5. Specific policy areas
Specific Policy Areas
8.1 Council Tax (see appendix 2 for recovery procedures)
8.2 Non-Domestic Rates (Business Rates) (see appendix 3 for recovery procedures)
8.3 Housing Rents (see appendix 4 for recovery procedures)
8.4 Housing Benefit Overpayments
8.5 Parking Fines
8.6 Sundry Debts/Invoices
8.1 Council Tax
8.1.1 Recovery procedures are laid down in statute in The Council Tax (Administration and Enforcement) Regulations 1992 and subsequent amendments.
8.1.2 Our aim is to collect the Council Tax promptly and efficiently in order to prevent debt and recovery action escalating.
8.1.3 The administration, collection and recovery is the responsibility of the Service Lead for Revenues, Benefits & Customer Services.8.1.4 The Council believes that preventing arrears from building up is essential and the additional measures we take are as follows:
- We offer 3 dates for Direct Debit as we recognise that this is a proven method for ensuring payments are made on time.
- We offer a wide choice of payment options with a selection of payment dates that we advertise on all our bills and recovery documents.
- We will make arrangements to encourage and support residents in getting back on track with their payments.
- We can agree payment breaks if the resident finds themselves without funds for a period.
- We issue reminders promptly to avoid debts escalating.
- We provide up to date advice on our website.
- We will work closely with Benefits and the Financial Resilience team to identify entitlement, make sure any awards in payment are up to date and consideration of discretionary funds and other support available is identified.
- 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 residents to debt advice agencies and promote these on our literature.
8.1.5 We will apply to the Magistrates’ Court for Liability Orders, when necessary in order to recover the debt. This gives additional recovery powers, including:
- Attachments of earnings
- Attachment of benefits
- Taking control of goods through the use of enforcement agents
- Charging Orders where liability order exceeds £1000.00 (page 6)
- Bankruptcy action where liability order debt exceeds £5,000.00 (page 6)
- Committal to prison (page 6) is taken when other appropriate remedies have been attempted. 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'. The Magistrates also have the power to remit all, or part, of the debt. The maximum sentence is three months.
See appendix 2 for the full recovery details.
8.2 Non Domestic Rates
8.2.1 Recovery procedures are laid down by statute in The Local Government Finance Act 1988 and subsequent regulations and amendments.
8.2.2 The administration, collection and recovery is the responsibility of the Service Lead for Revenues, Benefits & Customer Services.
8.2.3 Non Domestic Rates, commonly known as business rates, are levied on a national basis but the local authority is responsible for billing and collection including appropriate recovery measures.
8.2.4 The Council believes that preventing arrears from building up is essential and the additional measures we take are as follows:
- We offer 2 dates for Direct Debit as we recognise that this is a proven method for ensuring payments are made on time.
- We offer a wide choice of payment options that we advertise on all our bills and recovery documents.
- We issue reminders promptly to avoid debts escalating.
- We provide up to date advice on our website and in our notifications.
- 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 make arrangements taking into consideration the fluctuations in income, common to seasonal businesses, and place the emphasis for repayment on times of likely maximum business activity.
8.2.5 We will apply to the Magistrates’ Court for Liability Orders, when necessary, to recover the debt. We will use all appropriate methods of enforcement available through Liability Orders including:
- Taking control of goods, through the use of Enforcement Agents.
- Insolvency proceedings (page 6)
- Committal to prison (page 6/7) is taken when other appropriate remedies have been attempted. 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'. The Magistrates also have the power to remit all, or part, of the debt. The maximum sentence is three months.
See appendix 3 for full details of the recovery process.
8.3 Council House and Garage Rents
8.3.1 The Council’s primary concern is to recover the rent debt rather than to regain possession. We will consider eviction only as a last resort if all other action has failed.
8.3.2 The administration, collection and recovery is the responsibility of the Service Lead for Housing.
8.3.3 The Council believes that preventing rent arrears from building up is the preferred option. The measures that we will take to support this are:
- Adopting tenancy start-up procedures which include providing the new tenant with advice on Housing Benefit/Universal Credit, welfare benefits checks, payment method, a Welcome Pack and rental advice at accompanied lettings stage.
- Advising tenants at sign up to have their Universal Credit paid directly to the Council if they are claiming it, or to advise them how to claim if not currently claiming.
- Advising tenants to submit their Housing Benefit or Universal Credit claim form straight away to maximise entitlement and help prevent unnecessary delays.
- Providing readily accessible information to tenants, particularly those with specific needs such as lack of numeracy and literacy skills.
- Providing advice on the various payment options.
- Making sure that tenants know who their Rental Team Officer is so that they can discuss tenancy issues at an early stage.
8.3.4 The Council will act promptly in contacting tenants if rent arrears begin to accrue and will adopt the following procedure:
- We will send reminder letters, telephone and may also carry out a home visit.
- If the reminders are ignored we may serve a Notice of Seeking Possession to secure tenants, or a Notice of Seeking Possession or a Notice to Quit, depending on the type of tenancy the tenant has. This is the first step of the legal process to obtain possession of the dwelling. The Notice gives a period of at least 28 days to clear the debt in full or to make an arrangement to pay in instalments. If the debt continues to increase, we will apply to the County Court for a hearing to seek a Possession Order on the property.
- At the hearing, the District Judge will normally grant a Suspended Possession Order requiring the debtor to pay the rent as it falls due plus a fixed sum each week towards the arrears of rent. At the Hearing, we will also seek an order for costs, which will be added to any rent arrears on the rent account. Please see appendix 4 for details of costs.
- If the debtor fails to keep to the terms ordered in the County Court we will inform the Court of the default and request the issue of a Possession Warrant, which the County Court enforcement agent will serve and execute to take possession of the property.
- The Council will do everything possible to prevent evictions but, as a last resort, we will evict tenants if they do not pay their rent.
8.3.5 If a Council tenancy has been terminated leaving rent arrears, the Council will:
- Apply to the County Court to set repayment terms.
- If employment details are known, apply to the County Court for an Attachment of Earnings Order. The Court will order an employer to make deductions from the debtor’s earnings to pay the outstanding rent debt.
- Apply to the County Court for a County Court Judgement (CCJ). A CCJ will affect the debtor’s credit rating and they will find it difficult to obtain credit, loans, credit cards etc.
- Subsequent applications for housing with any Local Authority or other Registered Social Landlord (Housing Association) may be affected by any rent outstanding from a previous tenancy.
8.3.6 Garage rents are recognised as non-essential expenditure therefore, failure to pay will result in proceedings to terminate the licence.
- Once garage rent of 1 week or more is owed we will serve a Notice to Quit and, at the end of that period of notice (minimum of 7 days), we will change the locks and repossess the garage.
8.3.7 In regards to our forms of communication with customers we will do the following:
- Telephone – trying to engage more tenants by phone due to the Covid 19 restrictions. Reasonable efforts include a minimum of three attempts at phone calls where telephone numbers are available.
- Email – making sure that we are adhering to Data Protection guidelines.
- In person at the Council’s main reception at Honiton, Exmouth or in the residents home (by appointment).
- Face to Face - When we are able to visit tenants we will ensure we visit at least 3 times to engage with tenants, in addition to all the usual pre-court preparation, prior to court application.
- Letter – advising tenants of the new possession claim proceedings and the new directive from the 23rd August 2020. New ‘pre- AR1 letter’ being sent to all tenants when they first appear to have arrears offering help and support.
- We will work across teams to ensure we have the help of the MSO’s where sheltered properties, Estates where we may have engagement issues and Options where we know the tenant has been provided with a home through the homeless route , any background information must be thoroughly investigated prior to applications to court.
See appendix 4 for full details of the recovery process
8.4 Housing Benefit and Council Tax Reduction Overpayments
8.4.1 Recovered in accordance with Housing Benefit Regulations 2006, The Housing Benefit (State Pension Credit) Regulations 2006, Council Tax Reduction Policy and Council Tax Benefit Regulations 2006 (Pre April 2013 overpayments) and The Council Tax (Administration and Enforcement) Regulations 1992, as amended.
8.4.2 The administration, collection and recovery rests with the Service Lead for Revenues, Benefits and Customer Services.
8.4.3 Council Tax Reduction and pre April 2013 benefit overpayments are always added back to the Council Tax account and are therefore recovered in accordance with Council Tax Reduction Policy/Council Tax regulations. Housing Benefit overpayments are recovered as detailed from 8.4.4.
8.4.4 Overpayments occur because a resident has been paid too much benefit/reduction and so the Council’s aim is to try and prevent this from happening. We have the following measures in place:
- Residents being supported through the application process to ensure they are paid the right amount of benefit/reduction.
- The use of website and letters to reinforce resident responsibility to notify us immediately of any changes in circumstances which are then dealt with promptly.
- Making use of DWP/HMRC data available to ensure that benefit entitlement is based on up to date information.
- Reviewing claims for known future changes whenever possible such as annual increase in the minimum wage.
8.4.5 Once a Housing Benefit overpayment has been created the Council will normally collect from on-going housing benefit where it is in payment. Recovery rates are set by DWP and, initially, we will always apply the maximum recovery rate permissible. Staff have the discretion to reduce the recovery rate or suspend deductions if the resident can show that this would cause unreasonable hardship, for instance, where a resident is unable to pay their rent or is on a Suspended Possession order.
8.4.6 Where there is no on-going Housing Benefit we will issue an invoice for payment. A resident has one month to pay before further recovery action. To prevent recovery action we:
- Offer a wide choice of payment options.
- Encourage and support residents to make an arrangement.
- Provide up to date advice on our website and in our notifications.
- Do not refuse any payments which reduces the debt. However, if it less than the requested amount recovery action may continue.
8.4.7 If after one month the invoice remains unpaid and no arrangement has been agreed then a first reminder will be sent giving 7 days to pay. If no payment or contact is made within 14 days then a second reminder is sent giving a further 7 days to pay. If the debt still remains unpaid we will consider taking the following actions:
- Deduction from certain DWP benefits.
- By applying to another Local Authority for them to deduct from the resident’s on-going Housing Benefit.
- Recovery from a debtor’s landlord where the landlord is now being paid for a current tenant.
- Direct earnings attachment from debtor’s employer.
- Applying to the County Court.
- Use of debt collection agencies to recover on our behalf.
- Use of the DWP’s Matching Service with HMRC that will establish earnings and pension information in addition to last known address.
8.4.8 Overpayments that have occurred because of fraud are excluded from insolvency and recovery will continue once they have been discharged.
8.4.9 Some benefit/ Council Tax Reduction overpayments are not recoverable. These arise if we or the DWP, make an error where the resident to whom the benefit/ Council Tax Reduction was paid, cannot reasonably have been expected to know they were receiving benefit/Council Tax reduction to which they were not entitled.
8.4.10 The overpayment team will refer any cases where a resident cannot repay an overpayment due to experiencing financial hardship to the Financial Resilience team for further work. Findings and arrangements considered affordable by the Financial Resilience team will be considered when deciding on any further possible recovery action.
8.5 Parking fines
8.5.1 Are recovered in accordance with the requirements of the Traffic Management Act 2004.
8.5.2 The administration, collection and recovery is the responsibility of the Service Lead for Environmental Health and Carparks.
8.5.3 The fine is discounted by 50% for the first 14 days after the Penalty Charge Notice is served (14 days is counted as not later than the last day of a 14 day period starting from the date the Penalty Charge Notice is served). If the debtor fails to pay the discounted rate and does not successfully challenge the Notice, the full charge will be due
8.5.4 After 28 days from the serving of the Notice, if the full amount of the fine remains unpaid (or has not been successfully challenged) the Council will send a ‘Notice to Owner’ to the registered keeper of the vehicle. This gives the following options:
- 28 days to pay in full.
- Make representations against the serving of the Notice to Owner and if these are rejected make an appeal to the Traffic Penalty Tribunal. If the appeal is successful, we will withdraw the Penalty Charge Notice and return in full any payment that has been made to us.
8.5.5 If the debtor does neither of the above, we will send a ‘Charge Certificate’ and the fine will increase by 50%. There is no right of appeal at this stage and the increased charge (the original fine plus 50%) must now be paid by 14 days from the service of the Charge Certificate.
8.5.6 If the full charge remains unpaid after 14 days, we will send a Notice of Pre-debt Registration letter to the registered keeper of the vehicle informing them that we will register the debt in the County Court of the Traffic Enforcement Centre, Northampton. The letter also gives the debtor another chance to pay the full charge due within 14 days.
8.5.7 If the charge remains unpaid after the 14 day period, we will register the debt in the County Court. A court fee will be added and the debtor will be sent an ‘Order of Recovery’.
8.5.8 On receipt of the Order of Recovery, the debtor is required:
- To pay the full charge within 21 days from the service of the Order, or
- Fill out a ‘Witness Statement’ (enclosed with the Order of Recovery). This gives the debtor the opportunity to sign a ‘Statement of Truth’ as regards four specific claims:
- The debtor did not receive the Notice to Owner (parking contravention) document.
- The debtor appealed to the Parking/Traffic adjudicator against the Council’s decision to reject their representation, within 28 days of service of the rejection notice, but had no response to their appeal.
- The debtor made representations about the penalty charge to the enforcing authority concerned within 28 days of the service of the Notice to Owner, but did not receive a rejection notice.
- The penalty charge had been paid in full.
8.5.9 If the debtor does nothing, the Court will issue a Warrant of Execution’ authorising an enforcement agent to recover the debt. The debtor will then become liable for enforcement fees in addition to the original fines and costs.
8.6 Sundry debts
8.6.1 Sundry debts occur as a result of chargeable services and works provided by the Council. Where possible and appropriate we will request a pre-payment arrangement and in the case of non-payment the service will either not be provided or could be revoked.
8.6.2 Only where a pre-payment arrangement is not possible will we invoice the debtor. These are civil debts which are recoverable through the County Court. Some examples of sundry debts include rent deposits, Home Safeguard fees, rents from commercial lets and many other fees for services.
8.6.3 The collection and recovery of sundry debts is the responsibility of the Service Lead for Revenues, Benefits and Customer Services.
8.6.4 When the Council has failed to recover the debt through the usual invoicing process, we will initially send reminder letters which specify the period within which payment must be made.
8.6.6 Debts not paid or with no repayment agreement in place will be pursued via application for a County Court Judgement (CCJ) using the Money Claim on Line. Prior to claim to court being issued a ‘letter before action’ in line with the pre action debt protocol will be sent. This will give 28 days to pay, respond with an instalment offer or complete a Standard Financial Statement form, before the court application is made.
8.6.7 Once the Claim has been made with the court and on receipt of a Notice of Issue (NI), the debtor has 14 days in which to reply/acknowledge to the Court. The Council may agree to a suitable payment arrangement with the debtor at this stage.
8.6.8 If there is no response to the NI, we will make an application to the Court for a judgement in default.
8.6.9 If the debtor contests the claim by submitting a defence, it will become a defended matter and the Legal Department will prepare a case to present to the Court.
8.6.10 A County Court Judgement gives the date for the first payment from the debtor if an instalment plan is agreed or when the debt should be settled in full.
8.6.11 If no payment/s are received, and the debtor’s employment details are known, an Attachment of Earnings Order may be made unless the Council already has one in place in any other section.
8.6.12 If an Attachment of Earnings or a Court Order is not successful the debt may be passed to the Council’s collection agent or other enforcement methods used. Where there is going to be a recurring invoice the service area will also be informed in order to prevent further debts from building. This may result in the service being removed until the invoice is paid, for example: rental of beach hut, car park space, etc.
See appendix 6 for full details of the recovery process flow chart.