Tower Hamlets uses new information-sharing powers to recover ‘up to £2.4m’ in unpaid council tax
PUBLISHED: 17:00 02 March 2020
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Up to £2.4million in unpaid council tax could be recovered as Her Majesty’s Revenue and Customs (HMRC) trials new powers in Tower Hamlets.
The council is one of 29 local authorities chosen to pilot a scheme working with HMRC using shared debt information, which could lead to non-payers having their debt deducted directly from their income.
It enables the council to identify and focus on the highest earners in the borough who are avoiding paying their council tax.
Mayor John Biggs said: "By working in partnership with HMRC we can ensure that people do pay when they can afford to pay.
"In a time of budget cuts from central government, every penny matters and council tax payments ensure bins are collected, social care is delivered and libraries stay open."
During the trial, council taxpayers who have avoided payment and have an income will be contacted to start paying their debts.
If they fail to pay, their debt may be deducted directly from their earnings through their employer.
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A sample of around 4,000 council tax defaulters has been sent to HMRC to obtain employment and self-assessment information.
Where the data is matched, they will be contacted by the council to decide on the best course of action to recover their debt or to support them to pay it.
The council offers support and guidance to residents who are struggling financially and need additional help.
Vulnerable council taxpayers are directed to relevant support organisations where they can get help to address any underlying challenges they may be facing.
A 100 per cent council tax reduction scheme is also offered to those who need it.
Councillor Candida Ronald, cabinet member for resources and the voluntary sector, said: "Every pound lost due to the small minority of people who don't pay council tax means frontline services our residents rely on suffer as a result.
"This trial will mean we have more information to prevent non-payment of council tax and the additional money we expect it to bring in will mean more money for these vital services."
The trial, which uses new powers from the Digital Economy Act (2017), will last one year or until the recovery action is completed.