The Ombudsman's final decision
Summary: Ms X complains about the Council’s handling of her council tax account since 2020 and the recovery action it has undertaken causing distress. We found no evidence of fault by the Council. The Council has taken and offered suitable action to Ms X to help her resolve her concerns about her council tax account so we have completed our investigation.
The complaint
I have called the complainant Ms X. She complains there were failings in the way the Council dealt with her council tax account from 2020. This resulted in the Council wrongly taking recovery action against her and gaining a summons for outstanding council tax Ms X says she had paid. Ms X says she has been caused distress and anxiety. And has been put to time and trouble in pursuing the matter with the Council.
The Ombudsman’s role and powers
The Ombudsman investigates complaints about ‘maladministration’ and ‘service failure’, which we call ‘fault’. We must also consider whether any fault has had an adverse impact on the person making the complaint, which we call ‘injustice’. We provide a free service but must use public money carefully. We do not start or may decide not to continue with an investigation if we decide: there is not enough evidence of fault to justify investigating, or any fault has not caused injustice to the person who complained, or any injustice is not significant enough to justify our involvement, or we could not add to any previous investigation by the organisation, or further investigation would not lead to a different outcome.
(Local Government Act 1974, section 24A(6)) 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)
How I considered this complaint
I have read the papers submitted by Ms X and spoken to her about the complaint. I considered the Council’s comments about the complaint and the supporting documents it provided. I have spoken to a Council finance officer about Ms X’s council tax account.
Ms X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.
What I found
Council tax recovery 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. The Tribunals, Courts and Enforcement Act 2007 and associated regulations cover the way bailiffs may recover debts.
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).
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.
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.
Key events leading to the complaint Council tax 01 April 2020 to 31 March 2021 The Council issued Ms X with a council tax bill of £1,334.78 in March 2020 for 2020/21 to be paid in 10 monthly instalments. The first payment of £137.78 was due on 20 April 2020 via direct debit, followed by nine payments of £133 on the 20th of every month after that.
The Council received the first payment of £137.78 from Ms X via direct debit on 20 April 2020. But Ms X then cancelled the direct debit. The Council sent Ms X an adjustment notice on 23 April 2020. This confirmed a balance of £1197 now payable in 10 monthly instalments. Ms X was to make the first payment of £117 on 1 June 2020 followed by nine further payments of £120 due on the first of every month after that. The Council received eight payments from Ms X between May 2020 and March 2021. But Ms X did not pay in September and October 2020. So, the Council recorded Ms X had an outstanding balance of £240 for council tax year 2020/21 and sent a reminder notice for the amount.
The Council agreed a payment arrangement of three instalments with Ms X for the outstanding balance. Ms X was to make a first payment of £80 on 1 May 2021 followed by two further payments of £80 on 1 June and 1 July 2021. Ms X paid £80 in May 2021 reducing the balance to £160 but made no further payments.
The Council issued a second reminder notice in June 2021 for £160 as Ms X had not made any further payments for 2020/21. The Council issued a final notice for £160 in November 2021.
Council tax 01 April 2021 to 31 March 2022 In March 2021 the Council issued Ms X with a council tax bill of £1414.75 for the year 2021/22 to be paid in 10 monthly instalments. The first payment was due on 1 April 2021 for £145.75 followed by nine payments of £141 on the 1st of every month after that.
Ms X paid £145.75 on 7 April 2021.The Council issued Ms X with a reminder notice in May 2021 as Ms X did not pay on 1 May 2021. Ms X paid £141 at the end of May 2021.
The Council issued Ms X with a second reminder notice for June 2021 as Ms X did not pay an instalment on 1 June 2021. Ms X paid in June 2021 through to January 2022. This included a payment of £80 in June and £80 in December 2021. The Council recorded Ms X had an outstanding balance of £136.25 for the financial year 2021/22 and sent a final notice in November 2021.
Ms X’s complaint to the Council In January 2022 Ms X received a summons from the Council for outstanding council tax. This was £291.50 for 2020/21 and £408.75 for 2021/22 with a balance of £637.75 including summons costs. Ms X complained to the Council in January 2022 about the summons. Ms X said there were no outstanding payments for 2020/21 and she had paid the balance owed for that year in full. Ms X told the Council she was in the process of clearing the balance owed for 2021/22 as agreed.
The Council gained a liability order from the courts in February 2022 for outstanding council tax. The amounts were £291.50 for 2020/21 including liability order costs and £136.25 for 2021/22.
The Council responded to Ms X’s complaint in April 2022. It explained the charges and payments made for 2020/21 and 2021/22 and provided a statement of account. The Council noted Ms X made two £80 payments and asked if they were intended to clear the outstanding balance from 2020/21. If so, it could transfer the payments and withdraw the summons issued in January 2022.
The Council said if it transferred the payments to Ms X’s outstanding balance for 2020/21 it would increase the amount owed for 2021/22 by £160 to £432.50. The Council said Ms X would need to arrange to clear this outstanding balance. It advised Ms X these payments would be on top of the new council tax bill issued on 1 April 2022 for the council tax year 2022/23. The Council’s records show there appeared to be no response from Ms X, so it did not transfer the balance. The Council comments this was also as Ms X did not pay her instalments on the specific dates. So, any payments made on other dates would be transferred into the current financial years balance.
Ms X confirmed she paid £80 in May, June, and December 2021 to clear the outstanding balance of £240 for 2020/21. Ms X complained that because of this the Council wrongly obtained the summons in January 2022 for a balance she cleared in December 2021. Ms X claimed the Council’s demands for council tax mistakenly showed the outstanding amount due. The Council comments it correctly issued the summons as Ms X did not ask to transfer the balance and her payments were late.
Ms X queried with the Council why payments she made of £80 on 4 May 2021, £141 on 21 May 2021 and £141 on 16 June 2021 were not showing on the Council’s records. Ms X asked the Council where the payments had gone and why they were not credited to her account for 2021/22. These would reduce her outstanding balance to £136.25 for that year.
Ms X asked the Council to send her an updated council tax bill for 2022/23 with a balance of £1475.77. Ms X asked to be able to pay the balance spread over 12 months from April 2022 with a direct debit to be set up. Ms X also asked to be able to pay the £136.25 by the end of April 2022 which would clear the outstanding balance for 2021/22. The Council accepts that although it agreed to allow Ms X to make payments over 12 months then it was not set up due to an administrative error.
Council tax 2022/2023 The Council issued Ms X with a council tax bill in March 2022 for £1475.77 for 2022/23. It required Ms X to pay £143.77 in April 2022 and then nine payments of £148 on the first of each month. The Council recorded Ms X making payments between April and August 2022 leaving a balance of £959.27 outstanding. The Council issued Ms X with a reminder notice in June 2022.
The Council issued Ms X with a liability order and notice of further action in June 2022. The order said Ms X had not paid council tax for 2022 totalling £535.50 and incurred costs of £104. The order said Ms X owed a balance of £400.25 payable in full in July 2022 otherwise it would take further recovery action including bailiff action.
Summons July 2022 and recent events The Council issued Ms X with a summons for non-payment of council tax in July 2022 for 2022/23. The amount owed was £1168.27 including costs of £87 for the summons.
The Council referred the recovery action to enforcement agents which added more costs. The recovery action also included the outstanding amounts Ms X owed for 2020/21 and 2021/22. The Council agreed to withdraw the costs of the summons in August 2022 and recalled Ms X’s case from the enforcement agents. The Council comments it did this as a gesture of goodwill because Ms X was making payments although they were late.
The Council agreed a council tax arrangement with Ms X to pay £137 each month from September 2022 to March 2023 to enable her to clear the outstanding balance for 2022/23. The Council also agreed an arrangement with Ms X to pay the amounts she owed of £160 from 2020/21 and £136.25 from 2021/22. The Council confirms Ms X has been paying £137.25 for 2022/23 but has not made payments towards the other outstanding amounts.
The Council issued Ms X with further recovery action in October 2022. This was because Ms X defaulted on the arrangements made to pay the outstanding balances for 2020/21 and 2021/22.
The Council comments that although Ms X has been making payments for her council tax, they are often paid on the wrong date. And she has not properly specified which account it is to go to. This means the Council places the payments in a suspense account. The payments are then transferred to the current year’s council tax account which may explain why Ms X was unclear where her payments have been credited to. The Council confirms it has allocated all Ms X’s payments to a council tax account for her.
The Council accepts it could have advised Ms X her payments were going into a suspense account and to correct the details she was using. To resolve the situation, it is willing to arrange for Ms X to speak to a finance officer to discuss her account and any queries Ms X may have about her payments.
The Council has also agreed to place the current recovery action from October 2022 on hold until the end of November 2022 to give Ms X an opportunity to resolve matters about her payments. The Council is willing to set a different payment date for her to ensure she can pay the amounts on time, and it try to accommodate this. The Council suggests the issue may also be that Ms X’s bank is sending her payments later than she has specified.
The Council notes Ms X has not claimed an energy rebate towards her council tax which she is entitled to so the officer may be able to help her with this.
My assessment
The documents I have seen show the Council issued reminder notices and final notices to Ms X when she has missed payments according to the regulations. So, there is no evidence of fault by the Council. The Council confirms it has taken recovery action against her correctly as amounts remain outstanding.
The Council accepts it agreed to Ms X’s request in April 2022 to pay her instalments over 12 months. But it did not set this up due to an administrative error. It is unfortunate the Council did not take the action it agreed. But I cannot say if it would have made a difference to Ms X’s payments and the outstanding amounts owed. This is because Ms X has not been paying the outstanding amounts on the due dates.
The Council recognises it could have advised Ms X sooner her payments were going into the suspense account and to correct the details she was using. In recognition of this the Council has placed its recent recovery action on hold to enable Ms X to resolve the issues she is having with her account directly with a finance officer. The officer can discuss Ms X’s queries about her account, help Ms X set up suitable payment dates for her instalments and to claim any benefit she may be entitled to. This is suitable action for the Council to take to try and resolve Ms X’s concerns. I do not consider I can achieve anything further for Ms X or a different outcome through further investigation.
Final decision
I am completing my investigation. There is no evidence of fault in the way the Council has dealt with Ms X’s council tax account. It has taken and offered suitable action to help Ms X resolve her concerns about her council tax account.
Investigator's decision on behalf of the Ombudsman