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10 Chartered Accountants


HMRC trialling self-assessment checks to help local authorities to recover council tax
03 October 2019

HM Revenue & Customs (HMRC) has announced that it is entering into data-sharing arrangements with local authorities to help clamp down on council tax debt.

In the 2017/18 tax year, councils in England had an £818 million deficit for council tax arrears, which has prompted HMRC to work with local authorities by sharing information about taxpayers.

The information-sharing agreement with 29 English councils began as a one-year trial in June and allows local authorities to seek information from the tax authority about employment and self-assessment records for a sample of residents who had not paid their council tax and received a magistrates’ court liability.

HMRC said: “The purpose of the pilot is to measure the potential yield the local authorities could have if they were to use HMRC data for an attachment of earnings order.”

The trial will see non-paying residents with an income contacted and told to start paying their debts or have their debts deducted directly from earnings via their employer.

A number of councils are participating in the scheme and are, on average, sharing around 4,000 data records.

The councils involved include Birmingham, Bradford, Brighton, Coventry, Ealing, Islington, Kensington and Chelsea, Manchester, Medway, Newham, Southwark and Tower Hamlets.

It is hoped that the pilot schemes will test whether debts can be managed and recovered using HMRC data. It will end in May 2020 and will be followed by a review to assess whether the data exchange is an effective way to increase debt collection rates.

Link: Pilot scheme launched to help recover millions in unpaid Council Tax

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