Disclosure Log

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Question

A council taxpayer who owes more than just the current year's liability runs the risk of incurring additional recovery costs through a further application for a liability order if payments which are intended for the current year's liability are allocated by the council's computer to the previous year's liability. This would most likely happen where a non specific payment is made and the computer software is set to automatically allocate these payments to the oldest year's debt. Councils computer systems have the necessary flexibility to be set to allow non specific payments to be allocated to the arrears or the current year's liability. I understand that the majority of billing authorities have their computer software set to ensure that their customers are not subject to unnecessary recovery action, additional costs or hardship, i.e. so non specific payments are allocated to the current year's liability. How does Merthyr Tydfil Council have its computer software set to deal with non specific payments. Current or oldest year's liability?

Answer

The computer system will evaluate each and every payment that is credited to an account. • There is a tolerance rule applied to the system of £5.00 which means that it will match the payment to an instalment or enforcement arrangement specifically if the amount receipted is within the payment instalment value plus £5.00. • If a payment is made it will look to match it to an instalment • If a payment is made which is greater than one instalment it will look to match it to 2 or more instalments or enforcement payment arrangement. • If a payment is received from an Attachment to earnings or benefits the payment will be credited specially to that account as the liability order reference form part or the account reference number which allows the payment to allocated exactly. The same would apply to enforcement arrangements and liabilities that have been passed to enforcement agents. If the payment can’t be matched specifically to an instalment it will be credited to the current liability. The reason that we do this is because we operate on a multi-year billing and recovery process which means that they could be more than one financial years outstanding and we offer the customer the opportunity to pay off the whole balance in a global instalment plan. So by applying a payment to the current liability often reduces the need for recovery action and therefore reduces hardship to the taxpayer.