Council Tax has been a contentious issue ever since its inception, replacing the controversial Poll Tax upon the passing of the Local Government Finance Act 1992 (‘the LGFA’) into law. It is a combination of personal and property tax which most people are obliged to pay by virtue of owning or occupying rented or mortgaged property – though there are certain categories of people who can apply for a discount or an exemption (e.g. single occupants, students or those with severe mental impairment).
Council Tax pays for a range of services provided by local governments, including maintenance of highways and public transport, housing services, and waste management, with the biggest proportion being dedicated to social care services. Some would argue that this is money well spent – but for those already struggling to maintain their finances, Council Tax is just another expense they are told to prioritise with money they don’t have.
Unlike with most household expenses and debts, those who fail to pay their Council Tax in England face the risk of commitment to prison – but there are steps local authorities must pursue before proceedings reach that stage.
NB: In the context of Council Tax arrears, the term “commitment” is used by the relevant legislation as opposed to “committal”. The latter is more commonly used in proceedings such as committal for contempt of court. Although the relevant authorities use the two interchangeably, the former term will be used throughout this article as being correct.
Payment and recovery of Council Tax is governed by the Council Tax (Administration and Enforcement) Regulations 1992 (as amended) (‘the Council Tax Regulations’).
Where there are arrears of Council Tax and the requisite notices demanding payment have been sent, local authorities can apply to the Magistrates’ Courts for a Liability Order. Once a Liability Order is obtained, further enforcement procedures become available to recover outstanding Council Tax – and itself increases the debt due to the legal and administrative cost of applying.
Once a liability order has been obtained by a local authority, the debtor is under a duty to provide information to the local authority upon request (Reg 36). This mechanism should (in theory) be used by local authorities to inform any decision regarding which steps to take next.
Enforcement options under the LGFA and the Council Tax Regulations include:
Some local authorities have published policies regarding their practices for pursuing Council Tax and may have signed and agreed to follow a Good Practice Protocol for recovering Council Tax arrears. This should be checked carefully as any deviations may be challengeable.
A local authority can only apply for commitment to prison where it has attempted to use enforcement agents to recover the debt or goods and that procedure has been unsuccessful (Reg 47).
There are strict procedures set out in Schedule 12 of the Tribunals, Courts and Enforcement Act 2007 (‘the TCEA’) which enforcement agents must follow when seeking to take control of goods. Failure to follow these procedures could result in a challenge to the enforcement action being taken and a complaint being made.
In serious cases a complaint can be made to the County Court on the basis that the enforcement agent is no longer a fit and proper person to act in that capacity. This may be shown with evidence that the Enforcement Agent is not aware of the limits of their powers or has otherwise behaved in a way which is incompatible with continued certification (e.g. by committing a criminal offence).
If a complaint is successful, the County Court will have the power to revoke or suspend the enforcement agent’s certification and order compensation. If such a complaint is unsuccessful, under Civil Procedure Rule 84.20 there is only a risk of an adverse costs order if the complaint disclosed no reasonable grounds for bringing it or if it is an abuse of the court’s process. This creates a relatively risk-free process by which an aggrieved debtor may take action against an enforcement agent for their conduct.[AW1]
It is not a criminal offence to fail to pay Council Tax. The power to commit a debtor to prison is a means of extracting payment of the debt, not to punish the debtor (R (Wandless) v Halifax Magistrates’ Court  EWHC 1857 (Admin), per King J at para 24). In other words, the threat of imprisonment is a debt recovery option to provide an incentive to pay. I make no further comment about whether the concept of debtors’ prisons have any place in 21st century England.
A local authority must apply to a Magistrates’ Court for a warrant committing the debtor to prison (Reg 47(1)) – enforcement agents have no power to make that application. Where such an application is made, the Court must conduct a means enquiry in the debtor’s presence (Reg 47(2)). The Court has the power to issue a summons and/or warrant to have the debtor brought before the Court to enable such an enquiry to be made (Reg 48(5)).
In order to obtain a warrant of commitment (not ‘committal’, in this context at least), the local authority will have to prove on a balance of probabilities that the reason the debtor has not paid their Council Tax amounts to “wilful refusal or culpable neglect” (Reg 47(2) and (3)). If the Court is so satisfied, it may either issue a warrant of commitment, or it may fix a term of imprisonment and postpone the issue of that warrant subject to conditions. In other words the Court can either order that the debtor be committed to prison immediately, or make an order suspending such imprisonment on terms.
It is to an extent self-evident that “wilful refusal” refers to a situation in which a debtor has the money to pay but is simply refusing to do so.
As for “culpable neglect”, the Administrative Court explored commitment for Council Tax arrears in the case of R (Woolcock) v Bridgend Magistrates’ Court  EWHC 34 (Admin) (‘Woolcock (No 1)’). In that case Ms Woolcock was a single mother of limited means who lived with her son. She was not well enough to work and fell into arrears with her Council Tax. A warrant of commitment was issued in her absence as the Magistrates had found she was guilty of culpable neglect.
In criticising their decision and ruling that there had not been a proper inquiry into Ms Woolcock’s means, Lewis J in the Administrative Court stated (at para 28) that the material before the court “does not indicate whether [Ms Woolcock] was indeed simply using all her available income to provide for basic needs, or whether there was other income available which could and should have been used to pay her council tax liability.” It was even said that although Ms Woolcock had “buried her head in the sand”, this did not of itself amount to culpable neglect.
It follows that if a debtor does not have enough to pay all of their priority expenses and basic household needs or would struggle to do so if they prioritised Council Tax, then they cannot be guilty of culpable neglect.
Following the decision in Woolcock (No 1) cited above, Ms Woolcock brought a further challenge to the system currently in place for the enforcement of Council Tax and the steps being taken by local authorities (R (Woolcock) v Secretary of State for Communities and Local Government  EWHC 17 (Admin) (‘Woolcock No 2)’). It was argued inter alia that the sheer number of unlawful commitment orders being made indicated that something was clearly wrong with the process as a whole.
The Administrative Court categorically stated that the procedure itself was lawful. As such any criticism must lie in the failure of local authorities and Magistrates’ Courts to follow that procedure and the consequential warrants of commitment that are issued unlawfully.
If the Court decides to issue a suspended warrant of commitment, it should not suspend for a term which is excessive – generally no more than 3 years (R (Broadhurst v Sheffield Justices CO/1114/2000). This may be the case where the Court suspends the warrant on payment terms which would take several years to clear the Council Tax arrears – with the result that the debtor carries the risk of imprisonment for any default throughout that period.
Under Reg 48(2), where the Court does not issue a warrant or fix a term of imprisonment, the Court has the power to remit all or part of the Council Tax debt. It might be appropriate for the Court to make such an order where, no matter what measures are taken, the debtor will now simply be unable to make up the arrears within a reasonable period.
In order to defend debtors facing imprisonment for wilful refusal or culpable neglect, the first step will be to examine their financial position, with full details of their income and expenditure. This should be far more detailed than the usual Statement of Means completed to help the Court to determine fines. It should include details of all household income and expenditure, including priority expenses and debts (rent/mortgage, council tax, gas, electricity, income tax, court fines – those with serious consequences for non-payment), non-priority expenses (those with less serious consequences for non-payment) and balances outstanding. This will demonstrate where the debtor’s money has been going and will hopefully prove they have not simply refused to pay.
As debtors in Council Tax arrears are likely to be suffering from other financial difficulties, they may need to be referred to a money advice service for budgeting and debt advice to prevent mismanagement of their finances going forward. A Common Financial Statement prepared on a debtor’s behalf, with its thorough detail, may assist in opposing a warrant or having a warrant of commitment suspended on payment terms.
If it becomes apparent that the debtor has made payments to non-priority expenses over council tax and would otherwise have income available to pay, it may be arguable that the debtor had not previously received advice and did not realise they were prioritising non-priority expenses. This is not uncommon – due to aggressive enforcement tactics by finance companies and rising interest, debtors may fear non-payment of credit card debts and phone contract bills more than they fear non-payment of Council Tax.
However as stated above, the procedure is a means of extracting payment, not a punishment for non-adherence to the law. In the context of a means enquiry, a debtor’s knowledge and understanding of their obligations clearly creates a distinct difference between neglect and culpable neglect. At the very least this will be an argument in favour of suspending any warrant of commitment on terms.
With ever-increasing Council Tax bills and a widespread surge in arrears of Council Tax, it is becoming clearer that relentless cuts by successive governments are making life much more difficult for those at the very bottom.
In 2016-2017, at least 62 people were imprisoned under warrants of commitment for Council Tax arrears. It was acknowledged by Hickinbottom LJ in Woolcock (No 2) that between 9.5 and 18% of those imprisoned for breaching suspended warrants of commitment were imprisoned unlawfully because the warrants themselves were unlawful.
These stories have resulted in outrage, and rightly so – because the law is being incorrectly applied, debtors are facing imprisonment for simply not having enough money on which to live.
Where creditors and the Courts are not held to account or forced to conduct proceedings properly, there will always be a risk that debtors will be imprisoned unlawfully. Where debtors do not understand how the proceedings are supposed to work and are unrepresented, that risk only increases. It is my hope that this article will contribute to a wider understanding of the process with a view to ensuring that no one spends time in prison for the crime of being too poor.
Tony Williams worked as a debt caseworker prior to joining the Bar and regularly dealt with local authorities and enforcement agents on behalf of clients being pursued for Council Tax arrears.
Tony is willing to represent any debtor facing imprisonment as a result of non-payment of Council Tax in the Magistrates’ Courts on a pro bono basis. To instruct Tony, please contact his clerks.
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