Council Tax recovery policy
This page was last reviewed on 1 November 2021.
We are committed to collecting the Council Tax to ensure that the money is used for the benefit of all residents of the borough. If you do not pay your Council Tax, we will have to take further action to recover the money you owe. Our recovery policy lists all the steps we will take, together with the costs these will incur.
Purpose of the recovery policy
We recognise that the majority of Bury residents pay their Council Tax promptly. We use this money to provide essential services to local people.
This policy exists to explain how we will collect Council Tax debts so that:
- people who owe money know what is happening and why, and;
- people who pay their Council Tax promptly have confidence that we are committed to recover money owed to us.
- promote easy payment methods and payment dates, to prevent recovery action being necessary
- explain at every stage of the recovery process why action is being taken and what will happen if the debt is not paid. This information will be provided in the documents we send requesting payment. A summary of all our recovery methods (this document) will be published on the Bury Council web site. It will be in clear and simple terms and will not resort to legal jargon. We will provide free internet access to access this information. Paper copies of all recovery policies will be available on request
- ensure that before we start a recovery process with serious consequences, we have exhausted all other methods of debt collection
- publicise debt advice to all charge payers not just those with arrears, to help those in financial difficulty before arrears build up
- work with debt advice agencies to reach a repayment agreement
- ensure that we take account of vulnerabilities and that recovery measures are proportionate to a person's circumstances
- treat individuals consistently and fairly, regardless of age, gender, disability, race and sexual orientation
- review this policy annually. If there are changes in legislation relating to Council Tax that affect the recovery process the policy may be reviewed as their effects become apparent.
This policy relates to collection of Council Tax. This money is collected by the Resources and Regulations directorate of Bury Council.
The recovery process is split into three parts. These are explained in detail in the policy statements later in this document.
The first part, up to and including granting of a liability order, is based on statutory legislation. This means that we follow the same processes for all residents and these are set out in government legislation. These processes are the same wherever you live in England.
The granting of a liability order by a Magistrates Court allows us to use more specialised recovery methods. These are tailored to an individual's circumstances, and form the second part of the recovery process.
If these recovery processes are not successful we will be forced to consider the options of last resort set out in the third stage of this policy.
Our recovery measures get more serious the longer you avoid or ignore our attempts to contact you. The easiest way to resolve the situation is to speak to us, discuss your debts and make a payment arrangement.
Arrangements will take into account the affordability and sustainability of payments. Wherever possible we attempt to recover a debt within the financial year it relates to. This prevents debts building up and being carried forward to subsequent years. Where this is not possible, we will try to reach an agreement that allows the payment of the continuing liability plus an affordable amount off any arrears.
Stage 1: Recovery processes up to and including liability order stage
Bills are sent annually in March each year for the following financial year, starting in April. We also send out amended bills throughout the year where there have been changes to accounts.
Each bill is due to be paid in monthly instalments. There are various payment dates, and options to pay by 10 or 12 monthly instalments.
We promote direct debit. This is the most efficient form of payment for the council and for customers. Other forms of payment are available. You have the option to change payment dates and payment methods to find the most suitable combination for your circumstances.
If you miss an instalment, we will send you a reminder notice. This gives you 14 days to pay the overdue amount.
If you bring your account up to date following receipt of a reminder, but then miss a future instalment, we will send you a second reminder. This again gives you 14 days to pay the overdue amount.
If you miss a third instalment we will send you a final notice. This will request that you pay your full annual charge within 7 days.
If your account was due for payment in full in one instalment and the amount due has not been received we will send you a final notice. This will ask you to pay the full amount within 7 days.
Summons & liability orders
If you do not respond to a reminder or final notice, we will request a summons from the Magistrates Court. If you respond to the final notice by paying one monthly instalment, we will still issue a summons for the remaining balance. We will add the cost of raising the summons to your bill.
If the Magistrates accept that you owe the debt, and that we have followed the correct recovery action then they will grant a liability order. A liability order allows us to take the further recovery action listed below.
Stage 2: Recovery processes beyond liability order stage
Request for financial information
Once we have a liability order a letter will be issued asking you to tell us about your income and expenditure. This is your opportunity to let us know if you have any special circumstances which we need to be aware of.
Attachment of earnings
If you are working we can ask your employer to take money from your salary or wages to pay your debt. The amount they take depends on how much you earn. The liability order means that your employer has no option other than to make the deductions. The amount of the deductions is set by the government.
Your employer can deduct a further £1 each time they send us a payment, for their administration costs.
Deductions from benefits
We can ask the Department for Work and Pensions to make deductions from your Universal Credit, Income Support, Jobseekers Allowance or Employment Support Allowance.
The amount of the deductions is set by the government and is currently £3.70 per week.
Attachment to Members Allowances
This option only applies to elected Members. If a Councillor has not paid their Council Tax, up to 40% of their allowances can be claimed to clear the debt.
Actions by bailiffs/enforcement agents
In 2014 the government introduced new laws to regulate the work of debt collection companies. The new laws refer to debt collectors and bailiffs as 'enforcement agents'. In keeping with these regulations we now use this term to describe debt recovery companies we employ.
All enforcement agents we employ are certified through the County Court and follow a national code of conduct. A summary of the fees they charge can be found in Appendix 1
We will instruct enforcement agents to collect your outstanding Council Tax debt if you:
- fail to complete and return the request for financial information form; or
- make a payment arrangement and do not make the agreed payments; or
- return your request for financial information form but we cannot make an attachment to your wages or benefits, and you do not make a repayment arrangement with us.
When enforcement agents receive our instruction, they will contact you by letter or phone asking you to either pay in full or contact them to discuss a suitable payment arrangement. When they receive our instructions, they will add a set fee to your debt.
If you ignore the contacts from the enforcement agents, they will visit you at your home or business address. This visit will incur a further set fee. They will not add further costs for additional visits.
When the enforcement agent visits you, they will ask for payment in full, including all their costs. If you cannot pay the amount due in full immediately, they may agree a payment arrangement. To provide security the enforcement agent will make an inventory of goods that can be sold to repay the debt if you do not keep to your arrangement. This is called a 'controlled goods agreement'.
If your goods are subject to a controlled goods agreement, you cannot move or sell them without the enforcement agent's permission.
If you fail to pay as arranged and you have signed a controlled goods agreement, the enforcement agent may re-enter your property, using force if necessary, to take the goods listed on the inventory. You will be charged a sale fee if goods are removed and sold plus other costs such as auctioneer's fees. This can add a significant amount to the costs that you will be liable for.
If a debt has been passed to enforcement agents and you pay us without including their fees, then they will continue to recover their costs from you.
If the enforcement agent cannot identify sufficient goods to clear the debt, or cannot gain lawful entry to your property, they will send a certificate to us to confirm that they have been unable to recover the debt. We will then consider one of the remedies detailed below in stage 3.
Stage 3: Final recovery options
The following recovery options will only be considered if the remedies above have proven ineffective. Before we consider one of the following three options we will have:
- confirmed that your liability for Council Tax is correct
- made all reasonable efforts to check that you are not entitled to any discounts, exemptions, reductions or benefits
- made all reasonable efforts to contact you by letter, phone, e-communications or visits to your address
- provided contact details of free independent debt advice agencies
- investigated your financial situation by checking the following:
- any Council held records, including any history of payment arrangements or payments received
- HM Land Registry records
- a credit reference agency, for information about outgoings and requests for finance, credit or mortgages
- Council house sales records
- any known or potential employment details
- Companies House records.
All of the following recovery options are expensive and we will consider the relationship between the size of the debt and the amount of costs that will be incurred.
In addition, we will also consider if the recovery option is appropriate due to the following factors:
- as a result of age, severe mental illness, disability or extensive learning difficulties you cannot be expected to deal with your own affairs
- whether you are a single parent of young children or the main carer for a disabled dependent person
- whether you are in receipt of Council Tax Support
- any other circumstances which you believe are exceptional and affect your ability to pay your debt.
In all cases, we would advise you to seek independent legal advice if we contact you about any of the three following processes.
We may decide to take insolvency/bankruptcy action against you in the County Court if the total debt you owe us is more than £5000. If the Court declares you bankrupt you could lose your home and possessions to pay the debts and have to pay significant additional costs on top of the debt owed to us.
We will send you a letter warning of the proceedings we are going to take and give you a last chance to pay. If you do not pay the full amount outstanding including costs or agree an acceptable payment arrangement, we will serve a Statutory Demand on you. This is the first formal stage in a process that may lead to bankruptcy.
If you do not pay the full amount outstanding including costs or agree an acceptable payment arrangement after the service of a Statutory Demand, or if the court does not set your case aside, we will then serve you with a bankruptcy petition.
The Official Receiver will then be appointed and you will no longer have control over your assets. You may find it extremely difficult to obtain credit in the future.
If the combined balance of your debts owed to us is over £1000 and you own a property we can apply to the County Court for a charging order to be placed on it. This is similar to a mortgage and affects your credit rating. You will also incur additional costs and court fees.
If a charging order is granted it gives us two options:
- recover the debt and interest from the proceeds of sale if the property is sold at a later date or
- ask the County Court to evict you from the property and enforce its sale to recover the money owed.
We will only consider this option if there is sufficient equity in your property to pay your debts when it is sold.
Committal to Prison proceedings
We will only consider committal proceedings if all other avenues of recovery have been considered and discounted. This means that we ask the Magistrates Court to decide whether to send you to prison for not paying your Council Tax.
If enforcement agents have been unable to remove goods to pay for your debt, or if we think other recovery options are inappropriate, we can send you a magistrates Court summons to attend a committal hearing.
At the hearing, you will be asked questions about your income and expenditure and the reason(s) why you have not paid your Council Tax bills.
The Magistrates Court will consider if you are guilty of either:
- refusing to pay, when you could have done, known as 'wilful refusal' or
- not taking appropriate action when you were billed, and recovery action was being taken, known as 'culpable neglect'.
At the hearing, the Magistrates may sentence you to a term of imprisonment of up to 90 days. The sentence can be suspended on whatever terms the Magistrates consider appropriate. Usually this would be an agreement to pay a weekly or monthly amount. If the Magistrates decide that failure to pay was not due to wilful refusal or culpable neglect they have the power to write off all or part of the debt.
If you do not appear in court, we will ask the Magistrates Court to issue a warrant for your arrest with bail. This means that you will be arrested and bailed to appear in court at a later date.
If you do not appear at court after being bailed, we will ask the Magistrates Court to issue a warrant for your arrest without bail. In this case, you will be arrested again taken into police custody or straight to the Magistrates Court.
Appendix 1: Costs
We charge fees because it costs us to take legal action to recover debts. These costs are added to your Council Tax debt. We then recover them together with your original debt.
The costs we charge are made up of payments we have to make to either the Magistrates Courts or County Courts, and what it costs us to carry out the recovery work.
External companies such as Enforcement Agents charge their own costs, which are payable to them. Enforcement Agents are regulated and have to charge the same costs.
|Type of cost||Amount|
|Enforcement agent compliance (on receipt of our instructions & making contact with you)||£75|
|Enforcement agent visits (one fee is charged regardless of the number of visits)||£235 plus 7.5% of any balance over £1,500|
|Enforcement agent sale of goods||£110 plus 7.5% of any balance over £1,500|
|Bankruptcy petition||£1,292 plus service expenses and costs assessed by the Court|
|Winding Up Petition||£1,902 plus service expenses and costs assessed by the Court|
|Warrants of Arrest||£100|