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

Sundry debtors

Ownership of all sundry debts rests with the originating Service. These Services will be responsible for issuing an instruction to cancel an invoice and to correspond with or discuss with the debtor issues relating to validity of the debt.

Raising invoices

All invoices raised must be properly supported by documentary evidence that supports the debt.

Invoices must not be raised for debts less than £15, unless contractually obliged, as it is deemed uneconomical to raise and process invoices for less than this amount. The Council should look to collect income under this limit by other means, such as payment in advance. In certain circumstances where the individual amounts are small and the only means of collection is to raise an invoice, then it is acceptable to accumulate the charges until this limit is exceeded.

Officers must ensure that invoices are raised promptly. The council will aim to raise the invoice within 10 working days of delivering the service or goods or funding or of the commencement of the period where the service covers a period of time.

Where a continuing supply is involved, invoices should be issued periodically, within 10 working days of the end of each period or, if payment in advance is appropriate, 10 working days in advance of the end of the period. The timing on invoices needs to consider the Council's legal obligations under relevant legislation.

The Council's sundry debt system will be used to raise all the Council's sundry debt invoices and subsequent reminder letters. Invoices will be issued with the appropriate contact details. Where the service has been provided to a different address from the billing address this will be made clear on the invoice by way of an alternative address box or additional narrative.

Credit notes & account adjustments

Credit notes will be:

• supported by evidence that validates the reason for reducing or cancelling a previous amount invoiced
• authorised by the appropriate Manager to cancel an incorrect invoice, before re-invoicing correctly
• applied to, or reduce the balance of, the invoice it was raised against only

A credit note must not be used as a method to write off debts, as to write off a debt is subject to a detailed process as set out in Section 4.

Any adjustments required to a debtor account should be processed within 10 working days of the Business Rates and Sundry Debt Team being given the appropriate correspondence.

Terms and conditions

All Invoices must request payment immediately/within 28 days, and should never exceed this, unless a contract supersedes this condition.

Returned invoices

All invoices/reminders returned by post stating 'gone away' or 'addressee not known' will be recorded as such on the Sundry Debts System. The Business Rates and Sundry Debt Team will then go through a gone away checklist to see if it can be re-billed to a new address or consider write off. Further information on a current address may be available from the originating Service

Depending on the debt level, the Business Rates and Sundry Debt Team can consider referring such 'gone away invoices', to a Tracing Agent.

If, subsequently, no forwarding address is found the invoice should follow the procedure to be written off, 4. Debt recovery and write offs.

Disputed invoices

If the Business Rates and Sundry Debt Team receives notification that the customer disputes the invoiced amount, then a hold marker will be placed on that account and the originating Service will be informed within 10 working days of the date the dispute is raised.

Recovery will be withheld on these disputed invoices for a maximum of four weeks, to allow the originating service to resolve the issue. This may in limited circumstances be for a longer period if the originating Service is maintaining an ongoing dialogue with the debtor.

If the originating Service doesn't respond to a disputed invoice after four weeks, it should be escalated to the Head of Service for resolution.

Collection & Recovery

The collection of income in respect of invoices raised must follow a standard course, which fully documents on the Debtors System the efforts made to settle the debt.

If no payment is received within the stated terms, the Business Rates and Sundry Debt Team will commence its recovery procedures, which begins with a first stage reminder letter, giving a further 7 days' notice.

After the lapse of the 14 Days of the Reminder Notice a further Final Notice will be sent giving a further 7 days to pay.

At the end of the Final Notice Period, Service Areas will be provided with a list of cases that require further recovery action. These lists will be updated monthly and the action taken will be determined by the Recovery Team unless an alternative action is agreed with the Service Area first. If there is any delay in advising what this further recovery action is by the Service Area then it will be escalated to Heads of Services.

The recovery routes may include:

• further contact with the debtor via telephone, letters, e-mails or a personal visit to settle the debt
• referring the debt to a Debt Collection Agent
• Commercial Rent Arrears Recovery
• suspending the future service to the debtor, where legally permissible
• issuing a summons for the debt to be recovered via the County Court using statutory methods such as attachment to earnings, charging order, third party debt order or insolvency proceedings
• legal proceedings for the forfeiture of leases

Instalment arrangements can be made at all stages of recovery, they will be monitored, and reminders will be sent out within 14 days of the customer falling into arrears. Instalments will then be withdrawn if the account is not brought up to date within a further 14 days.

Correspondence will advise the customer of further enforcement action, refer to any statutory interest (if applicable), under the Late Payment of Commercial Debts Regulations, that the debtor is liable to pay if the payment does not meet our agreed terms and conditions, and any interest that will accumulate from the date of the correspondence.

The Business Rates and Sundry Debt Team will provide reports to the originating service on a regular pre-agreed basis as to the value and age of their outstanding debt. A high-level summary of aged sundry debts for each service area will be reported to Senior Management Team in the Annual Debt Report to members.