Summary: Ms X complains the Council has not dealt properly with her Council Tax and Council Tax Support. The Council was at fault because it did not clearly explain how a payment would be applied to her Council Tax bill. Ms X suffered avoidable distress. The Council should apologise, pay Ms X £100 and review its processes.

The complaint

1. The complainant, whom I shall refer to as Ms X, Council Tax and Council Tax Support properly because it:

• Hasn’t provided a full reconciliation of payments, credits and liabilities for Council Tax periods 2021-22 and 2022-23;
• Has not correctly addressed her eligibility for Council Tax Support;
• Has not charged her Council Tax correctly;
• Misapplied money she paid in July 2022 to the wrong CT year;
• Has wrongly taken enforcement action in respect of her Council Tax account for 2020/21 because it didn’t take account of 5 amounts paid on 29.7.21;
• Has wrongly taken enforcement action in respect of her Council Tax account for 2021/22 because it didn’t take account of an amount paid on 14.7.22;
• Has wrongly taken enforcement action in respect of her Council Tax account for 2022/23 as a result of its failure to administer her Council Tax account in previous years; and
• Hasn’t investigated her complaint properly.

2. Ms X says this has caused avoidable distress, she had incurred financial loss and she remains uncertain of her real Council Tax liability.

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The Ombudsman’s role and powers

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)
4. Our role is not to ask whether an organisation could have done things better, or whether we agree or disagree with what it did. Instead, we look at whether there was fault in how it made its decisions. If we decide there was no fault in how it did so, we cannot ask whether it should have made a particular decision or say it should have reached a different outcome.

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How I considered this complaint

5. I spoke to Ms X about his complaint and considered documents he provided. I made enquiries of the Council and considered its response and the supporting documents it provided.
6. Ms X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

What happened?

7. This is a brief chronology of key events. It does not contain everything I reviewed during my investigation.
8. Ms X Paid Council Tax and received Council Tax Support for the years 2021/2022 and 2022/23.
9. Ms X had an outstanding balance on her Council Tax account for the year 2020/2021 and accrued arrears for the year 2021/2022.
10. The Council took action to recover some of the outstanding amount.
11. Ms X paid the amount demanded. The Council allocated part of this payment to the debt from 2020/2021.
12. The Council engaged enforcement agents to collect Ms X’s outstanding Council Tax debt.
13. Ms X complained to the Council about her Council Tax and Council Tax support.

Analysis

14. I have seen and reviewed:
• Letters from the Council to Ms X explaining her Council Tax Support entitlement for Council Tax years 2020/2021, 2021/2022 and 2022/2023.
• Letters and document sent from the Council to Ms X detailing the Council Tax Support payments she was eligible to receive.
• Explanations of her Council Tax liability and Council Tax Support sent from the Council to Ms X in January 2022, May 2022 and November 2022.
15. The Council recalled Ms X’s account from the enforcement agents and all charges were waived. As a result, Ms X did not suffer any financial injustice and I will not investigate matters relating to enforcement agents further.
16. The Council has set out a full explanation of Ms X’s Council Tax account for the years 2021/2022 and 2022/2023 in the correspondence referred to in paragraph 14. This is not fault by the Council.
17. There is no evidence of errors in the way the Council calculated Ms X’s entitlement to Council Tax Support. This is not fault by the Council.
18. There is no evidence of fault in the way the Council has charged Ms X Council Tax. This is not fault by the Council.
19. The Council says it is not necessarily fault to apply payments first to debts outstanding from previous years first. The Council is correct. However, in its enquiry response to the Ombudsman, the Council says its system, “automatically prioritises the oldest debt, unless we are instructed otherwise, although if they ask to pay the most recent debts the older ones will still remain in recovery.”
20. The Council clarified that its systems automatically look to allocate any amount paid to the current year. In this case Ms X made two payments on the same day of £360.19 and £139.34 which added up to the summons amount of £499.53. The Council’s system seeks to match each payment individually with an amount due.  Because the amounts paid did not specifically match the instalment amounts due, against the current financial year, no match could be found.  As a result the Council says its system then automatically looked at debts from previous financial years and in this case found amounts outstanding for 2020/21 and 2021/22. It also says that these earlier debts would have been referred to enforcement agents and would have incurred a cost of £75.00 for a Compliance Letter being issued, and potentially a further Fee of £235.00 for enforcement action. The Council says its system prioritised the earlier debts, as not paying them would have incurred higher costs for the customer.
21. Ms X received a request for payment of £499.53 in 2022. She paid the exact sum requested, in two parts, just before the deadline for court action. There is no evidence the Council informed Ms X about how it would apply any payment in relation to her Council Tax, or that she was able to request that her payment satisfied a specific liability. This is fault by the Council. The total amount and timing of Ms X’s payments made it clear that this was made in relation to the specific liability that court action had been raised regarding. The Council should have applied it against that specific liability.
22. This would not have had any impact on the overall amount owed by Ms X, but it would have meant Ms X owed the Council an outstanding amount from the previous year instead. The Council would not have obtained a liability order against Ms X and enforcement agents (although later recalled), would not have been instructed in respect of that particular liability. It should then have chosen to take action to collect that outstanding liability in the appropriate way. Ms X suffered avoidable distress as a result.
23. The Council responded to Ms X’s complaint informally by letter in November 2022. Ms X responded to the Council in January and it sent her a stage one complaint response in February. Ms X complained further and the Council sent a stage two response in February.
24. The Council followed its complaints policy, but it agreed in its stage two complaint response that Ms X had been wrongly told her initial complaint was being dealt with stage one when in reality the Council was responding informally to her concerns. This is fault by the Council. Ms X did not clearly understand how the Council was dealing with her complaint properly. The Council has apologised for this. I consider this an appropriate remedy.
25. The Council says it will be updating its website to help customers understand how payments will be applied where recovery action is being taken.  If there are debts for multiple financial years and a payment is made which does not match the “in year” instalments, that payment will be allocated to the earliest outstanding debt as prioritised by the system.  It will also advise that instalments should be made as one single payment and if debtors need to make multiple payments they will be encouraged to contact the Council.

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Agreed action

26. To remedy the outstanding injustice caused by the fault I have identified, the Council has agreed to take the following action within 4 weeks of this decision:
• Apologise to Ms X for not clearly explaining how her payment would be applied to her bill;
• Pay Ms X £100 in respect of avoidable distress; and
• Review its processes to ensure that where the Council takes action to collect outstanding Council Tax and there is also a pre-existing liability, it clearly and transparently explains to debtors how it will apply any payments made and the consequences to them of this.
27. The Council should provide us with evidence it has complied with the above actions.

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Final decision

28. The Council was at fault, which caused Ms X injustice. I have now completed my investigation.

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Investigator's decision on behalf of the Ombudsman