Summary: Ms X complains about the way the Council has handled her council tax arrears. She says it has caused stress and anxiety, increased costs due to passing the debt to bailiffs, and affected her work. She also says bailiffs caused £300 worth of damage to her front door. The Ombudsman does not find fault with the Council.

The complaint

1. The complainant, who I refer to here as Ms X, complains about the way the Council has handled her council tax arrears.
2. Ms X says this has caused stress and anxiety, increased costs due to passing the debt to bailiffs, and affected her work. She also says bailiffs caused £300 worth of damage to her front door.

 

The Ombudsman’s role and powers

3. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)

How I considered this complaint

4. I considered the information and documents provided by Ms X and the Council. I spoke to Ms X about her complaint. Ms X and the Council had an opportunity to comment on an earlier draft of this statement. I considered all comments before I reached a final decision.
5. I have considered the relevant legislation, regulations and policies, set out below.

What I found

The law, regulations and policies

Council tax

6. The primary legislation for council tax is the Local Government Finance Act 1992. The main secondary legislation concerned with collection and recovery is The Council Tax (Administration and Enforcement) Regulations 1992 (“the Regulations”). Councils are responsible for collecting council tax.
7. If a council tax payment is missed, a council must issue a reminder notice (at least seven days after the missed payment). If the arrears are not paid, the balance for the full year then becomes due. A council can then complain to the Magistrates Court and issue a summons. A liability order hearing is then heard in the Magistrates Court. The court can then grant a liability order.
8. Councils will charge costs for the issue of a summons and a liability order. If only the costs of the summons are outstanding the council can still ask for a liability order, with the additional costs. The case can proceed in the defendant’s absence. The court must grant an order if it is satisfied that the sum has become payable and has not been paid. Once a council has obtained a liability order it can take steps to recover the debt without any obligation to inform the debtor. This usually involves a council passing the debt to enforcement agents, known as bailiffs.
9. The Regulations (section 17(4)) say the date a document was issued is the date it was left with the person (if delivered by hand) or posted. Councils may refer to the date of issue as the date that appears on the document, and usually on the council’s computer system. But this may not be the date the document was actually posted. This is important because the time limits for recovery action start from the date of issue, not the date a person receives the document.
10. Councils can serve bills electronically where the taxpayer has agreed to this form of service and provided an email address (SI 2003/2604).
11. For a document to be effective it must be served on a person. Summonses are served under the Regulations (section 35(2)). All other documents are served under the Local Government Act 1972 (Section 233). Both say the document may be served on a person by delivering it to them (in person), leaving it at their proper address or sending it by post to their proper address. Proper address is taken to be the last known address. There is no need to use registered or recorded post.
12. Unless the contrary is proved, a document is deemed to have been served by post when it would be delivered in the ordinary course of post under Section 7 of the Interpretation Act 1978.
13. Under section 52(4) of the Regulations, any payments made are first put towards any costs, including any bailiffs’ costs. The allocation of payments can give rise to problems, especially when there are arrears or summonsed debt.
14. Councils’ computer systems will allocate payments according to some simple rules. Usually payments which are exactly equal to instalments or exact multiples of instalments will be allocated to the current liability. After a summons is issued the computer system may then allocate instalment payments to any arrears, because the right to pay by instalments is lost once a final notice has been issued.
15. Councils have discretion to decide when the instalments will be payable, but the law says there can only be one instalment for one taxpayer in any one month. The council decides on the dates before the start of the tax year and they cannot be changed during the year. By agreement, a council and a taxpayer may make a special payment arrangement outside the normal instalment scheme.

Bailiffs’ code of practice

16. The Council uses a company of bailiffs on its behalf to collect council tax debts. This company has a code of practice for enforcement, issued May 2015. This outlines how it attends debtors’ properties.
17. It says bailiffs will only conduct visits between 6am and 9pm with some exceptions. It says bailiffs will introduce themselves and show identification. It says bailiffs will hand to the debtor, or leave at the property, documentation on pre-printed stationery.

What happened

18. In October 2017, Ms X became liable to pay council tax for her new home. In November, the Council sent Ms X a council tax bill for October 2017 to March 2018. This included the single person discount.
19. The bill said if Ms X did not pay instalments on time, her right to pay by instalments would be withdrawn and the remaining balance for the year would need to be paid in full. It said the Council would only send two reminders in the year. After that, if the bill is unpaid, the Council would issue a summons and possibly a liability order, both of which incur costs.
20. Ms X made her first payment in December. The remainder of the 2017/18 year’s council tax was due to be paid on the first day of January, February and March 2018 by direct debit.
21. Ms X had financial difficulties and fell into arrears. The instalment for January 2018 was not paid.
22. In January 2018, the Council sent a reminder notice. The Council says Ms X did not respond.
23. In February, the Council sent Ms X a second reminder notice. It told Ms X that no further reminders would be sent. The Council warned her that it would start legal action if she did not pay, which would incur more costs. The Council says Ms X did not respond.
24. In March, the Council sent Ms X her council tax bill for 2018/19. 12 monthly instalments were due to start on 1 April 2018.
25. At the end of March, the Council sent a summons for Ms X to attend court in April over the unpaid 2017/18 council tax bill. The Council says Ms X did not respond.
26. Ms X did not pay the first instalment in April for the 2018/19 bill. The Council sent Ms X a first reminder notice.
27. Later that month, the court made a liability order against Ms X for the outstanding unpaid council tax balance owed for the 2017/18 year.
28. Ms X did not make the payment for the 2018/19 year which was due on 1 May.
29. On 2 May, the Council wrote to Ms X confirming that the court had made a liability order, which had incurred further costs. The Council asked Ms X to make contact, complete a ‘special arrangements’ form and return it, to avoid bailiff action. It outlined the costs involved if her debt was passed to bailiffs.
30. Ms X emailed the Council that day. She said she knew she had arrears but could not pay until the end of May.
31. The Council replied. It said it could defer payments for the 2018/19 liability until 1 June but this would mean an increase in the instalment amounts. The Council asked Ms X to complete a ‘special arrangements’ form, and put in place a repayment arrangement from the date in May she said she could start making payments.
32. The Council also attached Ms X’s 2018/19 council tax bill. It says Ms X did not reply to this email.
33. In May, the Council sent Ms X a second reminder for the 2018/19 bill because she had not paid the instalments in April or May. It said no further reminders would be sent, and if she did not pay then the Council would take legal action which would incur more costs. The Council says Ms X did not respond.
34. At the end of May, on the date Ms X said she could make payments, the Council says it received no payments.
35. In June, the Council sent Ms X a summons to appear in court in July for the unpaid council tax for the 2018/19 bill.
36. In July, the court granted a liability order against Ms X for the unpaid 2018/19 council tax.
37. At the end of July, the Council sent Ms X a letter confirming that a second liability order had been made. It asked her to complete a ‘special arrangements’ form and return it, to prevent bailiff action.
38. In August, the Council passed Ms X’s 2017/18 debt to bailiffs because it had received no payments from Ms X.
39. The bailiffs sent Ms X a notice of enforcement which gave her 14 days to contact them and arrange payment. The bailiffs say Ms X did not respond.
40. At the end of August, the bailiffs sent Ms X another letter asking her to contact them. They said they would discuss a payment plan if Ms X contacted them before they sent a bailiff out to her address to seize goods to repay the debt. The bailiffs say Ms X did not respond.
41. In September, the bailiffs sent Ms X another letter, saying the same thing. The bailiffs say Ms X did not respond.
42. In October, the Council passed Ms X’s unpaid council tax debt for the 2018/19 year to bailiffs because it had received no payments from Ms X.
43. The bailiffs sent Ms X a notice of enforcement for this debt. The bailiffs say Ms X did not respond.
44. The bailiffs then sent two further letters to Ms X in October. They asked her to contact them to discuss a payment plan before they sent a bailiff to her address.
45. At the end of October, Ms X contacted the Council. She said she did not know the debts had been passed to bailiffs. She said she was not able to make payments due to financial difficulties. She also said she did not want to deal with the bailiffs because the company had a bad reputation.
46. On the same day, Ms X made two payments to the Council which were credited to the 2017/18 debt.
47. The Council replied, saying it told the bailiffs that Ms X had made payments directly to the Council. It said she still owed for the first and second liability orders, which would also have incurred additional enforcement fees. The Council said it would not agree a repayment arrangement with her because this must be done with the bailiffs.
48. Ms X complained to the Council in November. She said that because the Council accepted her two payments, this implied the Council accepted her repayment offer.
49. The Council responded to Ms X’s complaint two days later. It said once a debt had been passed to bailiffs, all repayment arrangements must be made between bailiffs and the customer. It said Ms X’s payments in October did not result in her debt reverting back to Council, and did not prevent additional costs being added to her outstanding debt.
50. The Council said it was satisfied that the bailiffs act with appropriate regulatory authority undertaking recovery on the Council’s behalf. It also said it was satisfied it had told her about the recovery action at all stages. It said it had invited her to enter into a ‘special arrangement’ to repay before her debts were passed to bailiffs, but Ms X did not complete the form and return it to the Council.
51. The Council repeated that Ms X needed to make repayment arrangements with the bailiffs as a matter of urgency, if she had not already done so.
52. Later in November, the Council wrote again to Ms X. It said it engaged this company of bailiffs to act on its behalf to collect council tax arrears when all other recovery avenues have been exhausted. It said it was aware of additional charges that bailiffs are allowed to charge, which are in accordance with the Regulations.
53. It said Ms X had contacted the Council in May, and the Council had replied with an offer to reset the instalment plan in June. It said Ms X did not respond in time.
54. The Council repeated that once a debt has been passed to bailiffs, all repayment arrangements must be agreed between the customer and the bailiffs. It outlined the fees and charges which are added when debts are passed to bailiffs for recovery action. It said what charges had been added and why.
55. Ms X was not happy with the Council’s response to her complaint, so asked that it deal with her complaint at the next stage of its complaints procedure.
56. In January 2019, the bailiffs sent Ms X a statement of her account. This said she had made three payments on the 2017/18 debt, but still owed money. It said she had made one payment on the 2018/19 debt, but still owed money.
57. Later that month, the Council sent Ms X its stage two response to her complaint. It said the liability orders had been obtained correctly. It said it could not issue reminders and recovery notices electronically.
58. Ms X said she did not receive either of the liability orders. The Council said it would not have sent her these because they are retained by the Council. However, it said it wrote to her shortly after each liability order was granted to confirm outcome of the court hearings.
59. The Council confirmed how much Ms X owed, and what costs had been added.
60. The Council said it was satisfied with the company of bailiffs working on its behalf. It said it only sends debts to bailiffs when all other avenues have been exhausted. The Council said it was satisfied that it had made every attempt to set up suitable repayment plans for both years’ debts, but Ms X had failed to keep to these arrangements.
61. The Council said it told Ms X in August 2018 that her 2017/18 debt was with bailiffs. It said she chose to make two payments to the Council in October 2018. It said she made these payments after she was told her debt had been passed to bailiffs, but this did not mean the Council was obliged to take the debt back from bailiffs, or negotiate the charges already applied.
62. The Council said additional charges had been added appropriately. It asked Ms X to contact bailiffs directly to arrange a “mutually agreeable” repayment plan.
63. Ms X then complained to the Ombudsman.

Analysis

Dealing with Ms X’s council tax debt

64. Ms X complains about the way the Council has handled her council tax arrears.
65. The Council sent reminder notices as it should have done. It says Ms X did not respond to these notices. The first time Ms X contacted the Council about her arears was in May 2018, after the first liability order had been granted by the court.
66. The Council passed Ms X’s debts to bailiffs, as it is entitled to do. It did this because Ms X had not contacted the Council and had not made payments. The Council’s first council tax bill is clear that if payments are not made, it can and will take legal action to recover these costs.
67. The process of taking a council tax debt to court and then passing the debt to bailiffs adds costs to the debt. Ms X was informed of this throughout the process.
68. Ms X says she did not get the letters the Council or the bailiffs sent her. This is unfortunate but it is not evidence of fault. As stated in paragraph 12, unless it can be proved that the letters were not served, the law says that once posted the letter are deemed to have been served.
69. In any event, Ms X told the Council she knew she was in arrears. Ms X tells me she knew about the consequences of not paying council tax, but did not deal with it because of embarrassment and fear. This is not evidence of fault with the Council.
70. I do not find the Council at fault for the way it handled her council tax debt.
71. Ms X says she did not complete the ‘special arrangements’ form because she sent back her own spreadsheet of her budget, which she says contained the same information the Council had asked for.
72. The Council says it did not receive this email with this information which Ms X says she sent in September 2018.
73. I would not find the Council at fault for not going through Ms X’s spreadsheet, even if it had received it. I find no exceptional reasons why Ms X could not have completed the form, as requested, and returned it.
74. Ms X says the second liability order is wrong because it does not take into account her single person discount.
75. I have seen the bill for the 2018/19 year which shows the single person discount has been applied. I would not expect a liability order to specify that a debt includes a single person discount. There is no evidence of fault here.

Added costs

76. Ms X says the added enforcement costs are not ‘reasonable’ as stated in the legislation. For this reason, Ms X says she is not willing to pay the added enforcement costs.
77. The costs added by the court and the bailiffs are in line with the Regulations.
78. I find that the costs were added appropriately, so the outstanding debt is legitimate.

Electronic correspondence

79. Ms X complains that the Council did not send liability orders and related correspondence electronically. She says the Council should have done this because she had already agreed to e-billing.
80. The Council says it sends annual council tax bills by e-billing. It says its system is not currently capable of issuing reminders and recovery notices in this way. It says it is not required by law to send reminders and recovery notices in this way.
81. The Regulations say councils can serve bills electronically where the taxpayer has agreed to this form of service and provided an email address. The Regulations do not say that councils must send all council tax-related correspondence in this way.
82. In this case, the Council sent Ms X’s annual bill electronically, as she requested. The Council is not obliged to send any other correspondence in this way. For this reason, I do not find the Council at fault.

Bailiffs

83. Ms X says the company of bailiffs used by the Council has a bad reputation and is “shady”.
84. The Council is satisfied with the bailiffs.
85. The Council is entitled to use the services of bailiffs as it sees fit. I have seen no evidence that the bailiffs acted inappropriately with Ms X or her case. Ms X refuses to deal with the bailiffs because of their reputation.
86. I find no fault with the Council for using these bailiffs.
87. Ms X says the Council has discretion to take debts back from bailiffs. She says the Council should use its discretion and take back her debt from the bailiffs.
88. If there is no evidence of fault, the Ombudsman would not tell a council how or when to use its discretion. In this case, I find no fault and I have seen no evidence of exceptional circumstances that would indicate the Council should take Ms X’s debt back from the bailiffs.
89. Ms X says bailiffs came to her home unannounced. She says she did not get any notice that bailiffs would attend her address, and says this is a breach of the bailiffs’ policy.
90. The bailiffs’ code of practice is outlined in paragraph 17. It says nothing about notifying a debtor of attendance beforehand. I do not find fault for the bailiffs not notifying Ms X before attending.
91. Ms X says that when a bailiff came to her home, they enraged her dog which then caused £300 of damage to the door. She says this was witnessed by a neighbour. She says she does not want to claim on her insurance.
92. The bailiffs have told Ms X that if she has evidence that damage was caused by a bailiff attending her address, she should send it to them to investigate. They say Ms X has not sent this evidence.
93. I have seen no evidence that the Council or the bailiffs are responsible for causing the damage to Ms X’s door. I do not find fault here.

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Final decision

94. I have completed my investigation and I do not uphold Ms X’s complaint. This is because I have found no evidence of fault.