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fraudThe Ministry of Justice have confirmed that they have inadvertently been overcharging Local Authorities in respect of the application fee charge for a Liability Order since 2013/14.

Where a Local Authority make an application for a Council Tax Liability Order under the Council Tax (Administration and Enforcement) Regulations 1992 the Local Authority must pay an administrative fee to the Ministry of Justice. Fee 4.1 of Schedule 1 to the The Magistrates’ Courts Fees (Amendment) Order 2014 sets the fee due to the court for a Liability Order application to £3.00.

It has recently become apparent to the Ministry of Justice that the fee of £3.00 has been charged incorrectly as the rate which was set for the application costs should have been set to 50p, to reflect the actual costs which were incurred.

A BBC press report suggests that the Ministry of Justice will look at refunding the excess fees to the Local Authority however it appears that nothing has, as yet, been reported on whether or not a Local Authority will refund these monies to the Council Tax payers.

Following on from the 2015 case of Nicholson the High Court held that a Local Authority must be able to demonstrate to the Magistrates’ Court that “the costs claimed represented costs reasonably incurred by the Council in obtaining the liability order”. This would suggest that, at least going forward, a Local Authority must either drop their costs by £2.50 or be able to justify the effective £2.50 increase in the costs that they are claiming.


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