Disputing Council Tax liability is not a defence that can be readily raised at a liability order hearing. The High Court have considered arguments regarding the granting of a Council Tax liability order on the basis they were invalid due to ongoing disputes over Council Tax liability. The High Court has in several cases however ruled that liability disputes are not a valid defence against the issuing of a liability order.
Disputing the liability of a Council Tax charge has always been a mixed bag. Some local authorities are far more willing to update their records than others. For those local authorities who are unwilling to co-operate the law is often on their side. It can be quite easy to find yourself on the way to a liability order hearing.
For Council Tax purposes the main route of appeal regarding liability disputes has always been to the Valuation Tribunal (under S16 of the Local Government Finance Act 1992). There is nothing in Council Tax legislation which prevents a local authority pursuing the disputed balance through the magistrates court whilst the appeal process is ongoing.
It is not unusual for a person to receive a court summons warning of a liability order hearing and to then state in their defence that they are not liable for the requested amount. Some local authorities still advise (incorrectly) that a liability dispute can be used as a valid defence against a liability order. There is a process which can be used to dispute liability however.
Okon v London Borough of Lewisham
An interesting 2016 High Court case (Okon v London Borough of Lewisham) involving bankruptcy was forced to consider the process of obtaining a liability order. It was disputed that the order was valid and as such it followed that the bankruptcy order could not have been legally granted.
The key aspect within Council Tax legislation which had to be considered was that of Regulation 57(1) of the Council Tax (Administration & Enforcement) regulations 1992. This regulation states that “(1) Any matter which could be the subject of an appeal under section 16 of the Act may not be raised in proceedings under this Part” .
‘This part‘ being the section of the Administration & Enforcement regulations dealing with the issuing of the court summons and the enforcement of unpaid council tax.
In considering the situation the High Court came to the conclusion that Regulation 57(1) does not allow the magistrates to refuse a liability order if the objection is for something on which a Valuation Tribunal has powers to hear an appeal. The dispute raised by Ms Okon regarding liability fell under Section 16 and therefore was not a valid defence against a liability order. Interestingly the court did agree to hold actin on the bankruptcy to allow a Valuation Tribunal Appeal to be made.
Other High Court decisions on disputing a liability order
A similar outcome to Okon was also found in the case of Wiltshire Council v Piggin where an appeal was lodged by a Local Authority against the refusal to grant a Liability Order. Read more on Section 16, Piggin and disputing liability.
Does this mean I can’t try ?
You could try and raise a dispute with the court regarding liability as a defence however it would be expected that, on the basis of the High Court decisions, that the court are likely to continue with granting the order. It may however be possible to persuade the court to adjourn the hearing if there is a good reason to do so.
Advice & 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.