Council tax debt is not a crime. "Let’s stop treating it like one.”

Council tax – non payment can send people to prison.

Once upon a time, a woman found herself unable to pay her debt to the local council.  They sent her to Court where the local magistrate decided she had wilfully refused to pay her council tax or had been wilfully negligent. He sent her to prison for 3 months.

Is this a story from a Dickens novel? In one of Charles Dicken’s most well-known stories, the hardships of the Victorian workhouse led Oliver Twist to utter the famous phrase ‘Please Sir, I want some more’.

A bygone age. when people were sent to debtor’s prison for owing money and being unable to pay their debts. But our story is happening now, nearly 200 years after the first ‘poor laws’ were introduced in 1834.

Struggling with debts in a bygone age.

According to a summary from the National Archives there was a time when before 1834, there was a suspicion amongst the middle and upper classes that they were paying the poor to be lazy and avoid work. Consequently a new Poor Law was introduced in 1834. The new Poor Law was meant to reduce the cost of looking after the poor, [And] impose a system which would be the same all over the country.

Under the new Poor Law, parishes were grouped into unions and each union had to build a workhouse if they did not already have one. Except in special circumstances, poor people could now only get help if they were prepared to leave their homes and go into a workhouse.

Not surprisingly the new Poor Law was very unpopular. It seemed to punish people who were poor through no fault of their own.

Struggling with debts today.

The new Universal Credit system has been introduced to reduce the cost of social welfare and to bring a system which will be the same across the UK. It seems, not such a new idea after all.

The woman in our story is not alone. While council tax debt is not a crime, councils can and do send people to prison for up to 3 months for non-payment.

Campaigners are calling for it to end describing it as a “legal anomaly.  The rules in England and Wales also differ significantly not just from the rest of Europe but also the rest of the UK.

Last year A Freedom of Information request revealed that 99 out of 279 local authorities took court action for imprisonment against 4,817 people in 2016/17 . Up by more than 10 per cent compared with 2012/13.

Topping the list was Bradford Metropolitan Council, which launched court proceedings against 969 people. This resulted in 18 people being jailed. In second place, committing 14 people to prison, was the Vale of Glamorgan Council. Coventry City Council was the second biggest user of court action for imprisonment. It recorded 156 cases and five prison sentences.

There are huge regional inconsistencies in the figures. Many institutions are saying it is a postcode lottery on whether you could end up in prison. They are calling for an end to what they call a “draconian sentence.” They continued that there is a need to raise awareness of the negative impact of court actions on families and vulnerable individuals.

Debt Charities speak out.

The head of advice sector policy at one debt charity issue a report stating. He is urging councils to think twice about dishing out tough penalties to those already experiencing severe hardship.

“Court action and the threat of prison are deeply distressing for the most vulnerable householders, who believe they have been unfairly lumped together with criminals,” he said.

“Each day, our advisers speak to callers who find themselves in a difficult situation.  Because of relationship breakdowns, illness or unemployment, or a combination of these factors. In most cases, there is no lawful reason to jail someone. But even the threat can be very damaging. While the number of imprisonments has actually dropped since 2009/10, the threat of imprisonment is being more widely used.

“Receiving court letters, let alone having to find legal advice and stand before magistrates, is terrifying and completely out of proportion when no offence has been committed.

Many people struggle to plug the gap between their income and their bills. As a result council tax debt is a growing problem across the country. Threats of imprisonment is not the right answer to this problem.”

Threats of imprisonment is not the right answer to this problem.

He continued, the approach to council tax debts was “completely out of step with the way other debts can be recovered”.

“You can’t go to prison for failing to pay an electricity bill or your rent,” he added.

“It’s time the law was changed in England and Wales so that council tax debt collection focuses on the circumstances, income and assets of a person and is not used to threaten their liberty.”

The average council tax debt in the cases cited in the report was £2,213.

A magistrate can impose up to three months in jail for non-payment of council tax.

Before imprisonment can be considered, the council should try to recover the debt using bailiffs and must “enquire” into the defendant’s means to pay.

The chief Executive of the Institute of Money Advisers (IMA) said: –

“Imprisonment does not clear their debt. In fact, it usually increases it further. Putting people in prison makes it harder for them to make payments and can cause chaos in their work and family life. On top of that, taxpayers also have to meet the costs of prison.”

“As well as action by Government and local councils, we need improved training for magistrates and court staff.  Dealing with the growing number of people who have serious money problems requires expertise.

“Debt is complicated, and officials need an informed, professional understanding of the realities of living with financial difficulty.”

Low incomes and rising costs of living push more into “can’t pay”

The debt advice policy co-ordinator for another debt charity said:-  The rising cost of living and the squeeze on real wages makes it much more likely that those struggling to cover their council tax costs fall into the “can’t pay” category than the won’t pay one

“Aside from committal, powers to recover council tax are already extensive. Including the ability to directly deduct arrears from benefits or income.  Beginning bankruptcy proceedings and, if the debtor is a homeowner, placing a charge against their property.

He worries that people don’t realise how serious getting behind on their council tax is until far too late. Councils will typically send out one or two reminders before escalating the matter to the courts. Compare this to consumer creditors who the Financial Conduct Authority (FCA) is encouraging to avoid the use of courts and bailiffs. [And] instead explore reasons for their customers failing to pay before coming to a solution that fits their customers’ financial circumstances.

The use and powers of bailiffs is currently also under scrutiny by debt charities and consumer groups.

Prison sentences rise by 11% in 4 years.

In England and Wales, a jail sentence is one option for a magistrate who determines that the individual has wilfully refused to pay their council tax or has been wilfully negligent. Magistrates usually also have the power to dismiss the case and write off the debt if they see fit.

Recent data suggests more than 4,800 people were taken to court and threatened with prison for not paying a council tax debt in 2016-17,

The figure has risen 11% in four years. This despite 2013 government guidance saying court action should be a “last resort”, the Institute of Money Advisers said.

At least 62 people were locked up in England and Wales in 2016-17.

The Local Government Association said it was “essential” to collect funds.

“It is not fair for the overwhelming majority of citizens that pay their council tax to let those who don’t pay their fair share continue to do so,” it said.

Council tax is spent on services such as care for vulnerable adults, looking after children, and road repairs.

The majority of people formally threatened with prison cleared their debt. Or managed to negotiate a payment plan with their local authority. Or received a suspended sentence.

In Scotland and Northern Ireland, people cannot be imprisoned for non-payment of council tax.

‘Courts, Out of step’

The Institute of Money Advisers, IMA’s findings – were based on the replies of 279 of 348 local “billing” authorities in England and Wales to a Freedom of Information request.

But the IMA claims courts do not always interpret the law correctly. There is strong evidence that miscarriages of justice have occurred.

In January 2017, London’s High Court found that one woman  from Bridgend in South Wales had been unlawfully imprisoned. For failing to pay £10-a-week towards her council tax debt.

After she failed to keep up with her payments, bailiffs were called. Although she had paid £100 towards the debt she was told it was “too late” and arrested.

She spent 40 days of an 81-day sentence in prison. Eventually being released on bail after lawyers launched emergency proceedings.

Government guidance urges councils to explore other enforcement actions.

Such as direct deductions from benefits or earnings.

The Local Government Association said. “Councils face a £5.8bn funding shortfall by 2020, which is why it’s essential councils collect these funds.

“Councils offer a variety of support to people on low incomes, or who are struggling with financial difficulties.”

Open letter calls for abolition of the regulation that allows committal to prison for not paying council tax. 

In March this year the Guardian newspaper published an open letter.  Signed by Angela Rafferty QC, Chair of the Criminal Bar Association and 57 other prominent people covering many legal associations. The letter called on the government : –

‘To abolish regulation 47(3) of the Council Tax (Administration and Enforcement) Regulations 1992, that allows the committal to prison for council tax non-payment.’

‘Review the court files of all those imprisoned for council tax debt in England and Wales between 2010 and 2017. To identify those who may have been wrongfully jailed and to inform them of this fact.’

“Year after year there have been significant numbers of people being unlawfully imprisoned for non-payment of council tax.”

They finish “Debt is not a crime. Let’s stop treating it like one.”

The Centre for Criminal Appeals, the CCA, is preparing to intervene.

The Centre for Criminal Appeals, the CCA, is preparing to intervene in a judicial review. [Of] the legality of the current system by which people are committed to prison for non-payment of council tax.

Helen Ball, a researcher at the CCA, has identified and reviewed 145 cases since 1980. [where] a person’s committal to prison for non-payment of dues such as fines, council tax and the community charge has been ruled unlawful in the high court.

She said: “Magistrates have often incorrectly concluded that there’s been culpable neglect or a wilful refusal to pay. Moreover, magistrates have regularly failed to properly assess a person’s ability to pay and to consider reasonable alternatives to prison.”

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