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• Archived Blog Post

  Date / Time: 1/7/2009 8:06 PM UTC

  Thousands bankrupted over unpaid council tax
  

  Thousands bankrupted over unpaid council tax

  

  Jill Sherman and Frances Gibb

  Thousands of vulnerable people are being forced into bankruptcy as town halls use increasingly aggressive tactics to chase council tax arrears.

  Some households owing hundreds of pounds are saddled with debts in five figures as a result of such action, The Times has learnt.

  Pensioners and poor families have even had to sell their homes to meet huge legal costs arising from bank-rupcy orders that dwarf the original debt, according to Citizens Advice.

  Bailiffs were used in 1.2 million cases to recover council tax arrears last year, and 2.5 million households received courts summonses. Of 19,156 bankruptcy petitions, one in five was lodged by local authorities. In 1992-93 the proportion was one in a hundred.

  Times Archive

  • Poll tax flaws that could see Tory heads rolling

  • Poll tax one of five options studied as rates replacement

  Related Links

  • Bailiffs and bankruptcy are common currency

  • '£2,000 debt nearly cost me my home'

  • Stigma no longer attached to going bust

  The figures have prompted calls for councils to be less draconian and to use bankruptcy proceedings only as a last resort in extreme cases.

  Opposition parties say that town halls should not be putting people’s homes at risk when the Government is putting pressure on mortgage lenders to avoid repossessions.

  Figures obtained by the Liberal Democrats under freedom of information legislation and extrapolated across England and Wales show that 3,500 householders were pursued for bankruptcy or made bankrupt by town halls last year. Separate research by Citizens Advice suggests that town halls filed more than 5,000 petitions for bankruptcy, of which at least 1,000 resulted in orders allowing the seizure of assets. Julia Goldsworthy, the Lib Dems’ local government spokesman, said: “Public bodies should do everything they can to ensure that bankruptcy is avoided where possible.”

  The Government said that local authorities needed to chase arrears to stop bills from soaring. A spokesman for the Department for Communities and Local Government said: “Local authorities must have the tools at their disposal to tackle the small minority of people who can but won’t pay.”

  Sir Jeremy Beecham, the vice-chair-man of the Local Government Association, said: “People struggling to pay bills are given as much leeway as possible.”

  " A spokesman for the Department for Communities and Local Government said: “Local authorities must have the tools at their disposal to tackle the small minority of people who can but won’t pay.”
  
  Is this the help the government has been promising hard and long for people in difficulty?
  

  James, East Kilbride, Scotland

  what this land needs is one mighty revolution to topple these tyrants who abuse the vulnerable and their public positions to usurp.

  Nathan , Brighton , East Sussex

  Ah! that's it, maybe we should all go bankrupt, then the theiving government would go even more in the red, and there would be no one to help raise there extortionate taxes. Can't wait to emigrate! We've been rid of the hated Poll Tax, now it should be down with the council tax!

  Steve G B, Ludlow, UK

  It is a pity Councils do not use similarly aggressive tactics to eliminate waste, improve efficiency and drive down their costs.
  As so much local spending is now centrally controlled and financed it is time Councils were abolished which would save £billions and cut off the Councillors' gravy train.

  Alan Hargreaves, Holywell, UK

  thank God I no longer live in the benighted country that is Britain.

  G Bryan, wellington, new zealand

  It has been suggested that Council staff are also unable to pay their council tax bills -so the question is - why are they not taken to court? Council Staff at least have jobs and actuallly can pay! As one Comments maker said there is a vast difference between cannot pay and will not pay.

  Trish Niblock, Edinburgh, Scotland

  we should abolish all tax except income tax/capital gains and privatise everything except the police/army/judges. you can still help the poor with that money, but the rest of the population wont be taxed so much that people on an average wage need the state to provide for them.

  will, grimsby, uk

  going bankrupt is not so bad, its more of a bore than a disaster and the councils doing it are cutting off their noses to spite their faces because they won't get a penny nor recover their costs. a life without credit is not so bad and you lose your bank account too and have to use cash only

  peter c, Devizes, Wessex

  Exactly why I left the country. So sad to see Britain come to this. Get rid of the council tax and introduce a local income tax that is deducted by employers.

  Angus, Montreal, Canada

  We seem to be missing the point one more time. The Government is nothing but an "organised crime" companie, which is selfish and contradictory. There is a difference between can not pay and will not pay. Logically if you can not pay £10 how can you pay £50 or more in fees? Makes you wonder...

  Michael Anderson, london,

  The art of taxation consists in so plucking the goose as to get most feathers with the least hissing. It is a crime against humanity to treat people as if they were geese.

  Bob Kornic, Shelbyville, Michigan, U.S.

  This is yet another ill effect caused by the fundamentally flawed council tax system. Anyone whose income drops, whether due to retiring, recession, job loss, or other cause, is bitten extra hard by council tax because it does not decrease with income, as any reasonable tax should.

  Jan T. Kim, Norwich, UK

  This is a one sided story with no mention as to why people are made bankrupt. Council Tax is a priority bill, people claim hardship but still continue to pay for non-essential items such as Sky TV! Councils must recover the debt, and only use bankruptcy as a last resort in the majority of cases.

  Dave, Southampton,

  Is it really true that approximately one half of the revenues from this tax goes towards payment of civil servants's, and ex civil servant's index-linked pension payments?
  
  If so, it is an outrage!, can any serving civil servant confirm or deny this assertion?

  John Wood, Uxbridge, UK

  I am self employed from home and always pay my CT on time. However, last month my payment was 12 days late due to clients being overdue with invoice payments. I am still currently pursuing money I should have been paid 2 weeks before Christmas and next month may have to use savings.

  Linda, Fife,

  This Government has worked tirelessly over the past decade to turn ordinary, hard working people into criminals with the aid of their town hall henchmen. Well done Gordon - mission accomplished!

  Jon, Bournemouth,

  whilst banks are being told they can't charge for late fees, i just got hit with a £103 administrative fee for my late payment and there's nothing i can do about it.
  
  just disgraceful how they target the poor,

  peter, london,

  Its bizarre that councils will bankrupt and take people's homes with one hand then pay a fortune in social benefits with the other.
  
  Opposition parties say home should not be put at risk, so are they ensuring the councils under their control are less vicious?

  Neil Murphy, CROMER,

  People should pay their bills - but the Council Tax should be replaced by something else - a Local Sales Tax where there is no such thing as a non -payer.
  The original idea of the Poll Tax was actually quite good - until the jobsworths messed it up - made it complicated.
  1 man, 1 price, end of....

  Phil, Preston,

  Ultimately it i money which is owed and people have to take responsibility for their debts, feckless or not.. Council Tax may be unfair and people should write to their MPs and tell them they will not vote for them if it prevails, but should pepole sibsidise their neighbours?

  john wilkinson, Basildon, UK

  to Peter from Liverpool.
  
  I live in Liverpool too and at a previously rented apartment the tenant had not paid their bill.
  
  After much talking to the council they didn't pursue us as it was not ours to pay, in these cases, you should provide your landlords number to the Bailifs. He is responsible

  Mat, Liverpool,

  A core issue is that private companies such as Capita earn fees by moving these processes forward, often in my experience abusively. Councils have delegated all authority.

  MacK, London,

  I Work as a Bailiff. Most of my cases are old debts, the debt is plus fees, we help with payment plans/ what you can pay weekly/ monthly. We have guild lines that the councils give so ex weeks to pay in, pedending on situation. But only after this we take goods. All debts have to be payed in fall!

  oliver, colchester,

  Given the appalling year on year increases in council tax, this amounts to mere tyranny!

  Robert, Hull, UK

  It is the charges involved that should be investigated our debt of £6000 escalated to £56000 with the Trustees fees of nearly 50k. 50k for a few letters and a court appearance bring back Dick Turpin its cheaper.

  S Faulkner, tonbridge, england

  If they can only afford to live in a smaller/cheaper home then so be it. If you can't afford the rent get out or get lodgers in.

  Tim, Worcester Leigh Town Shire, Great Britain

  There seems to be a difference in perception between residence within council districts and the facilities being enforced to support Travellers. The whole point of civic interaction is localism. If councils no longer represent the well-being of their diaspora then a level of community vanishes.

  Malcolm Turner, Alsager, England

  A state that evicts someone from their own house over a tax bill commits a violation of universally guaranteed human rights. The curious thing is that these human rights originate in England. Today they seem to have been forgotten.

  Klaus Becher, London,

  Peter Lloyd might pay less than a good night out - my council tax is over 25% of my pension and I get nothing for it except being stopped from voting (they post the forms too late), minimal bus service and aggressive "warnings" about everything. As for the other "services" - rather disservices

  David, Brentwood, UK

  Civil or Public servants! what a joke. NEone who deals with LA's on a regular basis has to deal with people who have forgotten there primary function i.e. to help and serve the public as the name suggests. They believe they need to act like private sector and make commercial decisions.
  Shame on LAs

  brendan, chepstow,

  Why should those of us who are fiscally responsible and not live beyond our means support those who are not. Give up the fags and booze and learn to cook and you will have the money to make your proper contribution to society.

  Suzanne PIPER, St Albans, Herts

  These people used to be known as civil servants. Their role, as the name implied, was to serve the community. They have become, as Churchill warned, 'No longer servants, no longer civil'.

  David, Oxford,

  Council sent baliffs round to our rental house- previous tennant in arrears. It was a scary experience.Same rental place, British Gas hounded us for a an unpaid gas bill which ballooned from 80 pounds to over 1000 in a matter of months. There are no Gas supplies provided in our entire village!!

  Susan, Oxford, UK

  My council suddenly hit me with a £500 bill to be paid in two months because they messed up the calculation on a rebate, I am in a position to pay but it upsets my monthly budget Imagine someone who lives from month to month and does not have spare cash and at a time when we are all suffering

  ken, brighton,

  Surely it's bizarre that a council can take this type of action, yet at the same time run a social services department to care for the vulnerable and needy?
  
  Very few, if any, of our peer countries have a similar tax; rolling it into income tax would make it more transparent.

  Howard, Nottingham,

  Council tax is a fundamentally unfair tax which penalises the poor and those who rent. It seems to be spent on maintaining grossly inflated salaries for senior council officials and paying for an overly generous pension scheme. When is enough going to be enough?

  Name Withheld, London,

  Manchester City council sues before checking the facts, and because it is magistrates court you can't send info. They purposefully make themselves difficult to contact (brag about changing direct contact numbers regularly), and try and make a profit out of court costs with 1 judge sitting for cases

  Larry, Manchester,

  Council bosses get paid huge salaries, so what would they know about ordinary working people finding it hard to make ends meet? Taxation is too high in the UK and Council Tax is part of the problem. There needs to be a massive reuction in unecessary public expenditure.

  Andrfew brown, derby, UK

  This is just an extension of the types of abuses common to councils that spy on garbage bins, hire praetorian guards of traffic wardens to collect revenues - for years now councils have used the type of language more common to collection agencies than your government representatives!

  w. marlowe, london,

  I am renting a house in Liverpool, and the previous tenant didn't pay his council tax. I had four different bailiffs at my door as a result. One was extremely rude and even refused to show me any documentation. This profession needs real regulation.

  Peter, Liverpool, UK

  Given that almost half of the money paid is going to fund their Final Salary Pension Schemes that the private sector can't afford to give the rest of us I think it's time they were dragged into the real world and had these troughs closed down!

  Andy, Newcastle, UK

  There can now be no mistake that Council Tax bills are too high. Costs MUST be cut so that taxes are manageable.
  

  Mark, London,

  Why are you in debt? If you live within your means there isn't a problem. If you squander with a cedit card, that's your problem, not mine.

  m wilson, bidache, france

  Tough, - but I pay my Council Tax and have to give up things I like so that I can.
  
  Too much Council Tax is wasted and it needs to be reduced - but it is less than the cost of a monthly good night out, so tax dodgers should be made to pay up. There is already help for those in genuine need.

  Peter Lloyd, BLACKER HILL, UK

  What sort of society make a man homeless over a tax bill.
  
  This country has no moral compass.

  S.Kelly, London,

  This is all the fault of the government who have piled local government with ever more stupid rules resulting in at least a doubling of council tax which has become a mortgage you can never redeem regardless of the ability to pay unless you are on benefits.

  carol42, ashford, UK

  “Local authorities must have the tools at their disposal to tackle the small minority of people who can but won’t pay.”
  
  Doubtless there are a 'small minority' of people who can but won't pay, but not 2.5 million of them.

  Richard Crow, Warsaw, Poland

  In the Good Ol' Days of Freedom and Liberty fellow countryman would unite to condemn these draconian actions.
  Unfortunately, in today's times there is so much entertainment brainwashing and distracting people, they are oblivious to the fast approaching corporate fascist police state.

  Glenn Fiddich, Northampton, Broken Britain

  Well said David Russell! I Always thought Councillor's were to "Look after the Well being of their Constituent's", obviuosly I "Am Misguided"!

  Paul, Manchester, UK

  this is totally indefensible. this government and their behaviour depresses me so much. they are absolutely ruining our country, destroying hundreds of years of hard won liberties, trashing our economy, wrecking our society. i cannot wait to vote them out at the next election.

  mike, whitfield,

  Sir Jeremy Beecham, the vice-chair-man of the Local Government Association, said: “People struggling to pay bills are given as much leeway as possible.”
  
  and just how much are you given by the taxpayer???
  

  tone, cambridge,

  Goodbye Labour hypocrites. Greedy grasping mendacious Gordon led by ruthless and ambitious Mandelson will bury Labour for a generation.

  Eve , london,

  The Council Tax, per se, was a much fairer system that the one the preceeded it, Rates. It was unfortunate that Mrs Thatcher chose to use the Poll tax as an instrument with which to beat the local councils - and that beat her.
  
  There is no such thing as a free lunch

  Doug, Bristol, UK

  The game will soon be up for the index linked Shire Hall cuckoos and they need to be turfed out of their nests along with their pension nest eggs forthwith. A cosy cabal within a society is unacceptable immoral and unpatriotic.

  Steve Merchant, Shrewsbury, England

  This is more like some sort of organised crime protection racket. The "Dons" have got used to a lifestyle of high earnings and luxury living which they intend to keep by using enforcers who can legally break into people's houses, pin them down and plunder their belongings.

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