What happens if I don't pay my Council Tax? - Print version

We are committed to helping people to pay their Council Tax bills. This includes:

• maximising take up of Council Tax support and/or reduction
• providing accurate bills as soon as possible
• helping people to make affordable payment arrangements based on their means

Make a claim for Council Tax support [/info/54/benefits]

Council Tax - Problems paying your bill?

Join over 80,000 other Coventry residents and pay your Council Tax by Direct Debit [https://www.coventry.gov.uk/info/55/council_tax/2289/how_to_pay_your_council_tax_bill#DD].

You will need your council tax customer reference number, your bank's sort code and your bank account number.

I am having difficulty making payments - what should I do?

It is vital that you contact us to discuss the situation straight away.

You may be entitled to a discount and/or exemption or Council Tax support which may help to reduce the amount you have to pay.

What will happen if I do not make the requested payments?

If you do not pay as detailed on your bill then the council will have no alternative but to issue further documentation and take recovery proceedings against you. We will issue one of the following notices:

• reminder
• final notice
• summons

If you haven't brought your account up to date, we will issue a summons and costs will be added to your account. Three weeks after the issue of the summons if there is still a balance outstanding, the council will apply for a liability order at Coventry Magistrates Court.

We may contact you by phone, email or text message to tell you that a payment is late.

Phone messages will originate from: 024 7683 1111, text messages: CoventryCC and emails: email@income.coventry.gov.uk [mailto:email@income.coventry.gov.uk]. Please note: this email address does not accept replies or incoming emails.     

The recovery process

The powers for recovery are contained within the Council Tax (Administration & Enforcement) Regulations 1992 (SI 1992 No. 613, as amended).

First reminder

A reminder notice is issued in cases where we have not received instalments by the due date. The reminder will include any instalment(s) that have not been paid and any instalment(s) due within the next 7 days, from the date of issue of the reminder.

If the account is not brought up to date, the right to pay by instalments is withdrawn and a Magistrates court summons will be issued.

If you have paid the amount within 7 days of the reminder you do not need to take any action.

If you are unable to make the payment shown on the reminder then you should contact us, to discuss an alternative payment arrangement.

Second reminder

A second failure to pay will result in the issue of a second reminder. Again, this notice will include any instalment(s) that have not been paid and any instalment(s) due within the next 7 days.

If the account is not brought up to date, the right to pay by instalments is withdrawn and a Magistrates court summons will be issued.

If you have paid the amount within 7 days of the reminder you do not need to take any action.

If you are unable to make the payment shown on the reminder then you should contact us, to discuss an alternative payment arrangement.

Final Notice

A third failure to pay will result in the issue of a final notice. The issue of a final notice means that the right to pay by instalments has been withdrawn and the full charge needs to be paid within 7 days. Failure to pay the balance will result in the issue of a Magistrates court summons.

A final notice will also be issued for accounts where there is no right to pay by instalments, as the amount payable was previously requested on the council tax bill in one lump sum.

If you are unable to pay the balance in full as shown on the final notice then you should contact us, to discuss an alternative payment arrangement.

Summons

If payment has not been received in accordance with the reminder, second reminder and/or final notice then a summons is issued.

If the council tax account is in joint names, each liable person will be issued with a separate summons. If payment (including the £78.50 summons costs) is received in full before the summons hearing takes place no further action will be taken.

If receive a summons you must complete one of the options below before the day of the hearing:

• option 1: pay the full amount that we have requested. This is the Total Amount Now Due figure on the summons. This amount includes the council tax payments you have missed and the court costs for issuing the summons which you must pay. See How to Pay your Council Tax bill [https://www.coventry.gov.uk/paycounciltax] for more details
• option 2: make an arrangement with us to pay the Total Amount Now Due over an agreed period of time. You must be willing to discuss your income and expenditure. You should call us on 024 7683 1111 to do this
• option 3: Check whether you qualify for a discount or an exemption [https://www.coventry.gov.uk/council-tax] on your bill or there has been a change in circumstance [https://www.coventry.gov.uk/council-tax] that could impact your bill. You must complete the relevant online form to tell us

You do not need to attend the court on the day of the hearing. However, we will still ask the court for a liability order even if we have agreed to a payment arrangement. 

On the day of the hearing

You should only call us on the day of the hearing if we have been unable to resolve your query.

You must call 024 7683 3328 between the hours of 10:00am to 11:30am. This number will be very busy, and you may have to wait a long time before you get to speak to us.   

The court will not admit you on the day of your hearing. If after speaking to the Council, you still wish to go before the court, we will contact them to arrange a specific time and date for you to attend.

Council Tax debt recovery policy

View our debt recovery policy [https://www.coventry.gov.uk/council-tax/happens-i-dont-pay-council-tax/3]

Make a payment

• Pay online [/onlinepayments]. We accept Visa, Mastercard, Solo, Visa Delta, Visa Electron or Maestro cards
• you can also pay using our 24 hour payment line on 024 7678 7778

I have received notice of an enforcement action for non-payment of Council Tax

What happens after the summons hearing date?

On the day of the summons hearing at the Magistrates Court, the magistrate will grant a liability order. This order allows the Council to take the following enforcement action against you:

• information request (known as a 14 day letter)
• attachment of earnings order
• deductions from a relevant benefit
• pass the case to Enforcement Agents (formerly known as bailiffs). An immediate fee of £75 will be incurred
• committal to prison
• bankruptcy
• charging order
• attachment of members allowance

Information request: once a liability order has been granted, we will send a notice stating that the liability order will be passed to the Council's enforcement agents within 14 days unless an agreed payment arrangement is made.

This notice (known as a 14 day letter) incorporates an income and expenditure form. Once the liability order has been obtained, you have a legal duty to supply the following information:

• the name and address of your employer
• confirmation of your earnings or expected earnings
• your payroll reference number
• confirmation of any additional income
• details of any other person who is liable for either part or whole of the debt

Not supplying this information could mean separate proceedings taken against you by the council, where a fine and/or penalty could be imposed.

Enforcement team telephone number 024 7683 1544.

Council Tax Debt Recovery Policy

1. Introduction

This document sets out the methods used by Coventry City Council (herein referred to as ‘the Council’) to recover unpaid council tax.

2. Debt advice

Information about free and independent debt advice [https://www.coventry.gov.uk/debtadvice].

3. Legislation

The Council’s powers to collect and enforce council tax are set out in the Council Tax (Administration and Enforcement) Regulations 1992 (as amended).

4. Council tax bill

Following the initial bill, every tax payer has the right to pay in statutory monthly instalments but the balance must be cleared by 31 March of the financial year for which the council tax falls due.

5. First reminder notices

A first reminder notice is issued 14 days after a missed payment. The account must be brought up to date within 7 days or the right to pay by instalments is withdrawn and the full amount becomes payable.

If payment is not made no further reminders are issued and a court summons will be issued not less than 14 days after issue of the reminder notice.

6. Second reminder

A second reminder notice is issued where a tax payer misses an instalment and has already received a first reminder in the same financial year but subsequently brought the account up to date. The second reminder advises that no further reminders will be issued in the financial year.

7. Final notice

A final notice is sent where a bill has been issued with only one instalment date and the tax payer is not entitled to pay by instalments. This would be most common where a bill is issued, for example, towards the end of the financial year and only one payment date is left for the tax payer to pay the balance. Or where a bill is issued for a prior year liability and the amount due is payable by a single payment. A final notice is issued 14 days after the missed payment.

8. Affordability

Even if the full amount has fallen due, the tax payer can request a payment plan. The tax payer does not have the statutory right to pay by instalments at this stage but the Council will consider reasonable payment plan offers.

Unless there are exceptional circumstances, arrangements should clear the council tax balance in the financial year in which it falls due.

Where a tax payer has accumulated arrears of council tax the Council will attempt to agree an affordable and realistic payment plan but one that takes account of council tax being a priority debt.

The Council operates a financial circumstances form for people with affordability issues. The form provides a standardised process for determining how much people can reasonably afford to pay towards their council tax debt.

Information about organisations offering free and impartial debt advice [http://www.coventry.gov.uk/moneyanddebtadvice].

9. Vulnerability

A potentially vulnerable person is defined in the National Standards for Enforcement Agents and may include:

• the elderly
• people with a disability
• the seriously ill
• the recently bereaved
• single parent families
• pregnant women
• unemployed people
• those with long term prolonged incapacity
• those who have obvious difficulty in understanding, speaking or reading English

Please refer to the Council’s Revenue Collection and Vulnerability Policy [http://www.coventry.gov.uk/counciltaxadvice].

When assessing cases and making decisions the Council will have due regard to the public sector equality duty under s149 Equality Act 2010.

10. Payment arrangements

Before the Council agrees a payment arrangement, tax payers may be asked questions about their finances, including:

• who do you work for
• how much do you earn
• the address of your workplace
• information about anyone else named on your council tax bill

11. Summons

In cases where the right to pay by instalments is lost and an amount remains outstanding, a summons will be issued for the tax payer to appear at a Magistrates Court. At the hearing, not less than 2 weeks from the date of the summons, the Council will seek a liability order. Summons costs are added to the account at the point of summons and the Court will consider whether to grant the costs at the hearing.

If the balance, including costs, is credited to the council tax account in full up to 24 hours before the hearing then the Council will not proceed with the application.

If the tax payer pays part of the balance or contacts the Council to make an arrangement the Council will continue to apply for the liability order but will not take further action subject to payments continuing as agreed.

12. Court Hearing

The Council operates a virtual help desk on the day of the Magistrates Court hearings. Council officers are available to speak to tax payers virtually to make a payment arrangement on the morning of the hearing. Tax payers wishing to attend the virtual help desk should visit the Council’s customer service centre at Broadgate House where they will be interviewed virtually via video call on a Council device.

The help desk is a discretionary local arrangement offered by the Council to assist tax payers. The provision of a helpdesk is not an entitlement and tax payers are encouraged to make contact with the Council at the earliest opportunity rather than wait until the day of the hearing.

The operation of a help desk does not in any way affect a person’s right to go before the Court to defend the application for a liability order.

Tax payers are not obliged to go before the Court. If the tax payer does not attend the Court or does not go before the Court, then the Court has the power to grant the liability order in the person’s absence.

13. Liability Order Granted

Once a liability order has been granted, if a payment arrangement has not been agreed, a Notification of Liability Order will be issued to the tax payer requiring the provision of further information and advising that the account will be sent to an enforcement agent if payment or contact is not received.

Tax payers are legally required to provide information to the Council in response to the Notification of Liability Order, including employer details and details of any benefits being received. Regulation 56 of the Council Tax (Administration and Enforcement) Regulations 1992 determines that failure to respond is an offence and can result in the imposition of a penalty charge.

Obtaining a liability order means the Council can enforce it in the following ways:

• apply for deductions from certain social security benefits
• compel an employer to deduct money directly from a tax payers earnings
• apply for deductions from Members allowances
• refer the debt to an enforcement agent (formerly known as bailiff)
• petition for bankruptcy
• apply to the county court for a charge against the property for which the tax is payable
• apply to a magistrates court for the tax payer to be committed to prison. This measure is contingent upon the debt previously having been returned by an enforcement agent who has confirmed that they could not seize goods to the value of the debt

14. Discretion

The Council Tax (Administration and Enforcement) Regulations 1992 determine that a person cannot be committed to prison for non payment of council tax unless an enforcement agent has first confirmed that there are not sufficient goods to be removed to recover the value of the debt.

Other than this, all enforcement remedies are available to the Council at the point a liability order is obtained.

The Council may decide to employ whichever enforcement remedy is deemed appropriate at any stage in the process providing it is legislatively compliant and proportionate in the individual circumstances.

Deductions from benefits or earnings followed by the use of enforcement agents would generally be applied in the first instance. However, officers may consider it appropriate to expedite the initiation of insolvency or charging order proceedings. In particular, this may be appropriate where there are multiple year debts and other actions have proved unsuccessful previously or where information suggests that tax payers are intending to sell the liable property.

The Council may consider the merits of individual cases and seek a form of enforcement which is proportionate to the debt and the circumstances of the tax payer but which also considers the interests of the wider tax payer and the need to protect public funds.

The process of committal, insolvency or charging orders are subject to authorisation by senior officers.

15. Deductions from benefits and/or attachment of earnings

Once a liability order has been granted officers will review accounts, prior to referral to an enforcement agent, to identify cases that are appropriate for an attachment of earnings order or deductions from eligible benefits. In determining whether an account is suitable for either an attachment of earnings or deductions from benefits the Council will consider the amount of deductions that would result and how this would repay the balance and/or meet the ongoing council tax liability.

The amount of benefit and earning deductions and are set out in statute. Where a deduction does not meet the ongoing council tax liability, nor therefore reduces the overall debt, the Council will consider alternative enforcement remedies.

The Council can request a maximum of 2 attachment of earnings orders be implemented at the same time. The Council will consider the merits of individual cases where it is suggested that the application of 2 simultaneous orders causes undue hardship.

The Council undertakes data sharing with Her Majesty’s Revenues and Customs (HMRC) to obtain employer details for the purpose of setting up attachments of earnings.

16. Enforcement Agents

If, after 14 days from the obtainment of a liability order, the debt remains unpaid in part or in full and no payment arrangement is in place, the debt will be referred to an enforcement agent. At this point the tax payer will incur a compliance fee of £75. If after 21 days the debt remains unpaid then the debt will enter the enforcement stage and incur a further £235 in statutory fees. Further statutory fees may be applied to the account should the enforcement agent be required to take control of and ultimately dispose of goods.

Once an account has been issued to an enforcement agent, the Council will direct all contact to the relevant enforcement agent. Where the tax payer indicates that they may be vulnerable then the Council will communicate this information to the Enforcement Agent and agree to take back the account only where it is considered that the vulnerability impacts on the debtor’s ability to pay the debt.

Please refer to the Guidelines for Potentially Vulnerable Groups [http://www.coventry.gov.uk/counciltaxadvice].

17. Cases returned from enforcement agents

If an account is returned by an enforcement agent because they have been unable to identify goods then the account will be passed to a second enforcement agent who will apply the same fees as they attempt to recover the debt.

Once an account has been returned by 2 enforcement agents, officers will review the account for further action and give consideration to:

• whether the account is suitable for an attachment of earnings order or deductions from benefits
• whether the debt exceeds £5,000 and whether the tax payer holds assets or equity in a property that could repay the debt in the event of bankruptcy
• whether the debt exceeds £1,000 and whether the rate payer owns the property for which the charge has arisen. In such cases a charging order may be appropriate. If so the case can be passed to a Court Officer for authorisation

18. Bankruptcy

Where a debt exceeds £5,000 and there appear to be sufficient assets to repay the debt, the Council will consider petitioning for bankruptcy.

19. Charging Order

Where a debt exceeds £1,000 and the tax payer owns the property for which the council tax is payable, the Council can apply to the County Court to have a charge placed against the property equivalent to the value of the debt. If the property is subsequently sold then proceeds from the sale will be used to settle the charges plus any interest accrued.

Should the value of the charges secured reach £5,000 the Council may consider bankruptcy proceedings as outlined above.

20. Order for sale

Where a charging order is secured against a property the Council can apply to the County Court for an order for sale. This would enable the Council to take possession of the property and to sell it. Proceeds from the sale would be used to repay the value of the debt and associated costs and interest.

The Council will consider the merits of individual cases and consider what action is appropriate and represents the best interests of the wider tax payer and the individual.

The initiation of an Order for Sale process will be authorised by a Director and Cabinet Member.

21. Committal Surgery

Where an account has been returned by an enforcement agent because they have been unable to identify and seize goods to the value of the debt and where other enforcement remedies have proved unsuccessful or are not appropriate, the tax payer may be invited to attend a committal surgery at the Magistrates Court as a final opportunity to address the debt before the Council considers initiating committal proceedings.

22. Committal to prison

Where a person is over 18 years of age, and a liability order has been returned by an Enforcement Agent because they have been unable to identify and seize goods to the value of the debt, an application can be made to the Magistrates’ Court to commit that person to prison in accordance with regulation 47 of the Council Tax (Administration and Enforcement) Regulations 1992.

The Court will decide if at the time the debt was due and at the time of the hearing the tax payer had sufficient income to pay the liability.

The options available to the court are:

• to make an order of imprisonment of a maximum of 3 months, usually suspended on payment of a set amount at intervals set by the court
• to allow the case to be withdrawn for other actions, for example insolvency, charging order or attachment of earnings
• to remit some or all of the debt due to an ongoing inability to pay
• to dismiss the case

There are substantial costs involved with such an application and these may be payable by the tax payer.

If a tax payer does not attend a committal hearing the Court can issue a warrant of arrest.

Corporate Debt Recovery Strategy

Our vision for debt recovery

To manage debt in a way that maximises the collection of income, protects funds and is responsive to the needs of our customers.

Introduction and context

Coventry City Council (the Council) is required to collect monies from both residents and businesses for the provision of a variety of goods and services. The Council recognises that prompt collection of local taxation and sundry charges are vital to help pay for the services we provide to local people. Many of the services provided by the Council are statutory and the Council has to provide them by law.

In order to continue to provide hundreds of services to our communities, including to our most vulnerable residents, it's essential that the Council maximises the collection of revenue. To do this, the Council endeavours to keep outstanding debt at the lowest possible level by having in place effective income and debt management practices.

The Council also has a responsibility to act proportionately in the management of debt and to ensure that debtors are not placed in undue financial hardship as a result of the Council’s efforts to recover any outstanding debt.

Debt

For the purpose of this strategy, ‘debt’ is defined as any amount of Council revenue that is due to the Council but has not been paid. ‘Overdue debt’, or ‘arrears’, is defined as any amount of the revenue due to the Council which has not been paid by the due date.

Debtor

A debtor is anybody (whether an individual, organisation, staff member (current or previous) or councillor) who has received goods or services from the council, or is liable for a statutory debt, and who has not yet paid the full amount owed.

For council tax and business rates, a debtor is an individual or organisation that does not adhere to the statutory instalment scheme.

For Housing Benefit overpayments, a debtor is a benefit claimant, or alternative payee such as a landlord, who has been overpaid Housing Benefit because of a change in circumstances.

To reduce the number of debtors, service providers must attempt to obtain payment in advance or at the point of service delivery wherever possible. Invoices should only be raised where payment in advance for a service is inappropriate.

Strategic context

This strategy supports all aspects of the One Coventry Plan. The collection of income supports the provision of all Council services and activities. In particular, this strategy supports the enabling priority of ‘continued financial sustainability’ of the Council.

Purpose of the strategy

This strategy is intended to provide an overarching framework for debt management. Individual income streams and the actions to recover debt within those streams, are subject to a wide range of processes, policies and statutory frameworks. This strategy sets out guiding principles which govern the Council’s overall approach to recovering debt and maximising public revenue.

Specifically, this strategy is intended to:

• set out the key guiding principles for the Council’s approach to the recovery of debt
• optimise and increase the collection performance of income
• minimise the level of debt held by the Council
• minimise the levels of debt written off
• promote a robust, proportionate and fair approach in the Council’s debt recovery processes
• ensure the Council discharges its statutory functions

Scope of the strategy

The strategy covers all debts owed to the Council including:

• Council tax   
• Business rates         
• Business Improvement District
• Commercial rent
• Housing benefit overpayments
• Sundry fees and charges (adult social care, general services)
• Parking Fines / Penalty charge notices

The strategy relates to all customers of the Council, including residents, businesses and partner organisations.

Accountability and responsibility

The Council’s Section 151 officer has statutory responsibility to oversee the proper administration of the Council’s financial affairs.

Responsibility for debt recovery rests with the Council’s revenues and benefits department, except for road traffic in the form of penalty charge notices which are the responsibility of the Council’s Highways department.

Corporate Directors have operational responsibility for monitoring and managing levels of income, debt and bad debt within their respective service areas.

For sundry fees and charges, budgets are credited with income at the point an invoice is raised. Directors should therefore ensure that budget holders have visibility of outstanding invoices even where the debt does not show on the cost centre.

If a debt is subsequently written off it is debited back to the originating cost centre.

Key Principles

There are four guiding principles which shape the Council’s approach to debt management.

 

Key Principle 1 - Robust and proportionate collection

• the Council takes all reasonable steps to pursue outstanding debt, including the application of all available statutory remedies
• proportionality is central to recovery action – the Council will consider the unique circumstances of each debtor as appropriate – taking account of the potential impact of enforcing the debt on an individual or organisation
• use public funds responsibly and ensure the likelihood of recovering a debt, and the level of the debt, justify the cost of pursuing the debt

Key Principle 2 - Efficient administration

• billing, invoicing and collection practices are efficient, accurate, utilise appropriate technology and encourage and facilitate payment of income before it falls due
• charges for services should, as far as possible, be settled in advance of provision
• convenient payment options are provided for customers
• charges are clearly set out and continuously reviewed
• Plain English is used in all correspondence

Key Principle 3 - Financial inclusion

• promote income maximisation and benefit take up
• promote eligibility for reliefs and discounts
• work with partners to identify and support vulnerable customers
• target the underlying causes of indebtedness

Kep Principle 4 - Minimise arrears and bad debt

• recovery practices and processes limit bad debt and levels of debt written off
• debts written off are subject to appropriate governance and scrutiny
• budget holders make adequate provision for bad debt

Enforcement Remedies

Where payment is not received, the Council will apply the appropriate enforcement measures to each debt type and the specific circumstances of the debt and debtor. The Council retains ultimate discretion to determine the appropriate legal means of recovery of any debt. Where a debt is deemed appropriate for recovery, the Council will adopt a robust approach using a range of measures including:

• Attachments of earnings
• Warrants of execution
• Third party orders
• Insolvency/Bankruptcy
• Instructing Enforcement Agents
• Possession proceedings
• Committal to prison
• Charging orders
• Orders for sale
• Deductions from benefits
• Registering debts at County Court

Where the Council incurs recoverable costs in pursuing a debt, the Council will normally seek to recover those costs from the debtor.

The Council will work in partnership with a number of specialist companies to recover unpaid debts. These companies provide additional support and are specialists in their respective areas of recovery. External companies are used for tracing absconders, insolvency work and debt collection work. All external companies working with the Council are required to follow our policies and procedures at all times.

Customer commitment

The Council is committed to providing excellent customer service. Council officers will be courteous, professional and fair in their debt management activities.

The Council aims to take, as far as reasonable, an accommodating approach to managing the repayment of debt. Where appropriate, customers will be offered affordable and sustainable payment plans.

The Council recognises that, in certain circumstances, a firm and decisive approach to debt recovery is necessary to safeguard public funds and ensure that those who are able to pay, do so. This is particularly important when the debt has arisen as a result of a financial penalty or enforcement action.

The Council has a duty of care towards its employees and will not tolerate any form of abuse of officers carrying out their duties.

Customers in difficulty

The Council will at all times try to help customers who are experiencing difficulties in paying. Wherever possible the Council will try to distinguish between those who cannot pay and those who will not pay, or are deliberately withholding, delaying or giving false information.

All available allowances, discounts and rebates will be granted where appropriate, at the first point of contact. The Council aims to ensure that all customers are dealt with efficiently so that they get the correct bill, any benefit advice and the best instalment agreement to maximise revenue to the Council and to meet the needs of the customer at the first point of contact.

The Council will also aim to work with external agencies to offer customers additional support. The Council will work in partnership to assist both the Council to secure debt recovery and the customer in obtaining the correct benefit and debt management advice to enable them to pay their bills.

The Council is committed to reducing poverty and hardship and ensuring benefits and other income is maximised. If the customer experiences considerable financial hardship or has multiple arrears the Council assesses each customer’s case on its own merit. We would always expect the customer to pay their current financial years liabilities and then agree a payment plan for the arrears.

Debt advice

The Council will maintain effective working relationships with partners across the Advice Sector and ensure that customers are aware of available debt advice services. This includes working collaboratively with partners to respond to customer need and to undertake proactive data sharing campaigns to actively seek out and support vulnerable debtors.

The Council partners with the Money and Pension Service (MAPS) to provide debtors with direct referrals and warm handoffs for debt advice.

In addition to debt advice, the Council actively seeks to encourage income maximisation for debtors – using data intelligence to identify underclaiming of benefit, working with partners to engage with those with potential entitlement to additional benefits and providing on an online benefits calculator for debtors.

The Council is a signatory to the Collection of Council Tax Arrears Good Practice Protocol published by Citizens Advice in 2013 and will endeavour to satisfy the requirements of subsequent iterations of the protocol.

Complaints

Certain income streams are subject to specific statute governing the manner by which a debtor may challenge liability. Generally, the Council’s complaints procedure enables complaints to be made regarding Council services and complainants ultimately have recourse to the Local Government and Social Care Ombudsman.

Bad and doubtful debts

The Council will exhaust all reasonable efforts and statutory remedies in pursuing outstanding debt. The Council recognises that in some circumstances it may be necessary to write off debt. The following sets out some of the circumstances in which the Council may consider writing off debt:

• all reasonable efforts to recover the debt have been exhausted
• the cost of pursuing the debt exceeds the value of the debt and those costs incurred are unlikely to be recovered
• the likelihood of recovery is such that the Council determines that no further resource should be allocated to pursuing the debt
• pursuing the debt would place the debtor in undue and extreme financial hardship
• the Council is legally compelled to write off a debt
• the debtor cannot be traced (the Council will undertake reasonable tracing measures including the use of credit reference agencies as appropriate)
• the debtor’s vulnerability justifies writing off the debt
• the debt is time barred, where the statute of limitation applies. Generally, this means that if a period of six years has elapsed without notifying the debtor of the amount owing, the debt cannot be enforced by legal action

Writing off debt will also be subject to the governance and approval provisions set out in the Council’s constitution.

Council budget holders will work with Finance Managers to ensure adequate provision for bad debt is made and maintained.

The Council can and will reinstate, within statutory deadlines, any debt where it becomes apparent the circumstances for write-off are no longer applicable.

Individual debt relief

There are a number of options available to individuals to assist them in dealing with debt – this includes breathing space (debt respite scheme), debt management plans, Individual Voluntary Arrangements and Debt Relief Orders.

Some debt relief schemes require the Council, as a creditor, to vote on whether to accept proposals put forward by a debtor or their representatives. This usually involves an offer of a percentage payment in the pound.

In such circumstances the Council would generally seek to maximise the level of debt recovered to the public purse. However the Council will consider the circumstances of individual applications including factors such as:

• the type, amount and age of outstanding debt
• the applicant’s specific circumstances and whether the debt relief application would allow the applicant to regain financial control which benefits the public purse in future

Accounts in credit

The Council will review credit balances annually. Where credit balances go unclaimed, and all reasonable efforts have been made to contact the debtor, credit balances may be written off.

The Council will make reasonable efforts to refund credit balances should a debtor subsequently seek to reclaim a written off credit.

Monitoring performance against this strategy

A number of indicators and metrics are used to monitor debt management performance including:

• in year/prior year collection rates and outstanding debt for local taxation
• the amount and age of outstanding corporate debt (excluding local taxation)
• levels of debt written off
• statutory reporting requirements for local taxation and housing benefit overpayments

Local taxation collection performance is reported through the One Coventry Plan and subject to annual scrutiny by Finance and Corporate Services Scrutiny Board (Scrutiny Board 1).

Directorate management teams and budget holders have responsibility for monitoring levels of collection, debt and bad debt within their respective service areas.

Review

This strategy will be formally reviewed every three years. Council departments responsible for income collection will, as part of operational service delivery, ensure that income collection practices are reviewed continuously so that they are fit for purpose, represent best value, meet debtor need and make best use of existing and emerging technologies.