The law surrounding Council Tax Liability Orders is written in a way which makes it easy for Local Authorities to issue the orders in bulk to aid with the collection of arrears. It is not written for the benefit of the debtor.
How is a Liability Order applied for ?
Where Council Tax arrears have remained unpaid after a Reminder Notice or Final Notice has been issued then a Local Authority can issue a Court Summons for non-payment. This Court Summons will give 14 days notice that a hearing will be held by a Magistrates’ Court to consider the granting of a Liability Order.
The Granting of a Liability Order
The Council Tax (Administration and Enforcement) Regulations 1992 allow the Magistrates’ Court to grant a Liability Order only where a Court Summons has been issued and the total balance (inclusive of any costs due) has not been settled in full. The Liability Order application can (and usually does) include additional costs incurred by the Local Authority.
The Local Authority will provide the court with a list of each of the debtors for whom a Court Summons was issued and for which a balance is still outstanding. As part of this application the Local Authority must state to the court that the process has been followed correctly and that they are not aware of any issues with this. Providing the required proof is provided then the Magistrates have little power to refuse to grant the Liability Order – no consideration as to means to pay or of any disputes over liability,discounts or exemptions etc. can be given by the Magistrates.
There are very few valid defences which can be used against the issuing of the liability order. One common defence is to argue that Court Summons was not issued within 6 years of the monies becoming due – 6 years being the limit set in Council Tax legislation.This defence usually fails to consider that the 6 year limit applies from when the original demand notice was issued, not from when the monies were originally due (a subtle difference but monies cannot be due until a demand notice has been issued, even if this is several years later).
Once a liability order has been granted the local authority are authorised to pursue collection of the outstanding balance using either a payment arrangement or one of the enforcement methods provided for in the Council Tax (Administration and Enforcement) Regulations 1992.
Council Tax recovery methods
Following the granting of a Liability Order the Local Authority gain legal powers to recover the balance which is shown on the order. Recovery options are laid out under Regulations 36 to 51 of the Council Tax (Administration & Enforcement Regulations) 1992 (as amended).
It should be noted that the Local Authority can issue a debtor with a request for information form – in most cases you must provide this information as failure to comply can be subject to a court fine.
Assistance from LGFA92
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This article is solely the view of LGFA92, the Council Tax experts, based on our interpretation of legislation. Your local authority is free to dispute this view. A binding decision may require the intervention of a valuation tribunal.