Council tax summons cost unreasonable expenditure

[Cyrus16]

I have received 2 court summons this year due to confusion about what I owe in council tax. I cleared the tax arrears and court costs for last summons before a liability order was issued. I have paid the tax arrears on the new summons but plan to challenge the summons costs because I think they are excessive and in contravention of regulation 34(5)(b) of The Council Tax (Administration and Enforcement) Regulations 1992.

I asked the council for a breakdown of summons costs, which I have provided below in text because I can’t upload attachments. It includes allowances for office furniture, and “advertising and publicity”, which I don’t think are reasonable expenses for issuing a summons. It also includes the wages, pensions, eye tests etc. of the revenues department, and allowances for other services in the council. Travel expenditure seems to have been listed twice.

The council have been trying to deter me from attending court, but they haven’t responded to my appeal.

I would like to know what my next steps are, whether I have to inform the court that I intend to challenge the court costs, and how I can make representations to a magistrate.

Many thanks.

——————

CANNOCK CHASE COUNCIL. & STAFFORD BOROUGH COUNCIL

SHARED REVENUES AND BENEFITS SERVICE


COUNCIL TAX & BUSINESS RATES RECOVERY COSTS 2019-20


COST OF MAINTAINING A RECOVERY SERVICE :

STAFFING - EMPLOYEE COSTS - revenue team - £785,450

TRAVEL - £3,510

SUPPLIES & SERVICES -
IT, PRINTING, STATIONARY, POSTAGES ETC. - £297,450

SUPPORT SERVICES - Recharges - £286,100

Total Costs - £1,372,510



) ASSOCIATED COST OF :

Recovery

50%

Est 50% attribuatable to time taken to:

Ascertain correct liability details

Print and Issue recovery documents

Deal with enquiries

Make and manage payment arrangements

Attend Court

Total Rec Costs - £686,255



ANTICIPATED NUMBER OF SUMMONSES TO BE RECOVERED IN 2019/20
Based on average of last 3 years - 7,100

ESTIMATED COST PER CASE -
£686,255 ÷ 7,100 = £96.66

PAYMENT TO COURT - £0.50

COST PER SUMMONS - £97.16

) Costs to be retained at 2018-19 level plus 2% - £95

——————

STAFFING

Salaries - £549,240

Employers NI contribution - £41,540

Employers Superannuation contribution - £92,020

Agency Staff - £0

Pension past deficit pyt - £94,360

Holiday Pay C Fwd - £0

Insurances - £3,440

Training - £3,550

Professional Subscriptions - £720

Eye Tests - £580

STAFFING - SUB TOTAL - £785,450



TRAVEL

Car Allowances - £3,510

TRAVEL - SUB TOTAL - £3,510



SUPPLIES AND SERVICES

Office Equipment & Furniture-Purchase - £17,100

Specialist Equipment Purchase - Networks - £28,250

Printing & Stationery - £19,420

Publications - £660

Envelopes - £1,230

Postages - £29,990

Telephone-Direct - £14,220

Telephone-Central Allocation - £820

Telephone - Networks - £380

Computer Services Recharge - £53,420

Travel/Subsistence - £700

Subs To Outside Organisations - £3,810

Advertising & Publicity-Non Exempt - £1,630

Hospitality - £30

Legal Costs - £11,570

Professionai Fees - £60,320

Audit Fees - £2,100

Bank Charges - £1,670

Support Contracts - £60,130

SUPPLIES & SERVICES - SUB TOTAL - £297,450



RECHARGES

Civic Centre - £25,980

Strategic Management - £32,460

Corporate Finance - £410

Audit, Risk & Bus Cont Service - £18,570

Human Resources - £9,820

Planning Management and Support - £16,010

Admin Buildings - £2,060

Revenues & Benefits - £166,220

Council Wide Initiatives - £4,910

Planning - £9,670

RECHARGES - SUB TOTAL - £286,100



TOTAL - £1,372,510

[islandgirl]

If you get to court then you have the right to have your case heard by the magistrates. The Council will also have the right to put their case. The magistrates will decide the outcome. We will have say 70 cases to hear, some will be cleared up in the corridor prior to court, most will be signed off, very few people will actually come into court.
That said, I don't know how you would get to court. The council bring the cases for overdue council tax. You have none overdue. I have no idea how your case would get before the mags?

[Cyrus16]

The council bring the cases for overdue council tax. You have none overdue. I have no idea how your case would get before the mags?

I built up some arrears for 2022/2023, and 20223/2024 because I used to receive 100% care leavers discount and hadn’t realised this had ended. So I didn’t clear the balances until after the summons were issued, but before it went to court.

To complicate things more I am currently self employed so my support changes based on what I earn. So it’s been difficult to find clarity from the council over what I owe in total, and what payments I need to make. For instance, I might make a payment to clear arrears one month, but the next month they’ll say there has been an overpayment of council tax support and I will have to pay a few more hundred. With this it’s been difficult keeping track of the tax years I owe as well as the payments I need to make towards the current year.

[islandgirl]

I doubt they will bring you to court without a full statement of arrears - contact them and get one. Get your local councillor on the case - I am one. That is what we are for. If you owe money and do not pay, then they will bring you to court and you have a right to speak.

[Cyrus16]

I actually got my local councillor involved and they visited me yesterday, but they didn’t seem to understand the regulations that summons costs have to be reasonably incurred.

They insisted that the court sets the costs and I would have to pay. I explained that the council had sent me a summons cost breakdown with questionable expenses. They refused to look at the document and insisted that this is actually a breakdown of what council tax pays for, which was incorrect.

To give them credit, they spoke to the council to clarify what payments I have to make but didn’t get anywhere to address my main concern about the summons costs.

[PallasAthena]

Looking at this from a different angle, why do you think the costs calculation is unreasonable?

It looks to me as if they have simply added up the total cost of running the 'Council Tax and Business Rates Recovery Service' including both direct and overhead costs and then divided by the anticipated number of summons to be issued in that year to get the average cost of issuing each summons. That would be a standard accountancy approach and isn't obviously wrong under regulation 34(5)(b) of The Council Tax (Administration and Enforcement) Regulations 1992.

Travel hasn't been included twice. At the start of the list there is a summary of the costs of the department totalling £1,372, 510, then further down the list those costs appear broken down into more detaili, also totalling £1,372, 510. So Travel appears in both breakdowns of cost..

I don't know what "Advertising & Publicity-Non Exempt - £1,630" is, you could ask them. Probably to do with the council publicising how the court process works if you don't pay your CT.

Eye tests is likely to be a staff health and safety expense under the Health and Safety (Display Screen Equipment) Regulations which employers are legally required to pay.

Staff have to sit somewhee to work so furniture is needed and has to be replaced.

Pensions is part of pay so an employment cost.

None of these things seem to be unreasonable in principle. It's your right to challenge them of course if it gets to court but I would expect a court to find these to be "costs reasonably incurred".

[Cyrus16]

why do you think the costs calculation is unreasonable?

in Nicholson vs Tottenham magistrates court, the high court outlined that a magistrate must be satisfied that:

• the local authority had actually incurred those costs
• the costs were in relation to obtaining the liability order
• it was reasonable for those costs to be incurred

According to Shelter UK:

Reasonable costs include the cost of the application, staff costs as part of the enforcement step, the administration cost of the final notice, and any legal fees in respect of the summons.

Costs such as investigations prior to the decision to enforce, as well as the cost of the council tax department generally, are not applicable.

I just don’t see how some of these expenses were reasonably incurred, especially advertising and publicity, and general recharges for other departments in the council.

Pensions is part of pay so an employment cost.

From my understanding the summons cost isn’t there to cover their retirement, it’s to cover costs reasonably incurred by the council from issuing a summons, and not costs for the tax department in general. They would be paid a pension regardless of any summons.

[PallasAthena]

...it's to cover costs reasonably incurred by the council from issuing a summons, and not costs for the tax department in general..

According to the summary statement it isn't the costs of the whole tax department, only of the part that deals with "recoveries". You are misquoting the regulation. It isn't limited to recovery of costs for issuing the summons, it's for costs reasonably incurred "in connection with the application".

In my opinion the calculation the council have done is correct in principle and nothing in the case you quote contradicts that. But whether I agree isn't important, it's not me you have to convince. I am just pointing out that if you do manage to get in front of magistrates to put your argument about the costs calculation it is not self-evident that your argument is correct and would be upheld in court.

[Cyrus16]

In my opinion the calculation the council have done is correct in principle and nothing in the case you quote contradicts that.

In fairness, you said yourself that you didn’t know what advertising and publicity would be for. The council has to make these things clear to show how they were reasonably incurred otherwise it looks like they’re making figures up.

The revenues team doesn’t work exclusively on court summons / liability orders and a lot of the work is automated. It wouldn’t be reasonable to take their entire salaries, pensions, office equipment etc. and average them out between summons issued. The same goes for the “recharges” which covers other unrelated departments in the coucil.

[PallasAthena]

I said correct "in principle". Not that every single item was correctly allocated.

Getting the council to prove that the whole team work on nothing but the applications covered by s34 of the regulations would be a useful line of enquiry.

The team is a combined team that works for two different councils and they have split the costs between them 50/50. You could investigate whether that is reasonable under the regulations. Your council estimates 7,100 summonses a year. How many summonses do they handle for the other council?

[islandgirl]

But I ask again, how do you bring this case? If there are other outstanding council tax bills and you are summoned to court you could argue it then, though I belive only the issues relating to the bill you are summoned for (and not historical ones) will be entertained by the court.

[Cyrus16]

But I ask again, how do you bring this case?

I have only paid the council tax arrears for this summons, I haven't paid the £95 court cost. I assume the council will want to go ahead with court to recover the court cost, which is what I want to challenge.

[Cyrus16]

I said correct "in principle". Not that every single item was correctly allocated.

I’d say if one item has been blagged it casts doubt on the reasonableness of the breakdown as a whole.

There is also the case that most councils separate their summons cost from their costs of obtaining a liability order. For instance East Staffs council charge £65 for the summons and an extra £30 to obtain a liability order. If payment is made before the liability order is issued, they withdraw the application and you don’t have to pay the extra £30. On the other hand my council lumps it all in together and makes you pay the full £95 even if it doesn’t reach the stage of obtaining a liability order. The cost of issuing the summons cannot be equal to the cost of issuing a summons and obtaining a liability order.

I’m not sure how many summons they handle for the other council. I assume that the 7;100 figure covers summons in the county.

[wales01man]

I have only paid the council tax arrears for this summons, I haven't paid the £95 court cost. I assume the council will want to go ahead with court to recover the court cost, which is what I want to challenge.

Challenged

[Cyrus16]

Challenged

????