How should an Attachment of Allowances Order be handled by an employer?
The Local Government Finance Act 1992 makes provision for "billing authorities" to levy council tax in respect of dwellings in the authority's area. The total amount levied is the amount required by the billing authority itself, plus the amounts levied by "precepting authorities", such as a police authority, a fire authority or a county council.
The rules relating to the enforcement of the collection of council tax are set out in the Council Tax (Administration and Enforcement) Regulations 1992. After having served a final notice on a person who has failed to pay a council tax bill, the billing authority may apply to a magistrates' court for a liability order in order to enforce payment. If payment is still not paid following a summons, the court issues a liability order for an amount that covers the amount of council tax owed and the costs incurred by the billing authority in obtaining the order.
Having obtained the liability order and if the debt remains unpaid, the billing authority may then issue an attachment of earnings order, requiring the debtor's employer to recover the council tax from the debtor's earnings.
The procedures for the issuing and handling of Council Tax Attachment of Earnings Orders (CTAEOs) are set out in Regulations 32 to 43 of the Council Tax (Administration and Enforcement) Regulations 1992.
Tucked away behind the CTAEO procedures, in section 44 of the same Regulations, are the little-known procedures for the recovery of council tax by means of Attachment of Allowances Orders. We will create the acronym CTAAO to describe them.
A CTAAO may be issued by a billing authority to a debtor who is an elected member of a "relevant billing authority" or a "relevant precepting authority".
- A "relevant billing authority" is a billing authority other than the Court of Common Council, i.e. London's elected assembly.
- A "relevant precepting authority" is a major precepting authority other than the Receiver for the Metropolitan Police District.
The individuals for whom a CTAAO may be issued are, therefore,
- the elected local councillors of billing authorities
- the elected councillors of a county council, and
- members of a precepting authority who have been elected to that authority by a constituent council.
What all such councillors have in common is that they receive allowances from their authority, but not a wage or salary. They are not employees.
If an authority receives a CTAAO, the following rules apply:
- the amount deductible under the Order on any day is 40% of the "attachable allowances" payable to the councillor on that day
- deductions continue until the total amount specified in the Order has been recovered
- the first deduction must be made as soon as possible after the serving of the Order
- the total amount deducted must be paid to the billing authority by the 18th of the month following the month in which the deduction was made
- the authority must notify the billing authority
- within 14 days of receiving the order if the debtor is not an elected member
- within 14 days of the debtor ceasing to be an elected member.
The "attachable allowances" from which the money can be taken are:
- basic, attendance and special responsibility allowances for local authority members, paid under section 18 of the Local Government and Housing Act 1989
- allowances for attending conferences and meetings, paid under section 175 of the Local Government Act 1972.
If an authority pays allowances to an elected member outside of the payroll, this process is clearly not a payroll matter at all. However, we are advised that it is very common for councils to pay allowances to their councillors through the payroll, so deductions under CTAAOs will be the responsibility of payroll departments in such councils. It would appear that few CTAAOs are ever issued.
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