Your failure to pay council tax and national non-domestic rates can result in a local authority taking legal steps against you to recover the owed amount. In such circumstances, they should have exhausted all communication forms, including reminder notices and a final notice requesting payment in full. They should have also been open to discussing a reasonable repayment plan with you so long as you had communicated any financial difficulties to them.
What is a Liability Order?
If the payment remains outstanding and you have failed to respond to any correspondence, the local authority will have no choice but to apply to the Magistrate’s court to seek a Liability Order against you or your business that is in arrears.
The Magistrate’s court will then issue a notice informing you that a hearing will take place and that you are required to attend to put forward a defence.
Examples of valid defences may be that you are exempt from the payment of Council Tax or that bills and reminders have not been sent to you. If you receive a court summons, you should contact your local authority as soon as possible and before the hearing, to try and resolve the matter beforehand so that it is not necessary to attend court.
If you do not contact your local authority or attend the hearing, the hearing will still go ahead and the Liability Order will likely be made against you.
Once a Liability Order has been granted, the local authority can instruct debt enforcement agents to go to your property to collect the outstanding money. The Order also gives them the following enforcement powers:
- To ask for more information regarding your work, income, expenditure and family circumstances. Failure to deliver this could result in a further court appearance and a fine being issued
- To contact your employer to collect money directly from your earnings
- To make deductions from certain benefits such as job seekers’ allowance and income support
- To request debt enforcement agents to take and sell your goods following the issue of a warrant
- To obtain a charging order against your property, which means that the debt will be repaid before any sale of your property can take place
- To apply for insolvency proceedings such as your bankruptcy or liquidation of your business
- To apply to the court for your committal to prison
Can a Liability Order Be Set Aside?
Where you believe a Liability Order has been issued against you in error, it is possible to apply to the Magistrate’s court to set it aside, but in such circumstances, there are strict criteria to meet. Firstly, an application to set aside such an order must be made promptly. Under case law, this has been defined as needing to be made within days or weeks, rather than months. Time starts running from the date of the order or the notice of the order.
Furthermore, there should be a genuine dispute as to the liability. Disputes as to the valuation of the property would not be considered a valid defence.
It is possible to also appeal a Liability Order by Judicial Review but this is an expensive route to take and therefore not the preferred option in most circumstances.
If a Liability Order has been made against you or your business and you are uncertain of your next steps or want to explore the possibility of setting aside the order, we at Witan Solicitors can assist. Pleas email us.
