Debt Recovery Guidance for council tax, business rates and sundry debts

Recovery procedures are laid down in statute in The Council Tax (Administration and Enforcement) Regulations 1992 and subsequent amendments.

Our aim is to collect the council tax promptly and efficiently to prevent debt and recovery action escalating.

The council believes that preventing arrears from building up is essential and the additional measures we take are as follows:

• we offer four dates for Direct Debit as we recognise that this is a proven method for ensuring payments are made on time
• we offer a choice of payment options that we advertise on all our bills and recovery documents
• we will make arrangements to encourage and support customers in getting back on track with their payments
• we issue reminders promptly to avoid debts escalating
• we provide up to date advice on our website
• we will work closely with Benefits Team to identify entitlement and make sure any awards in payment are up to date
• we will not refuse any payment which reduces the debt. However, if it is less than the requested amount recovery action may continue
• we will signpost customers to debt advice agencies and promote these on our documents and website (see Section 11)

We will apply to the magistrates' court for Liability Orders, when necessary, to recover the debt. This gives additional recovery powers, including:

• attachments of earnings
• attachment of benefits
• taking control of goods using enforcement agents
• charging orders - where liability order exceeds £1,000
• bankruptcy action where liability order debt exceeds £5,000
• committal action on accounts where the value of the debt and/or behaviour of the customer would deem this action appropriate

Committal to prison is taken when other appropriate remedies have been attempted. This action is not taken lightly and is only used as a last resort. Magistrates will hold a means enquiry in which they will establish whether the failure to pay has been the result of 'wilful refusal' or 'culpable neglect'. They may decide to fix a term of imprisonment and postpone the warrant on certain conditions, normally relating to the payment of the debt over a period of time. The Magistrates also have the power to remit all, or part, of the debt. The maximum sentence is three months.

Recovery process and procedures

The recovery process will be in accordance with Council Tax (Administration & Enforcement) Regulations 1992 and subsequent Regulations & Amendments) When a person liable for council tax has not made the due payments, the Council will take the following actions:

1. reminders

If a statutory instalment is not paid, we send a reminder notice giving seven days to bring the instalments up to date.

If the correct amount on the reminder is paid, within the time limit, but instalments fall behind a second time, we send a second reminder. We may issue a maximum of two reminders on an account in any financial year. Therefore, if a person misses an instalment for a third time in the financial year, or if they do not pay the full amount shown on the first or second reminders within the time limit given, the right to pay by instalments is lost and we send a final notice.

2. final/cancellation notices

If a council tax account is in arrears and the right to pay by instalments has been lost, we send a final notice giving 7 days to pay in full.

3. summons

If the final notice remains unpaid, a minimum of 14 days after it has been issued, a summons will be sent which will include additional costs (an amount agreed by Great Yarmouth Magistrates' Court, which is equal to the costs reasonably incurred, currently £75.00). Any increase in costs needs to be notified to the Great Yarmouth Magistrates Court.

At the hearing, the Council makes an application for a Liability Order to be granted.

4. Liability Order

Magistrates grant a Liability Order if they are satisfied that council tax is overdue for payment. The Order gives the Council the power to take further action if the account remains unpaid.

Up to summons stage, all staff can exercise their discretion by allowing a short period for payments to be brought up to date without progressing to the next stage of recovery. Alternatively, they may re-schedule a payment plan to start or finish later. We may place a short-term hold on the account whilst queries regarding discounts, exemptions or benefits are resolved. Staff will, in most cases, agree ongoing interim payments with the customer during the suspension of recovery.

Unless the Council has made a mistake in issuing the summons, proceedings will only be stopped if the debt and costs are paid in full prior to the court date. At this stage, we will still consider arrangements to pay, but this does not stop the application to the court for a Liability Order. Wherever possible, we will
encourage people in arrears to make part payments to reduce the debt. We also try to obtain employment or benefit details so that when we have a Liability Order, we can consider an attachment of earnings or benefit.

The Magistrates can issue a Liability Order whether the debtor attends the hearing or not. We encourage people to contact us as soon as possible before the hearing if they do not agree that they are liable for the debt or dispute the amount shown on the summons.

A Liability Order gives the Council additional powers to recover the unpaid council tax and to demand certain information from debtors that they are legally required to give. The extra powers that we may use include:

• attachment of Earnings Order - this lets us collect the money owed directly from a person's wages
• deductions from benefit - this lets us collect the money owed directly from certain benefits that a person may be in receipt of
• taking control of goods- we instruct enforcement agents to collect the debt
• Charging Orders - if the debtor owns the property where the debt occurred, and if there is sufficient equity in it, we will consider applying for a Charging Order, providing the Liability Order debts are at least £1000.00 and we have fully undertaken the steps as detailed on above
• forcing sale on a charging order - where we have obtained a charging order, we are able to apply to the County Court to recover a debt or to bring an empty property back into use
• bankruptcy - providing the Liability Order debts are at least £5,000
• committal to prison - where Enforcement Agent action has been unsuccessful the Council will consider issuing a committal summons for the debtor to be committed to prison for non-payment

We do not need the debtor's agreement before taking any of the above courses of action.

Once a Liability Order has been obtained in court, the Council will use the methods of recovery appropriate to the individual case having considered the debtor's circumstances and offer to pay.

Charging Orders, forcing sale, bankruptcy and committal to prison are all dealt with on an individual basis and potential cases are considered by the Business Rates and Debt Manager or Recovery Team Leader before being referred to an authorised officer for approval.