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First, some background:

 

 

I'm 77 but both my wife and I are still working due to need.

I work through a private limited company in a form of consultancy,

my wife in a retail business partnership.

 

 

We rent privately a house where we've lived for some 20 years and where the Council Tax has now risen to nearly £280/month for 12 months.

 

 

During 2015 my work opportunities dropped dramatically, worsened by a couple of largish bad debts.

 

 

Although I was always up to date with CT payments things started to get particularly difficult from about February and I fell into arrears amounting earlier to over £900.

 

 

For other reasons (non-priority debts)

I'd worked out personal financial statements and these showed monthly shortfalls of income over expenditure of between £350.00 and £150 at different periods;

 

 

I've steadily reduced expenditure,

applied for and received from April Working Tax Credit (about £80/month)

and steadily and systematically sell possessions (eBay mainly) while also trying to get work-related income.

 

I've corresponded and spoken with the local council who were prepared to make some timing concessions re payment

by scraping around as mentioned above

I've got the debt down to just under £500 while still keeping monthly CT payments up to date.

 

 

I've looked into both getting housing benefit or some form of CT relief

but this isn't possible because my wife both owns a house elsewhere in the UK, several hundred miles away,

and has tied-up financial assets of over £16,000.

 

 

My earning are currently zero and so my monthly income

(other than from sales of personal goods) is around £525 (state pension + WTC)

while my wife's is about £800 (state pension + about £550 earnings).

 

Despite making slow progress in reducing the debt and despite keeping the Council updated with my situation

I received last week a court summons for the £500-odd, including a £40.00 court fee.

 

 

In my last letter to the Council I'd pointed out that I was genuinely doing what I could,

that clearly I didn't want to incur additional costs unnecessarily

and that if the issue went to court I would argue that I simply had insufficient funds or access to funds

and so the Council would perhaps get less than I was actually paying at present.

 

So, some questions:

there was no notice of an imminent summons

although there had earlier been a general warning of court action.

 

 

Is it not the case (as the Patricia Perl book suggests) that any court action should be preceded by a clear final demand a fortnight or so before that action?

 

 

By juggling money around and probably defaulting on other expenditure (including September's CT)

I can probably just about meet the demand in time (court date is 5 September)

although I'd been working towards paying the current CT and another £100 off the debt.

 

 

I'm not at all pleased

not only about the actual summons

but also the added £40.00

 

 

I'm considering making a complaint to the Council about premature action contrary to apparent agreement

and refusing to pay the added cost (though I guess I'd have to pay it and subsequently claim it as a credit against future payments).

 

How realistic are these approaches and is there anything else I can or should do?

 

 

Clearly the long term need is to get properly back on track but that's going to take months

and in the meantime I need to avoid getting prosecuted.

 

 

I've seen references to protection of OAPs but I can't find anything specific which supports that.

 

So, any useful suggestions will be very welcome. Thanks in advance.

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Hi

Now, I am not that good with these issues but there are a few things I know. The summons will be for the council to obtain a liability order and once in place they can keep it in house and come to a payment arrangement but I fear they may not do this. I suspect they will farm this out to enforcement agents (the new name for bailiffs)

 

I fail to understand why, when a council is receiving some of the outstanding amount, they would then issue the summons.

 

I dealt with a threat to a friend of mine by my local council by making a formal complaint to them and they replied that they obtain liability orders to ensure they get paid one way or another and they stated that they could only come to an arrangement with a liability order in place. I disputed this with them and they backed down.

 

Although the court summons is basically a rubber stamping exercise, you are entitled to attend. Most councils don't like this as it takes time out of their normal routine of getting 100s or 1000s of liability orders done very quickly. Inside the court you would be asked if you owe the money or not and the answer is yes you do and the court can issue the LO on that only however, I would be arguing that as you have been paying this debt down over the previous months, there was no need issue the summons and the associated charges that go with it.

 

Whether that tactic will work is another matter.

 

In the meantime, I would be writing to the council a Formal Complaint (letter headed as such) regarding this and ask them to call back the summons whilst the complaint is investigated. stop dealing with them on the phone. Deal with them in writing only (letter or email) When sending a letter, either send it with proof of posting or Signed For delivery. If you are fairly local to any council office, you can hand in any letter and get a receipt to say you have done so.

 

I'm going to ask for advice on whether to move this thread or not.


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Thanks for that useful comment. I'll write to them straight away, as suggested, so they should get that Friday or Monday. And I'll wait to hear further, as you comment.

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you mention non priority debts playing a part in this

 

what are they please?

not being nosey, but, as you state they are non priority and p'haps cold be dropped to a lower level and the reasons why they cant?

 

as a side issue

you say the CTAX has risen in recent years

are you in the correct banding with regard to local residences of the same type of building?

 

although back in the 90's I was very much in the same boat.

though mine was down to historic banding that at the time one accepted.

 

following involvement with sadly bailiffs due to faults of my own doing the ctax was late on several months

and was short.

 

it was not until I saw posts here about checking your neighbours band

that I discovered I was the only one of two properties in the whole estate that were on this inflated band

the other had had extra work done [extensions] mine had not.

 

queried this with evidence

got a refund for 6yrs.

 

just a thought...


please don't hit Quote...just type we know what we said earlier..

 

if everyone stopped blindly paying DCA's tomorrow

the biggest financial industry in the UK, the whole DCA industry would collapse overnight.

 

 

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Sorry, perhaps I wasn’t clear.

 

 

The reference to non-priority debts was really about the reason for preparing financial statements, which I was then able to use in disucssion with the Council.

 

 

The debts mentioned were C/C related and aren’t relevant to this because I was able to agree with the relevant companies to reduce payments to a token monthly account.

 

as for ctax banding..It's something I've been looking into but I'm having difficulty getting a reasonable valuation of the house in 1991, despite checking the links given in MSE about the process.

 

 

The house was actually sold around then, maybe 1989 or so, so that information would be very helpful to have, certainly, but it's not that easy to discover.

 

 

As to comparisons, it's a large, old farmhouse and so difficult to compare with others although one nearby house with a very different structure but roughly similar in size is in the same band; that could mean both are wrong, of course, and that's why I really want to find out the earlier sale price and work from there.

 

 

It would certainly be very useful to get it downrated as we've been here for something like 20 years. Glad you were able to benefit that way, though.

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Yes it can be a pain

 

Thanks for the non priority info

It was just that you are of the age whereby you accept cc debts and pay them

I hope none are being paid to DCA's


please don't hit Quote...just type we know what we said earlier..

 

if everyone stopped blindly paying DCA's tomorrow

the biggest financial industry in the UK, the whole DCA industry would collapse overnight.

 

 

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Yes it can be a pain

I hope none are being paid to DCA's

 

No, they go direct to the C/C companies.

 

 

I take the view that the arrangement was between the C/C company and myself and that therefore it's inappropriate to sell debts on and so I simply ignore any plaintive letters reminding me that payment should be made to XYZ Sharks Limited.

 

 

Indeed I sometimes amuse myself by writing an imaginary mirror image letter saying that I've sold my debt on to such and such a person and therefore take no further responibility for it

- and, sorry, the address is the one I was given and I can't help it if the PO returns your letters as undeliverable.

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steady.....that sounds mighty near freemen of the land twaddle to me..

 

 

dx


please don't hit Quote...just type we know what we said earlier..

 

if everyone stopped blindly paying DCA's tomorrow

the biggest financial industry in the UK, the whole DCA industry would collapse overnight.

 

 

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With regards to the court - you can attend the hearing, as is your prerogative, however providing you have defaulted on payment then the court will grant the liability order. They can consider only that you have been billed correctly and that you have failed to pay (which is correct).

 

Continuing to the stage of obtaining the liability order is a common process, even if the council are willing to make a payment arrangement as it secures the debt against any future default.

 

The court cannot order a payment arrangement* - their remit is solely to grant or refuse the liability order. Once that's been granted then enforcement action is handed back to the council.

 

 

* they can order a payment arrangement if you were put up, at a later date, for committal to prison.

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Thanks for the various responses, which have helped to clarify matters for me.

 

 

In the end I decided not to make a formal complaint at this stage but instead wrote an email to the council setting out why I thought the raising of a summons was inappropriate and asking them to withdraw it following an expected clearing of that debt at the end of this week.

 

 

I'll post a copy of this email in a separate message in a moment, partly in case there's anything there that anyone might want to comment on and partly in case it's helpful for anyone else in the future to draw on.

 

And here's a copy of the email, suitably redacted:

 

I acknowledge receipt of a summons identified as Case No. ----- in a hearing scheduled for -- September 2016 at ------- and relating to council tax arrears in respect of the reference given above, namely --------.

 

I'm disappointed that you should have taken this action given that I have steadily reduced the amounts owing despite my currently very difficult financial situation, which we've earlier discussed and on which I've kept you up to date.

You will be aware that particularly following my second letter of 9 March 2016, when I enclosed a financial statement of my affairs, I have been making payments to the accounts whenever it's been possible to do so, totalling some £1,600.00 since that date.

 

On 8 June 2016 you issued a final notice claiming £678.00 due in respect of the 2015/2016 account and on 19 May you issued an instalment reminder notice in respect of the 2016/2017 account claiming £467.41 overdue.

As I had paid £467.41 on 8 June and a further £234.00 on 16 June it follows that you had allocated some payments nominally made to the later account to the earlier one.

This is further evidenced by the fact that the difference between the claim of £678.00 mentioned above and the latest claim of £444.00 is £234.00, exactly equivalent to the monthly payments due in respect of the later account and perhaps deriving from that payment made on 16 June.

Given, therefore, that you had allocated some payments in this way it seems to me reasonable that you should continue that practice which, if you had done, would have cleared the 2015/2016 account entirely by now, albeit thereby leaving the 2016/2017 account in comparable debit.

 

It follows that taking the action of issuing a summons for court attendance, with attendant costs, is otiose, the payments distinction between what you treat as two distinct accounts being arbitrary.

 

My financial situation has not improved except that I've gained some income from selling personal possessions to raise funds and I'm working steadily in that and related directions.

My state pension is due on Friday 2 September and although I had then intended paying off at least a further £100, more if possible, of the outstanding debt while keeping up to date with the current situation I calculate that by using that income and by defaulting on another payment due shortly afterwards I should be able to make payment on that day for the arrears sum claimed of £444.00.

I shall therefore do that by electronic bank transfer on Friday morning so that you will have the funds later that day and I should like you in turn to withdraw the summons and cancel the claim of an additional £40.00 court fee.

 

As I've commented before, it makes no sense to add court fees and additional costs to a sum which is already difficult to meet but which I accept is due and which I'm reducing. If you're not prepared to do that, however, then please let me know because I shall then attend court to dispute the appropriateness of issuing a summons in the circumstances as partially outlined above.

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Never any harm in asking

- I've certainly had summonses withdrawn in the past for people when I worked in council tax under similar circumstances (I Curiously I haven't seen any since I became a self emplyed consultancy).

 

The problem you do have is that if they do not withdraw it then you don't appear to have an argument which would stop the summons going forward - the only argument you would have is that the summons was wrong as you'd paid the amounts due as when they had been required and therefore the summons should not have been isdued.

 

If they have allocated sufficient to clearing the instalment due for 16/17 and then allocated any excess to 15/16 then this would be reasonable unless they were instructed otherwise as to the how the monies were meant to be. The seperation of any balances is how they are required to do so - a seperate demand notice balance has to be accounted for separately.

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Apologies over the spelling above - I can't edit the post.

 

Craig / LGFA92

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Perfectly valid point although, I'd say, debatable in practice as to allocation. It's fairly standard business practice that monies received are allocated to older, undisputed debts rather than to newer ones. This isn't what's happened here - essentially the 2016/17 account is, according to their approach, up to date and in consequence of so allocating payments the earlier, 2015/2016 is adrift by the £444.00 claimed. Had that £444.00 been allocated to the older debt then it would have been cleared at least by 16 June and therefore no summons would have been issued in that regard.

 

Of course the 2016/17 account would then have been £444.00 adrift in turn but that debt, on account of other payments, would now be slightly under two months in arrears and gradually reducing (in fact on this coming Friday and because I wouldn't have paid quite as much as the £444.00, not really having that money spare) it would be down to about six weeks in arrears and that position would be maintained as I paid the September payment shortly afterwards.

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Case law has pretty much determined that in the abscence of obvious intent that payments can be allocated to the arrears

- payment of an amount which matches (or was close to) an amount shown on a reminder could also quite rightly be determined to be against that payment. Any extra payment which does not match the amount shown on the instalments could also be rightly determined to be against the arrears.

 

For council tax purposes payments will always be matched against ongoing council tax if they match a payment which is due or match the amounts shown on a notice which has been issued. Clearly that happened with the earliest payment of 8 June.

 

With the payment of 16 June then this appears to have been allocated against the arrears, which is common practice, and reduced the balance due.

 

You would be hard pressed to argue at this point that the payment of 8 June (which matched a reminder amount) was meant for the arrears and so should have stopped a summons being issued on that.

 

 

The council would be able to demonstrate that the payment matched the amount required for 16/17 and they allocated it to that year. I can't see anyway the court would accept the summons should not have been issued on this defence.

 

Craig / lgfa92

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Thanks. While I can see that argument I'd want to point out (in court) if disputed that I would not reasonably be expected to know that payments would be allocated to a later account in the event of a running debt on an earlier one. What irritates me particularly is that although it's extremely difficult for me to reduce the amount outstanding I'm succeeding in doing so, have discussed this in detail with the council, and still end up with a - to my mind - quite unnecessary additional charge of £40.00. Well, we'll just have to see what transpires.

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If the council had any sense then they'd do as I outlined earlier and state they were allocating the earlier payment to match the reminder.

 

 

I've attended more council tax courts than I care to remember and I've not seen anyone with a similar argument persuade the court that it was a valid defence and the summons was wrong

- that being said, there's no accounting for the whim of a magistrate.

 

Craig

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Thanks again. I've only been involved in three court cases ever (one a defence against Companies House, one suing a bank, and one many years ago against a lawyer house tenant) and I've won every one so maybe that's a good omen! Or maybe my luck will break, of course. As I say, we'll see, if it comes to that - but I do note your caution here and I appreciate the advice.

 

There's a further point on which I'd welcome clarification: if I pay the outstanding CTax in time (£444.00) but not the £40 court fee does that still leave open the existing court process and, if so, the possibility of a liability order's being made? I'm thinking here that if that's the case then it might be better to try to scrape up the final £40 from somewhere in order to clear everything and then argue that case later whether through a formal complaint or in some other way.

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Action can be proceeded with for costs in exactly the same way as if the balance was outstanding council tax.

 

Craig / lgfa92.co.uk

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Thanks. I suspected that would be the case and so it makes sense to try to scrape up the whole amount somehow.

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Sorry to have arrived here after your hearing date (guessing so?).

 

 

Unless specified otherwise by the payee, the payment should be applied to the most recent account.

I'd be interested to see any case law that states otherwise.

 

 

An example of this in practice here:

https://www.whatdotheyknow.com/request/300212/response/738581/attach/2/Response%20all%20information%20to%20be%20supplied.pdf

If the link doesn't work, it's in the response to IR132635

 

It says that the regulations are silent on payment allocations, and that payments are lodged against the most recent debt.

This is important as otherwise, as you've experienced, new costs are raised where they would not otherwise have been.

 

You could argue in advance of the hearing for them to re-allocate the payment, and have the summons withdrawn.

Many, many summonses are withdrawn, it's not at all unusual.

Even post liability order you can make the same argument and even if they won't revoke the order, they should remove the costs.

 

 

They should not have put you in the position of attracting court processes/costs simply by misallocating your payment.

 

Make a formal complaint.

The misallocation coupled with your evident efforts to meet your debts, and your age (vulnerability) should be persuasive.

Good luck to you!


Why aren't we revolting?

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Case law has pretty much determined that in the abscence of obvious intent that payments can be allocated to the arrears - payment of an amount which matches (or was close to) an amount shown on a reminder could also quite rightly be determined to be against that payment. Any extra payment which does not match the amount shown on the instalments could also be rightly determined to be against the arrears.

 

For council tax purposes payments will always be matched against ongoing council tax if they match a payment which is due or match the amounts shown on a notice which has been issued. Clearly that happened with the earliest payment of 8 June.

 

With the payment of 16 June then this appears to have been allocated against the arrears, which is common practice, and reduced the balance due.

 

You would be hard pressed to argue at this point that the payment of 8 June (which matched a reminder amount) was meant for the arrears and so should have stopped a summons being issued on that. The council would be able to demonstrate that the payment matched the amount required for 16/17 and they allocated it to that year. I can't see anyway the court would accept the summons should not have been issued on this defence.

 

Craig / lgfa92

 

I'd be very interested to know which case law you're referring to (especially in relation to council tax payments).

It seems to me that systems are routinely set up for allocating payments that match with a payment demand, which may make sense most of the time

- but not all of the time.

 

 

When it adversely affects the payee, there should be a willingness to make a re-allocation, unless there is a reason for someone wishing to profit or benefit from leaving things the way they are?

 

 

The court is unfortunately a difficult place to have the argument, though it should be possible to show that payments were in fact made, but misdirected = no liability.


Why aren't we revolting?

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Thanks for the comment and observations.

 

The claim that payments are ordinarily allocated to the latest outstanding amount and then, if appropriate, carried over to earlier sums due is interesting, not least because it seems directly contrary to ordinary business practice but also because it can lead to exactly the situation in which I found myself, namely that by treating the sum due to the council as a single debt gradually being reduced as possible and as broadly agreed with the council (allowing, of course, for the monthly increase/update on the continuing part) I end up with additional costs because the council has got tired of the speed of reduction and acted without further reference to me.

 

On Friday with the payment of my state pension and some funds in hand I had just enough to meet the total claim, including the £40 costs, and I then paid that, following it up with an immediate email saying what the payment was for, noting that I'd had no response to my earlier email of complaint (not formal complaint but including the requested remission of the summons charge) and copying that in, and approximately repeating that whole text in a printed letter sent that day with a certificate of posting. I've so far had no response.

 

According to my allocation statement (that payment was to meet the amount claimed in the summons) that should have stayed the liability order hearing and no further costs should have accrued. There is, however, now a possible complication arising from what you say in your comment, namely that Friday was also the day on which the next monthly instalment for the current CTax liability was due; hence if my statement is ignored and the council allocates the relevant amount from my payment the effect would be that come yesterday, Monday 5, the amount claimed in the summons would only have been partially paid, not fully as I intended and that in turn would open the way for a liability order and attendant additional costs. Needless to say I'd object strongly to that.

 

Subject to further comment and advice here I plan to allow the council the rest of this week to reply, that "reply" to include information on the withdrawal or continuation of the court hearing on Monday and a decision on withdrawing the summons fee of £40.00. Subject in turn to that I'm looking to make a formal complaint next week, probably following a telephone discussion or even a discussion visit.

 

Essentially my aim is to get back to the position where the total amount owing is brought back on track and the £40.00 is allocated as credit to CTax due. If the Friday payment is, as I intended, allocated to clearing the 2015/16 debt then that leaves just the latest, September, payment on the current account due but because the Friday payment more than cleared me out that will have to wait and be dealt with over at least two months; however, even with that outstanding I've managed to make a significant reduction compared with the situation at the start of the year and so I'll argue that I've done what I can and that the council needs to show some understanding of that and act tolerantly.

 

We'll see!

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but misdirected = no liability.

Don't fall in to the trap of confusing liability with having a charge to pay - liability is simply who is responsible for paying.

 

It seems to me that systems are routinely set up for allocating payments that match with a payment demand, which may make sense most of the time - but not all of the time.

Where it's clear that the payment matches an instalment then the council would be negligent (and wrong in case law) in not allocating to that amount (unless they've been advised otherwise).

 

The two most common cases are

R v Miskin & Stepney Corporation v Osofsky

Quick Summary: Where it is possible payments should be allocated where it is obvious that they were meant to be or debtor has advised it should be (in Miskin an amount was split over several payments but the overall total matched the balance due).

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Don't fall in to the trap of confusing liability with having a charge to pay - liability is simply who is responsible for paying..

Yes, outstanding liability for payment, I should have made that clear.

 

I'm not able to find the two cases you cite, I find it really frustrating that case law that could be applicable isn't available to the common man (i.e. held only by paid club members). I would interpret as common sense that a debtor should not be disadvantaged simply by an allocation of a payment, and all of the (non-council tax) case law that I've come across would seem to essentially support that. I've not come across any that applies to council tax, other than that there isn't anything in the applicable regulations, in which case common sense could reign supreme.


Why aren't we revolting?

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Common sense doesn't come in to it where it's covered by case law (unless a judge is looking again or interpreting the decision) - case law is binding on the council, in this case for the allocation of payments. The two pieces in my earlier post covered a payment towards a court ordered amount and a fee due to a local council (a traders licence fee I believe). It's not regarded as someone being disadvantaged if, from following the case law, a statutory obligation comes in to effect.

 

The point is though that unless the council are aware of any alternative intents then they must allocate it in line where the clear intent is - i.e. the payment that matched the reminder goes to that balance and not the arrears. As it stands though (without knowing exact dates etc) if the council had allocated all the payments to the arrears then a summons would likely have been issued for 16/17 anyway as the reminder had been issued.

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