Local Taxation Debt Write-Off 2022-23
North Lanarkshire Council · 1 March 2023
Back to Finance and Resources Committee — 1 March 2023 and its agenda
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref EK / GT Date 01/03/23 Local Taxation Debt Write-Off 2022/23 From Elaine Kemp, Chief Officer (Finance) E-mail kempe@northlan.gov.uk Telephone 01698 302408 1. Background 1.1 For the financial year 2022/23, the Council has billed £196m Council Tax and Water Charges and £119m Non Domestic Rates charges. 1.2 The Council follows to best practice and legislation in relation to the recovery of outstanding charges for Council Tax (including water and sewerage charges) and Non Domestic Rates. This includes issuing reminder letters, agreeing payment plans with individuals and business and passing outstanding debt to the Council’s contracted Sheriff Officer, Walker Love, for further recovery action. 1.3 Despite these processes there are a number of debts that are deemed uncollectible. This annual process of assessing the likelihood of debt non-recovery conforms to Executive Summary The purpose of this report is to present to Committee the summary of outstanding local taxation accounts which are deemed uncollectible following all attempts at recovery. In accordance with financial guidelines a provision for credit losses has previously been established for the outstanding accounts. The total recommended for write-off for 2022/23 is £5,350,609.52. Recommendations It is recommended that Committee: (1) Acknowledge the decision of the Chief Officer (Finance) to write off £2,028,171.32 for debts under £500 under delegated responsibilities. (2) Approve the write off of all items over £500 to the value of £3,322,438.20. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (21) Continue to identify and access opportunities to leverage additional resources to support our ambitions
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accepted best accounting practice and reflects a reasonable assessment of expected income. 1.4 Despite the recommendation for write off, there will continue to be an appraisal of outstanding balances to re-assess those which are deemed uncollectible, especially where circumstances may have changed. 2. Report 2.1 An analysis of outstanding balances has been conducted and £5,350,609.52 has been identified as uncollectible: Cause Analysis Council Tax £ Non Domestic Rates £ Total £ Deceased 2,381,249.08 38,568.35 2,419,817.43 Liquidation / sequestration etc 1,149,152.94 1,781,639.15 2,930,792.09 Total 3,530,402.02 1,820,207.50 5,350,609.52 Value Analysis < £500 2,019,684.70 8,486.62 2,028,171.32 >£500 1,510,717.32 1,811,720.88 3,322,438.20 Total 3,530,402.02 1,820,207.50 5,350,609.52 2.2 The values written off during 2021/22 were as follows: Cause Analysis Council Tax £ Non Domestic Rates £ Total £ Deceased 479,977.91 20,462.77 500,440.68 Liquidation / sequestration etc 526,462.13 2,013,008.98 2,539,471.11 Total 1,006,440.04 2,033,471.75 3,039,911.79 2.3 Collection of local taxation is sought from all payees in the year of liability and subsequent years with use of diligence as appropriate. The level of in year collection is reported to each committee cycle and monitored on an ongoing basis. 2.4 Over time the collection of outstanding sums is prevented where there is no longer any legal basis to collect. This occurs where a person or business is subject to a sequestration, bankruptcy, winding-up or where the estate of the deceased has no funds to meet the debt and there is no other liable party. 2.5 The increase in the debt proposed for write off in the current financial year relates to a Financial Solutions decision to undertake a comprehensive review of accounts for write off going back to the 1993 Council Tax year. In previous years, the write off review was more focussed on recent Council Tax years. A further breakdown of the age profile of debt proposed for write off is shown in Appendix 1.
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2.6 Council Tax debt for years up to and including 2015/16 have been fully provided for and as such there is no costs to the Council associated with the write-off of these debts. For subsequent years, the Council has made an assessment of likely irrecoverable debts. This assessment is subject to ongoing review as part of regular monitoring of the Council Tax position and a consideration in completing the Council’s statutory accounts each year. 2.7 There is no cost of the Council in respect of the Non Domestic Rates write off as this is accounted for in the pooled funding arrangements with Scottish Government. 3. Measures of success 3.1 The Council continues to take all reasonable steps to recovery outstanding debt. 4. Supporting documentation Not applicable. Elaine Kemp Chief Officer (Finance)
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? The write off of more recent Council Tax debts has the potential to impact on the in year Council income position. However, this is subject to ongoing monitoring of the overall Council Tax position and will be finalised as the Council completes its statutory annual accounts for 2023/23. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐
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5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services.
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Appendix 1 Proposed Local Taxation Write-Off Per Year Council Tax Non Domestic Rates Total Year Amount (£) Number Amount (£) Number Amount (£) Number 1993/94 21,469.34 105 0.00 0 21,469.34 105 1994/95 36,337.73 144 0.00 0 36,337.73 144 1995/96 51,663.07 165 0.00 0 51,663.07 165 1996/97 58,364.17 195 0.00 0 58,364.17 195 1997/98 74,650.09 266 0.00 0 74,650.09 266 1998/99 73,823.05 293 0.00 0 73,823.05 293 1999/00 78,279.26 314 0.00 0 78,279.26 314 2000/01 75,611.20 339 0.00 0 75,611.20 339 2001/02 78,433.46 366 778.91 2 79,212.37 368 2002/03 91,467.47 439 39.52 1 91,506.99 440 2003/04 102,965.84 472 0.00 0 102,965.84 472 2004/05 97,959.27 461 0.00 0 97,959.27 461 2005/06 122,481.03 553 294.35 1 122,775.38 554 2006/07 124,883.82 599 1,302.83 1 126,186.65 600 2007/08 135,955.43 610 3,920.46 3 139,875.89 613 2008/09 147,486.72 626 3,548.14 3 151,034.86 629 2009/10 167,719.89 690 8,596.28 2 176,316.17 692 2010/11 168,219.72 707 390.05 1 168,609.77 708 2011/12 226,007.19 928 729.87 2 226,737.06 930 2012/13 244,707.99 1,017 34,273.42 8 278,981.41 1,025 2013/14 239,194.61 956 98,072.15 5 337,266.76 961 2014/15 247,280.82 896 37,385.57 10 284,666.39 906 2015/16 221,386.75 859 115,891.04 20 337,277.79 879 2016/17 175,112.37 676 116,448.35 24 291,560.72 700 2017/18 161,859.39 626 371,834.98 65 533,694.37 691 2018/19 173,339.10 563 736,486.62 101 909,825.72 664 2019/20 84,083.02 235 235,532.91 40 319,615.93 275 2020/21 16,829.55 61 43,418.85 1 60,248.40 62 2021/22 7,894.02 36 5,586.00 1 13,480.02 37 2022/23 24,936.65 28 5,677.20 1 30,613.85 29 Total 3,530,402.02 14,225 1,820,207.50 292 5,350,609.52 14,517