The £1m council tax dodge

News story
News story

COUNCIL tax dodgers in Wigan have racked up court costs totalling more than £1m, it has been revealed.

The shock figures show there has been a sharp hike in the amount of money paid back to Wigan Council by debtors for legal charges, rocketing from from £304,000 in 2011/12 to £1.06m in 2013/14. It is thought the dramatic rise is due to the introduction of the government’s welfare reform programme, which has forced 15,000 more Wiganers to pay council tax for the first time.

Since the abolition of council tax benefits and its replacement with a local reduction scheme from April 2013, more households been hit with a larger bill, meaning a rise in court summonses for not paying. In 2012/13 - before the welfare reforms - 14,092 summonses were issued by Wigan Magistrates’ Court for late or non-payment, which racked up a bill of £352,000.

Once the new system had been enforced, 26,943 summonses were issued, costing £1.06m.

Defendants in court are usually required to pay £65 court fees, to cover the costs the council incurs, including staffing and administration overheads, legal fees, stationary, printing and postage, IT systems, office accommodation bills and other outgoings incurred in the processes of issuing reminders, final notices and summonses.

There may also be a need for negotiating and monitoring payment arrangements, chasing non-payment of arrangements, tracing and contacting debtors and implementing the next course of action until a case is paid.

These costs are recoverable from the person summonsed to court, thus minimising the financial burden on the authority and on the taxpayer.

Whilst the council was unable to determine how much each individual owed, the bill of unpaid council tax for 2013/14 is estimated at around £114 per household.

However, the vast majority of money owed by residents is collected, with the local authority successfully collecting 95 per cent of the £117m it was due in 2013/14 and also recouping a further £3.85m in arrears.

A council spokesman said: “The figures account for extra costs Wigan Council incurs taking the case to court to recover the council tax it is due.

“If these additional recovery costs were not paid from those defaulting their payments it would mean the cost of chasing those who do not pay council tax would instead fall on the taxpayers who do pay theirs on time.”