Are council tax demands too heavy-handed?

First Published by: Confused.com

Council tax is the only household bill that can land you in prison for non-payment. Yet despite this threat, plenty of us still pay it late.

Some 36 per cent of householders who admitted to tardy bill behaviour said council tax was the one they most often fell behind with, according to a survey of the nation’s spending habits by discount website MyVoucherCodes.

This is followed by mobile phone (31 per cent), gas and electricity (29 per cent), rent/mortgage (17 per cent) and TV/phone/broadband (13 per cent).

Lack of funds

In what seems to be a sign of the times, the poll of 1,357 people found that the majority of those paying bills late simply did not have the money.

Mark Pearson, chairman of MyVoucherCodes, said: “I was quite surprised that council tax was the bill most commonly paid late by Brits, because that’s really the one that can get you in the most bother.

Law and order:

Not sure how serious the council are with threats of imprisonment over missed bill payments? Well, here’s my story, where I was recently at the receiving end of a Council Tax demand.

I missed a payment through simple forgetfulness (I’d recently moved, set up direct debits for all my bills but somehow forgot to do so for Council Tax), and around one month later I received a letter not just demanding payment, but also threatening to withdraw my right to pay in instalments if I failed to clear the arrears within seven days.

Ignore this letter at your peril: after this, there are no more reminders, just a court summons. Yes, you’ll be asked to appear before your local magistrates court to answer for your crime.

Court summons:

This seems a heavy-handed approach to dealing with a debt that for many people has accrued because they can’t afford the bill. 

I faced this situation myself as a student. I failed to keep up with the monthly payments and the council in question reacted by withdrawing my right to pay by instalments, swiftly followed by a court summons when I failed to pay the full year’s bill in one go.

Trying to come to an arrangement with the council at this point proved impossible as it refused to reinstate my monthly instalments.

Desperate to avoid court, I was sufficiently scared into admitting my money problems to a sympathetic friend who lent me the cash to clear my debt.

Good practice:

I was lucky that I had a friend to help out. But Iooking back, I feel the council could have been more helpful. It was this sort of heavy-handed approach that led debt charity Citizen’s Advice to issue councils with a good practice guide in 2009, to ensure better Council Tax arrears collection practices.

But even now, the very first letters householders receive if they miss a Council Tax payment is a demand for the bill to be paid within seven days or have the right to pay in instalments withdrawn. Surely this can’t be the right approach? Especially as council tax debt isn’t a problem that’s going away.

Last year Citizens Advice Bureaux in England and Wales dealt with almost 170,000 problems involving Council Tax debt, an increase of 6 per cent on the year before.

Are you paying too much Council Tax?

WE SHOULDN’T LET OUR COUNCILS CHEAT US OUT OF £25 BILLION A YEAR

First Published by: The Telegraph

"We froze council tax this year", boasted David Cameron in his speech last Wednesday, "and we are going to freeze it again next year too". 

But, by talking only of Council Tax, Cameron has managed to hide from us is what has become one of the best-kept secrets of British politics. This is the fact, writes Booker, that increasingly in recent years our bloated local authorities have found alternative sources of income which are now earning them as much as they get from Council Tax.

Building on our work, he brings to a wider audience the developments from 40 years ago when the most obvious source of council revenue was the rates, topped up by grants from central government - in return for which we could expect all the services which councils provided.

Largely below the radar, councils have now discovered all sorts of other ways in which they can take money off us, by levying charges, fees and penalties for countless things which used to be free or at least very much cheaper – some of which are actually illegal.

We have become familiar, for instance, with the practice whereby we must now pay for planning applications. I think it would come as a surprise, though, to anyone not familiar with the system that you can find yourself having to pay anything from £150 for a garden shed to £250,000 for a large housing estate.

Of course, we all know about the cost of parking fees and penalties, which earn councils £2 billion a year, and businesses must now pay councils billions to have their waste collected, while tipping fees have gone through the roof.

But what most of us are less familiar with is the proliferation of new licensing charges for everything from pet shops to car boot sales, from riding establishments to "sex establishments" (up to £9,935, plus a yearly renewal fee of £5,000). 

Pubs which used to pay a yearly £10 to the local magistrates for their licence, must now pay up to £1,905 to the council (plus £23.50 to notify the council if the landlord dies). Big pop festivals must pay £64,000 for a licence, even before they pay hundreds of thousands more to hire the police.

In 2007 the Lyons report on local government found that more than a quarter of councils were already earning more from such charges than they were from Council Tax, and this has now risen to the point where "sales, fees, charges" and "other income" now yield £25 billion a year, much the same as Council Tax.

Most of these alternative sources of revenue are sanctioned by central government, but in some instances the "dash for cash" has led councils into activities which are outside the law. 

This is the Summonses and Liability Orders scam, where under the CouncilTax (Administration and Enforcement) Regulations 1992, councils are only permitted to impose "costs reasonably incurred" for the issuing of these orders, which must also under the law be charged for separately.

Booker picks up on one council admitting that the cost of issuing a Reminder Notice, which precedes them, can be as little as £1.22. Yet, as we know, Bradford council charges £80 for issuing the two further documents, which, using the same computerised process, involve no more work than sending out the Reminder. 

Many other councils, quite illegally, impose a combined charge of up to £100 for issuing both documents - even though, if the debtor pays in full on receiving the Summons, the Liability Order is not necessary.

In the column, Bradford details spill out, but with 21 verified FOI responses now in, the city remains firmly lodged at the top of our "greed index". The point is made. Now at last, says Booker, we may begin to understand how these "lords of the town halls" can afford to award themselves salaries which make them some of the highest paid people in Britain today. 

Nevertheless, these charges will be their undoing. Their greed has got the better of them. 

Are you paying too much Council Tax? 

DESPERATE TIMES HAVE NOT LED TO TRANSFORMATION OF PUBLIC SERVICES

First Published by: The Guardian 

Where are the managers and elected leaders thinking great thoughts about changing the way services are delivered? 

The age of austerity has not transformed the public sector. Indeed, on the eve of a budget that will affirm the squeeze on public spending and may extend the period of pain high up towards the end of the decade, its remarkable how little has changed.

Job ads are scarce, pay is constrained, pension contributions increased, libraries have closed and regional development agencies have been abolished. But a dispassionate account of the culture, expectations, personnel and – yes – spending habits of the public sector would have to conclude that not a huge amount has altered.

It's worth noting just how familiar today's landscape remains. Whitehall departments are all still there, with their permanent secretaries and their silo mentalities. The marksmen on the quango cull gave up halfway, leaving some of their victims flapping half alive on the ground.

Shire districts are as numerous and dysfunctional as ever. But, on the insistence of communities secretary, Eric Pickles, they are still emptying the bins once a week. If they are an impediment to rational and cheaper local government, no one is doing anything about it. Very few types of council have scrapped their chief executives and taken on their neighbours'. Contracting out services remains marginal, and even the eventual passage of the health and social care bill may not change that.

So far, then, the basic shape of things looks the same as it did. The public sector still employs nearly 6 million people. At 2011's rate of attrition, it could still keep going for another 22 years. Spending is now below where it was when Labour started to turn on the tap in 2001, but social care spending this year is still two-thirds more than it was then, in real terms. 

Adjusted for inflation and expressed in 2011's money, councils in England spent £2,756m on environmental services in 2001-02 compared with £4,239m last year. Bins, waste disposal and so on in fact cost more last year than in 2009, the year the cuts came in.

Acknowledging that the sky has not yet fallen in, one school of thought says, just wait. "Fiscal consolidation" – largely meaning cuts in public spending – is the one policy that defines the Cameron government, so George Osborne will stick with it: the public sector will go on getting less in real terms till the 2015 election. The spending review later this year for publication in 2013 will push the pain beyond the election, to 2017. 

There is no way, say those "transformers", who predicted that cuts would lead to service redesign and a "new compact" between citizen and state, that councils and other public bodies can cope with successive real cuts in spending without fundamental changes – including profound adjustments to what the public expects local authorities and the state at large to provide.

But the transformers have to face the fact that, so far, none of that has happened. Looking at both central and local government, you simply don't see either political or managerial leaders thinking great thoughts. Instead, they have muddled through.

And, so far, pragmatic "decrementalism" has worked. A few councils have put up their council tax by a small proportion but we have just gone through the budget-making season in local authorities without blood on the carpet or scuffling in the corridors. Ironically one of the highest profile casualties of fiscal stress has come from a Tory local authority – Westminster, which wanted motorists to subsidise residential Council Tax payers.

It's easy to conjure nightmares. If the euro zone slides, if growth does not resume, if the ratings agencies turn on the UK … But short of Armageddon, the British public administrator's appetite for getting by – a taste shared by most councillors and a good few ministers as well – will ensure there is no "transformation". Instead, we will see more chipping away and public managers using their imagination to devise Heath Robinson contraptions to keep the show on the road.

Are you paying too much Council Tax?

Budget 2012: Council tax process ‘regressive’, IFS claims

First Published by: LocalGov

The Institute for Fiscal Studies (IFS) has urged ministers to overhaul the 'regressive' basis for setting Council Tax levels.

Addressing a post-Budget briefing, IFS director Paul Johnson today branded Chancellor George Osborne's Budget 'a hotchpotch of reforms (which) bears as many marks of political expediency as it does of strategic reform'.

 

Mr Johnson said: 'We must one day surely move away from basing council tax in England and Scotland on 1991 values and stop charging it in a way which is dramatically regressive.

'There is a strong case for charging more tax on expensive properties. Stamp duty is the wrong way to do it.'

Carl Emmerson, deputy director at the IFS said a £5.5bn under-spend by Whitehall departments was due to civil service mandarins looking ahead to future Budgets and seeking 'to get ahead of the game' and have less to do after April 2012.

To maintain the current annual 2.3% rate of central government spending cuts, Mr Emmerson said Government would have to enforce welfare cuts equivalent to £8bn in today's terms.

Such a reduction would be equivalent to 7.5% of non-pension welfare spending, he added, and could only come by reducing eligibility of certain social groups to entitlements such as tax credits, housing and council tax benefit.

Are you paying too much Council Tax?

FIVE WAYS TO SAVE ON … COUNCIL TAX

First Published by: The Guardian

1. Challenge your bill

Your valuation band determines how much you pay. In England and Scotland these bands are based on the property's value in April 1991. Some of the calculations were inaccurate, leading to thousands of homes being placed in the wrong bands and their owners paying too much Council Tax. 

Query your banding by contacting Rebates UK Claims and Services Limited, complete their on-line application for a quick response.

If you think there's a discrepancy – perhaps you're in a higher band than neighbours in a similar property – you may have a case to challenge. If your property is found to be in the wrong band, you could be due a rebate for the extra Council Tax you have paid over the years.

If you disagree with the decision, you can appeal, within three months, to the valuation tribunal service.

2. Claim council tax benefit

If you're on a low income (below £16,000) or you live with another adult (not your partner) who's on a low income, you may be able to claim council tax benefit or second adult rebate. People­ on low incomes can get a reduction or even be exempt from the bill.

As a rule of thumb, if you're entitled to income support, income-based jobseeker's allowance or guarantee pension credit, you're likely to get help with your council tax.

You might also be eligible for a second adult rebate, which can reduce your council tax bill by up to 25%, if the other adult you live with is on a low income, on income support or claiming jobseeker's allowance.

A booklet explaining council tax benefit is available from post offices, Jobcentre Plus and social security offices. Other people who may be able to get money off their bill include the disabled, carers and the mentally ill.

3. Live alone

If you live by yourself in a property as your main home, you're entitled to a single person's discount of 25%. Claim this from your local authority if you don't receive it automatically on your council tax bill.

If you get this reduction by living alone, you won't lose it if someone under the age of 18 (or 19 if still in full-time education) comes to live with you, such as a grandchild. Nor will you lose it if certain categories of adults move in, including students and student nurses.

4. Pay up on time

Council tax is billed annually in March or April by your local authority and most ask you to pay in 10 monthly instalments. If you think the bill is wrong, tell your council immediately, but don't stop paying the amounts set out on your original bill until the council agrees and sends you a revised one.

If you have a problem paying your bill, contact your council and ask if it can help, perhaps by rescheduling payments. However you mustn't ignore the bill completely. If you miss payments and fail to agree, in writing, any alternative arrangement with your council, it may take legal recovery action which could increase considerably the amount you have to pay.

5. Find out if you're entitled to any exemptions

Some properties are exempt or qualify for a discount. These include empty, unfurnished properties, which can be exempt for up to six months, while unoccupied dwellings undergoing major repairs to make them habitable are council tax-free for up to a year.

Also exempt are properties left unoccupied because the person who lived there has moved to receive personal care – whether to a hospital, care home, relatives or elsewhere – and properties left unoccupied by someone who has moved to care for another person.

Furnished second or holiday homes are liable, but councils are obliged to offer a discount on second homes of between 10% and 50% because no one lives there on a permanent basis.

In some special cases the owner, not the resident, has to pay the council tax for a property. Become a monk or nun, for example, living in a religious community with no personal income or capital, and you won't have to pay the tax.

Are you paying too much Council Tax?