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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 2007, there were approx 4 million Liability Orders granted.

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. 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 application will be granted.

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's List". Unless there are objections, which is rare, the Court merely rubberstamps this list. . This has the effect of confirming the legality of the debt. It is 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 the Liability Order is being transferred to their relevant bailiff company for collection. Therefore, it is vital that you try to stop this process if you are unable to pay.

It is worth noting that although approx:4 million Liability Orders were granted in the year to 2006, 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, most local authorities will try to tell you that once the debt is with the bailiff, they cannot have any further dealings with you.  Although this is untrue, it is very difficult to have the debt returned back to the council once it has been sent to the bailiff company.

Whether your outstanding debt is £100 or £1,000, your local authority will charge you a fee when they obtain a Liability Order. The amount is set by each individual council and ranges from £75 to £125 for Council Tax and from £70 to £165 for Business Rates and will be added to your outstanding debt.

The Magistrates Court will charge a fee of £3 to each local authority when granting the Liability Order and each council is allowed to keep the fee that they charge to you ( ie: £75 to £125) less the £3 court fee.

Local Authorities will argue that they are not making a profit from  obtaining Liability Orders but that they require this money in order to run their debt recovery departments !!

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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