Sandwell MBC launches pilot scheme to recover unpaid tax

Sandwell Council has launched a pilot scheme in conjunction with HMRC and 29 other councils across England, with the aim of recovering unpaid council tax.

The pilot, which falls under the Digital Economy Act (2017) gives new information sharing powers between government and local authorities.

The Act allows Councils to obtain employer and income information from HMRC for people who have failed to pay their Council Tax and have an order to pay by the local magistrates’ court.

If the debtor has failed to pay their council tax and have been issued with a Liability order in the magistrates’ court, Sandwell will then be given access to the information held by HMRC. This information includes information on earnings. The new pilot scheme will enable debt to be deducted directly from earnings of the debtor.

This legislation also means that councils will have full oversight on the information held on debtors by HMRC including earnings from employment and unearned income from other sources such as property rentals for example. This will help inform the council as to the income and financial situation of the debtor.

This pilot will hopefully mean that those who have the ability and the income to pay and have thus far refused to pay, will have the debt automatically deducted from their salary.

Sandwell Council’s cabinet member for resources and core services Councillor Wasim Ali said:

“We already have one of the best records in the country for collection of council tax. We collect almost 99% of council tax owed and this puts us among the top of all metropolitan councils in the country. We have identified 4,000 of our hardest to recover cases which we’ll be pursuing under these powers with the HMRC. It’s only fair that we all pay for the services we receive and there is a minority of people who avoid paying. This isn’t about pursuing people in hardship or those who are entitled to benefits they haven’t claimed to cover their Council Tax. We do a lot of work with vulnerable people and families to ensure they claim what They are entitled to and we will continue to help people who are struggling. This pilot is about making sure people who are liable for council tax pay their way and do not evade their responsibilities. With local authorities under increased financial pressure to deliver core services, the recovery of money owed has become increasingly important. Most residents pay their taxes and the launch of this pilot scheme should address those that don’t in an effective way.”

The pilot will last a year, and the results will be reviewed. If the scheme is a success, then the programme will be rolled out across England and Wales. The Digital Economy Act can be viewed in full here.

You can read another article about the digital economy act and what it aims to achieve here.