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Council Tax & Liability Orders.

It is important to realise that if your local council have obtained a Liability Order against you for unpaid Council Tax or Business Rates, then you are not alone….during the year to 2009, there were over 3 million Liability Orders granted and with the severe effects of the recession, it is anticipated that this figure will increase significantly next year.

Bailiff action to collect unpaid Council Tax or Business Rates can only begin once a Liability Order has been obtained by the relevant Local Authority. Liability Orders are granted in the Magistrates Courts and very few debtors bother to attend this hearing. This is mainly because, unless the amount claimed is wrong, or you are not the person named on the summons, the Magistrate must grant the Liability Order.

To obtain the Liability Order, a representative of the Local Authority will present a spreadsheet to the Magistrates Court consisting of the names, addresses and reference numbers of those debtors in arrears with Council Tax and Business Rates. This is called a "Complaint List". Unless there are objections, which is rare, the Court merely rubberstamp this list and this has the effect of confirming the legality of the debt. It is very rare to be shown a Liability Order; however you could ask to see it.

By law, the local authority must give you 14 days written notice that they have obtained the Liability Order and that it will be sent to their relevant bailiff company for enforcement. Therefore, it is vital that you try to stop this process if you are unable to pay.

It is worth noting that although over 3 million Liability Orders were granted in the year to 2009 , only 50% of them are actually sent to bailiffs. If you need to make a payment proposal with the council, this must be done within this 14 day period. This is because, once the Liability Order has been passed by the council to their bailiffs, it is very rare for them to recall the debt.

Whether you owe £100 or £1,000, in unpaid council tax, your local authority will charge you a summons fee when they obtain a Liability Order. The amount is set by each individual council and ranges from between £75 to £125 for Council Tax and as much as £250 for Business Rates and will be added to your outstanding debt.

It is worth noting that a Liability Order is not recorded with a credit reference agency and will therefore not affect your credit rating.

NOTE:

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