Changes in Council Tax and Business Rates recovery costs

Stratford-on-Avon District Council is reminding all District residents and businesses to pay their council tax and business rates on time or risk further penalties.

This comes in the wake of the changes the District Council is making in the way court costs are incurred in the process of recovering Council Tax and Business Rates (NNDR) debts.  Since April the cost of £85 will be incurred at an earlier stage within the recovery process when a summons to court is issued.

Council Tax and business rates is normally payable by up to ten monthly instalments and the Council Tax bill tells residents how much and when to pay.  If payments are not made a reminder is sent out after 14 days asking for payment of the missing instalment within seven days. If this is not done residents can lose the right to pay by instalments and have to pay the full amount immediately.  The documentation issued also details the fact that costs may be incurred if payments are not made.

If the amounts or satisfactory arrangements are not made to pay the account the District Council will start legal proceedings to get back the money owed. A Special Payment arrangement can be set up outside the normal instalment scheme that is manageable and agreeable that gives flexibility of payment options and there are a variety of payment methods available to customers such as direct debit, debit and credit card and standing order.  Cash or cheque payments can be made via a swipe card at outlets displaying a Paypoint logo.

Council chiefs say they are committed to clawing back all public money owed by third parties and operate a firm but fair debt-recovery policy and try to make a clear distinction between cases of genuine hardship — where people can't pay — and those who won't pay and evade for personal financial gain.

Residents have a legal obligation to pay taxes before repaying other debts, such as credit cards, loans or hire purchase and all costs incurred by the council during the recovery process are included in the final amounts that must be repaid.

Councillor Valarie Hobbs, Enterprise, Housing & Revenues Portfolio said: “Stratford District Council does not tolerate council tax or business rate evasion and we are committed to using all available powers to pursue outstanding debts. The money recovered this year is crucial in helping us to protect investment in services during the testing economic climate.

“We also have a clear duty to all those residents and businesses who do pay council tax to recover unpaid money so that they do not have to make up the shortfall. While we are making every effort to pursue those people who won't pay, we also do recognise that some people have genuine difficulty in paying their bills.

“It is hoped that with the prospect of costs being incurred at an earlier stage residents and businesses will be encouraged to make payments before arrears start to build up, therefore helping them to avoid going in to debt."

Cllr Hobbs said anyone struggling to pay should contact the council immediately to discuss an affordable payment plan on 01789 260990.

The District Council is implementing this change bringing it into line with most other Local Authorities and provides a consistent approach across Warwickshire.

Court costs were previously incurred when residents or ratepayers failed to maintain payments despite reminder notices being issued. In order to proceed with the recovery of Council Tax or Business Rates the Council made an application to the Magistrates Court to obtain a Liability Order. Once the Liability Order was granted the Council added a charge of £85.00 to the residents or ratepayers account. This charge covered the cost of the additional work undertaken by the Council in recovering outstanding debts.

From 1^st April 2011 the cost of £85 is incurred at a slightly earlier stage within the recovery process, that is, when a summons to Court is issued (agreed by Cabinet in April 2011).

The costs associated with taking a case to court start from the issue of a summons to the formal submission to the Court of all those who have Council Tax or Business Rate arrears. Therefore the new arrangement more accurately reflects the administrative overhead.

Stratford District Council's current collection rate is:

• 98.72% - 2010
• 99.60% - 2009
• 99.77% - 2008

With the balances subject to special arrangements or ongoing recovery action.