City of Westminster
Decision -maker Date Title of Report
Cabinet Member for May Council Tax and NNDR – Proposal
Finance and Support 2005 to increase court costs for Liability
Services Order applications
Classification Report of
General Release Director of Finance
Wards Involved All
Policy Context To maintain a low Council Tax
Financial Summary It is estimated that the proposed increase in court
costs will generate approximately £320,000
additional revenue in a full financial year above
the 2004/5 Actual and £200,000 in excess of the
Report Author Martin Hinckley on 020-7641-2611 or at
1. SUMMARY OF THIS REPORT
1.1 This report recommends that the Cabinet Member approves a proposal to increase
the level of court costs for Council Tax Liability Order applications from £55.00 to
£85.00 and for NNDR applications from £55.00 to £100.00.
1.2 It should be noted that the recommended increase in the level of costs would be
subject to agreement by Horseferry Road Magistrates Court.
2.1 That Cabinet Member approval is given to the proposal to increase the level of court
costs for Council Tax Liability Order applications to £85.00 and to £100.00 for
NNDR Liability Order applications.
3.1 The recovery processes available for Council Tax and NNDR collection are
governed by statute. Court action is commenced via an application to the
Magistrates Court for the issue of a Liability Order.
3.2 The City Council is allowed to request that the Magistrates Court grant costs on
each Liability Order application. The level of costs for standard applications is
agreed in advance with the court.
3.3 In 2003/4 Horseferry Road Magistrates Court agreed to increase the level of costs
from £40.75 to £55.00. This followed approval of the recommendation to increase
costs in a report to the Cabinet Member for Finance and Support Services dated 8
August 2003 (decision date 18 August 2003).
3.4 In 1997 the level of costs were set at the same level across London, the
negotiations being undertaken by the London Borough of Croydon, who acted as
London’s representative in discussions with the London courts. Since 1997 some
London boroughs have managed to negotiate individual increases with their local
3.5 In 2003/4 the practice of a London-wide agreement was revived by the London
Revenues Group, a group made up of senior Revenues practitioners from the
London Boroughs. This is because when Ealing Council tried to negotiate an
increase with their local court, it was recommended to them that a pan London
approach be made through the Legal Forum for London (i.e. all the London
Justices’ Clerks in solemn conclave).
3.6 The Legal Forum for London has recently agreed revised upper limits for court
costs of £88.00 for Council Tax and £160.00 for NNDR with effect from 1
4. WHETHER TO DIFFERENTIATE BETWEEN THE LEVEL OF COURT COSTS
FOR COUNCIL TAX & NNDR
4.1 The City Council currently has the same level of costs for Council Tax and NNDR
Liability Order applications. It has been identified that some local authorities have a
higher level of court costs for Non-Domestic Rate than Council Tax. It appears to
have been accepted by their local courts that the increase was more in keeping with
the larger sums involved for NNDR, therefore the higher level of costs would be
more of a deterrent.
4.2 In last year’s report recommending an increase in the level of Council Tax and
NNDR costs, it was recommended that the City Council did not differentiate
between the level of costs for Council Tax and NNDR. However, the Legal Forum
for London has recently agreed that it is acceptable to have different levels of court
costs for Council Tax and NNDR. It is therefore proposed that the City Council
approaches Horseferry Road Magistrates Court with an application to increase
NNDR costs to a higher level than that set for Council Tax.
5. THE LEVEL OF COSTS
5.1 The City Council’s neighbouring boroughs have currently set the following levels of
London Borough Council Tax NNDR Liability Order
Liability Order Costs
Kensington and Chelsea £85.00 £100.00
Camden £77.50 £160.00
Hammersmith & Fulham £80.00 £100.00
City of London £50.00 £70.00
Brent £65.00 £65.00
Lambeth £85.00 £100.00
Southwark £85.00 £100.00
Wandsworth £105.00 (Proposed) £115.00 (Proposed)
5.2 It is recommended that the City Council seek to mirror the level of costs applied by
the London Borough of Kensington and Chelsea. Subject to agreement by
Horseferry Road Magistrates Court, the recommended level of court costs being:
Council Tax NNDR
Summons costs £64.30 £74.30
Court Fee £0.70 £0.70
Liability Order costs £20.00 £25.00
5.3 An alternative option would be to increase the level of NNDR court costs to the
maximum level set by the Legal Forum for London (£160.00). This level would
however be out of step with the majority of our neighbouring Inner London
boroughs and represent a 190% increase in relation to the current level of £55.00. It
may also be difficult to obtain the agreement of Horseferry Road Magistrates Court
to such a large increase.
5.4 It is proposed, subject to approval of the recommendations, that the City Council
write to Horseferry Road Magistrates Court seeking an immediate increase in the
level of costs. However, it should be assumed that it is unlikely that any increase
will take effect prior to 1 July 2005, due to the timescales involved in obtaining
agreement from the court.
5.5 It is perceived that Horseferry Road Magistrates Court are likely to accept the
proposed increase without requesting a substantial amount of additional supporting
evidence. Although the increase represents a significant increase on the current
level, it would mirror the level set by our neighbouring boroughs.
5.6 It is anticipated that the proposed increase in court cost will act as an incentive to
the borough’s Council Tax and NNDR payers to ensure that their instalment
payments are kept up to date. It is planned to “advertise” the increased level of
costs within the Council’s Council Tax and NNDR reminder notices (the notices sent
prior to court action).
6. FINANCIAL IMPLICATIONS
6.1 It is estimated that the proposed increase in Court costs will generate approximately
£320,000 additional revenue in a full financial year above the 2004/5 Actual and
£200,000 in excess of the 2005/6 budget.
6.2 Subject to agreement of the proposed increase by Horseferry Road Magistrates
Court, it should be possible to achieve £160,000 of additional revenue in 2005/6
over 2004/5 Actual and £50,000 over 2005/6 budget. (based on an effective date of
1 July 2005).
7. LEGAL IMPLICATIONS
7.1 There are no legal implications arising from this report.
8. INFORMATION TECHNOLOGY, PROPERTY OR CUSTOMER SERVICES
8.1 There are no implications arising from this report.
9. STAFFING IMPLICATIONS / STAFF CONSULTATIONS
9.1 There are no staffing / staff consultation implications to this report.
10. BUSINESS PLAN IMPLICATIONS
10.1 This report meets the Business Plan requirement to maintain a low Council Tax.
11. WARD MEMBERS COMMENTS
11.1 As this report relates to all wards, no ward member consultation was required.
12. REASON FOR DECISION
12.1 The recommended increases will generate additional income for the City Council.
The increased level of costs will also provide an additional incentive for the
borough’s Council Tax / NNDR payers to keep up to date with their instalment
12.2 The alternative options would be to leave the court costs at their current level or to
increase to a level below that set by the Council’s neighbouring boroughs. This
would result in the Council not maximising its potential income in this area.
12.3 An alternative option would be to increase the level of NNDR court costs to the
maximum level set by the Legal Forum for London (£160.00). This level would
however be out of step with our neighbouring Inner London boroughs and represent
a 190% increase in relation to the current level of £55.00. It may also be difficult to
obtain the agreement of Horseferry Road Magistrates Court to such a large
13. OUTSTANDING ISSUES
13.1 There are no outstanding issues.
IF YOU HAVE ANY QUESTIONS ABOUT THIS REPORT PLEASE CONTACT MARTIN
HINCKLEY, CONTRACTS PERFORMANCE MANAGER, ON EXTENSION 2611 OR BY
EMAIL AT firstname.lastname@example.org