
• it attempted to contact Mr X on several occasions following the closure of his account in October 2007 and had evidence supporting this;
• Mr X’s landlord and estate agent at the time did not provide the Council with Mr X’s new address details;
• it would have been Mr X’s responsibility to inform the Council he was leaving the property and provide it with his new address. It said it had no record of Mr X contacting the Council; and
• as Mr X did not pay his bill, the Council requested a liability order which the courts granted in December 2007. Following this, the Council wrote to Mr X again to set up a payment plan for the debt.
18. The Council said it had taken appropriate action to recover the debt. It did not uphold Mr X’s complaint.
19. In August 2022, the Enforcement Agency visited Mr X at his address and attempted to recover the debt. Following this, Mr X complained to us.

The Council’s enquiry response

20. In response to our enquiries, the Council said:
• Mr X’s initial debt of the outstanding council tax bill was £197.32. Since the Council’s recovery action, Mr X’s debt increased to £604.32; and
• it was unable to locate Mr X’s new address following the closure of his account. This caused it to delay its recovery action. The Enforcement Agency had used a tracing tool to track Mr X’s current address details.

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Findings

21. The Ombudsman’s view is councils have a right to pursue a debt which is owed to them. The courts establish whether a person is liable to pay the debt. Once the courts have issued a liability order, councils have no limitation of time to recover the debt. However, councils need to consider if it is fair and reasonable to pursue the debt.
22. In this case, the Council is pursuing Mr X for a council tax debt from 2007. The Council said it first attempted to recover the council tax debt from Mr X following the closure of his account in October 2007. It wrote to Mr X and obtained a liability order from the courts that year. However, the Council made no further progress in recovering the debt until 2021. The Council was at fault as this was a significant delay.
23. The Council’s delay in recovering Mr X’s debt means he cannot provide evidence he paid the council tax bill at the time as he claims. This is because so much time has lapsed that his bank no longer holds records of the payments he made. Mr X is therefore at a significant disadvantage as he cannot challenge the Council. Given this, it is not fair and reasonable for the Council to recover the debt. The Council was at fault for continuing to pursue debt recovery.

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Agreed action

24. Within one month of the final decision, the Council has agreed it will:
• write off the debt it believes Mr X owes in relation to his council tax and any associated recovery costs with it; and
• apologise to Mr X for the anxiety and distress the matter has caused him.
25. Within three months of the final decision, the Council will review its approach in relation to pursuing historic council tax debt. This will include ensuring staff are reminded they must consider whether it is fair and reasonable to recover an outstanding debt when a significant amount of time has lapsed since the debt was accrued.
26. The Council will provide us with evidence it has complied with the above actions.

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Final decision

27. I have now completed my investigation. The Council was at fault and has agreed to remedy the injustice caused by the fault identified.

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Investigator's decision on behalf of the Ombudsman