Imprisonment for council tax default

Rona Epstein looks at the legal background to the enforcement of council tax debt and the issues raised where defaulters are sentenced to imprisonment.

There are about 100 imprisonments each year of defaulters who owe council tax[1]. These people serve their time and are very seldom given the opportunity to challenge the magistrates' decision to impose custody. In the rare instances when a challenge via judicial review is mounted the High Court almost always quashes the imposition of custody as unlawful.[2] The sentence of imprisonment is very costly for the public purse and does nothing to pay the debt which is due to the council concerned. Why are these unlawful sentences of imprisonment being imposed, and what can be done to end this practice?

This article cannot answer that question, but is intended to stimulate a discussion on the topic. I first look at the statute and case law covering the enforcement of council tax debt. I then summarise the High Court decision on the committal to custody of Amanda Aldous, sentenced by Dartford Magistrates in January 2011 to 90 days in custody for non-payment of council tax, and finally draw conclusions from this case.

The case of Amanda Aldous

On 14 January 2011 Dartford Magistrates committed Amanda Aldous to prison for 90 days for failure to pay Council Tax arrears amounting to approximately £7,000 for the period 2003 to 2009.  She is the mother of five children and had been the victim of domestic violence. Her youngest child was aged 15 at the time and had been diagnosed with autism and other associated conditions.

She was immediately sent to Bronzefield prison where she served 74 days of the sentence. She had not been in custody before and this was the first time she had been separated from her autistic son. The effects on her son were serious and long-lasting; the entire family found the experience traumatic.  On 29 March following a High Court application she was granted bail. On 6 July the case was heard in the High Court. The decision of Dartford Magistrates to commit her to prison was declared unlawful and was duly quashed.[3]

The law governing enforcement of payment of council tax

Statute

Enforcement of Council Tax is governed by Regulation 47 of the Local Government Finance Act 1992 and the Council Tax (Administration and Enforcement) Regulations 1992, SI 613/992.

The relevant parts are as follows:

“(1) Where a billing authority has sought to levy an amount by distress under regulation 45, the debtor is an individual who has attained the age of 18 years, and the person making the distress reports to the authority that he was unable (for whatever reason) to find any or sufficient goods of the debtor on which to levy the amount, the authority may apply to a magistrates' court for the issue of a warrant committing the debtor to prison.

(2) On such application being made the court shall (in the debtor's presence) inquire as to his means and inquire whether the failure to pay which has led to the application is due to his wilful refusal or culpable neglect.

(3) If (and only if) the court is of the opinion that his failure is due to his willful refusal or culpable neglect it may if it thinks fit–

(a) issue a warrant of commitment against the debtor, or

(b) fix a term of imprisonment and postpone the issue of the warrant until such time and on such conditions (if any) as the court thinks just.”

The legislation goes on to say, at regulation 47(7), that the maximum period of time is three months.

Further, the Act provides that if Council Tax is not paid as required a magistrates' court may make a liability order against a debtor.

                Deductions from income support

6 (1) Regulations under paragraph 1(1) above may provide that where a magistrates’ court has made a liability order against a person (“the debtor”) and the debtor is entitled to income support [a jobseeker’s allowance or state pension credit]

(a) the authority concerned may apply to the Secretary of State asking him to deduct sums from any amounts payable to the debtor by way of [that benefit], in order to secure the payment of any outstanding sum which is or forms part of the amount in respect of which the liability order was made; and

(b) the Secretary of State may deduct such sums and pay them to the authority towards satisfaction of any such outstanding sum.

Case law

The case law is extensive and refers to poll tax default because of the very large numbers of people sent to prison by magistrates in the 1990s: 1,426 people in 1993 and 1,361 in 1994. The case law regarding poll tax imprisonment applies equally to imprisonment for council tax default, as the statutory provisions for enforcement are essentially the same. When challenged by judicial review the vast majority of these poll tax committals were held to have been unlawful.

This was for several reasons. Firstly, the debtor was sent to prison as a punishment. The powers of the magistrates are coercive not punitive, intended to be exercised only when the debtor has the means to clear the debt. Thus, the sole purpose of issuing a warrant of commitment is to compel the debtor to pay where he has the means to do so.[4] In R v Leicester Justices ex parte Deary,[5] Brooke J stressed that:

"The court has now repeatedly made clear that the purpose of the powers of the court under Regulation 41 are not the powers of punishment for past misdeeds, but powers to ensure future payment of past liabilities."

Secondly, in some cases, the court appears to have imposed imprisonment as a deterrent to other tax defaulters. Thus, in R v Leeds Magistrates ex parte Meikleham,[6] Dyson J stated:

"It is clearly established that the purpose of imprisonment is to extract payment by coercion and not to punish ... In my judgment there is no power in the magistrates to pass a sentence of imprisonment pursuant to Regulation 41(3) as a deterrent. They would not even have been able to pass a deterrent sentence had this been a criminal case. That is the effect of the Criminal Justice Act 1991.  In my judgment, it is a fortiori in a case concerned with civil obligations."

Thirdly, it has been established that debtors must not be imprisoned if there is an alternative:

"It is established that it is wrong in law to pass a sentence of imprisonment when an alternative to imprisonment is available."[7]

Fourthly, magistrates must not fetter their discretion, and thus deduction from state benefit must be considered as an alternative to imprisonment:

"I am quite satisfied that they [the justices] failed to have regard to the purpose of the legislation by failing to consider the alternative of deducting the applicant's arrears from his income support.  The failure to consider that alternative was, in my view, an unlawful fetter of their discretion."[8]

Fifthly, deductions from benefit should be ordered even if the debtor refuses to cooperate: In R v Hull Justices ex parte Johnson, [9]Schiemann J stated:

"That procedure [to order deductions from social security payments] does not require the co-operation of the debtor apart from an ability of the authority to be able to specify the name and address of the debtor, the name and place of the court which made the liability order, the date when the liability order was made, the total amount of the arrears specified in the liability order and the total amount which the authority wishes to be deducted from income support."

Finally, it has been established that the standard of proof is the criminal standard. In R v South Tyneside Justices, ex parte Martin,[10]Sedley J held that finding that a debtor was guilty of culpable neglect on the balance of probability was not a good enough standard of proof, since the citizen's liberty was at stake. The justices should have decided on the criminal standard of proof, beyond reasonable doubt, or the highest civil standard.

The High Court decision in R (on the application of Amanda Aldous)

In Aldous, above, the High Court found the decision of the magistrates to sentence Mrs Aldous to imprisonment was unlawful on five grounds.

First, the law requires that the Magistrates’ Court making the enquiry required by regulation 47 must treat each liability order, each year of liability, separately. In the case of Mrs Aldous there was no separate enquiry by the Magistrates for each of the separate years of liability.  Following an earlier case, that would be fatal to the decision of the Justices.

Secondly, the requirement is that in respect of each amount there should be an inquiry as to means. In the present case, the enquiry was so hopelessly inadequate as not to meet the requirements of the regulations; there was nothing which could properly be called an enquiry’.

The third requirement of Regulation 47 is an enquiry whether the failure to pay, which has led to the application, is due to willful refusal or culpable neglect. In making their decision the magistrates should have taken into account Mrs Aldous’ offer to pay £20 per week towards discharging her liability. In failing to give proper weight to that factor the Magistrates erred. The Magistrates should have decided whether the failure to pay was due to culpable neglect or willful refusal. In this case, they failed to distinguish between those two and failed to make the finding that was necessary as a precondition to fixing a term of imprisonment.

Fourthly, there is the fact that the purpose of imprisonment under regulation 47 is coercive. There had been no attempt to persuade Mrs Adous to make the payment in any other way, and there appears to have been no consideration of what period would be appropriate to the purpose of persuading Mrs Aldous to pay. There were other ways in which the local authority might have been able to obtain payment, for example, by attachment to the earnings of her husband. 

Finally, the court stressed that it must consider the effect of imprisonment on the children. In this regard it held that although the existence of children cannot keep a person out of prison who should properly be sent to prison, a sentencing court needs to bear in mind what the effect on the children will be; if there are children and if the court does not have the information it needs in order to assess the effect of the parent’s imprisonment on them, then it must make enquiries so that it is properly informed. The court held that those enquiries were not made in this case.[11] 

Conclusion

This case reminds us that the power to imprison people for non-payment of council tax still exists and, as we saw in numerous poll tax cases, it is vulnerable people such as Amanda Aldous who are most likely to be sent to prison. Despite having no income of her own and having caring responsibilities for her children, she was imprisoned for non-payment of a financial liability for which she was jointly and severally liable with her husband.

The serial errors of law on the part of the magistrates reveal the danger of perfunctory justice. As the courts have made clear on very many occasions imprisonment for non-payment of a civil debt should only be used as a last resort. A worrying feature of this case is the apparent lack of awareness of this fact on behalf of those who participated in the hearing that led to Mrs Aldous being sent to prison on 14 January 2011. This case also shows an increasing willingness of the higher courts to give effect to the article 8 rights of parents and children. Whilst caring responsibilities cannot mean that a person cannot be sent to prison, the court must balance the interests of any affected children against the need to send someone to prison. In doing so courts must take notice of the trauma of separation of mother and child. 

Imprisonment for council tax default is unlawful because the law states that imprisonment is a last resort and other methods should be tried first: the courts can either order attachment of payment from benefit if the debtor is unemployed or from wages/salary if the debtor has a job, and from any savings account if the debtor has neither job nor benefit but has assets, so there is always an alternative. Unfortunately, some magistrates impose custody on council tax debtors as a punishment; but this is explicitly forbidden by law. Owing money is not a crime, and imposing any form of punishment is not permitted by law. 

Rona Epstein is a Research Assistant at Coventry Law School, Coventry University. She can be contacted This email address is being protected from spambots. You need JavaScript enabled to view it..

Rona would welcome correspondence from those interested in and concerned by this topic.