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Tackling tax evaders
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"17/08/2009
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New research shows that at least 20 per cent more council tax could be collected each year from people who have the means to pay but are not doing so. For the last financial year, this amounts to some £127 million out of a total of £636 million of uncollected council tax in England.
Although a significant proportion of council tax is owed by people in genuine financial difficulty who lack the means to pay, new research from Experian suggests that at least 20 per cent of outstanding council tax is owed by people who have the means to pay but avoid meeting their obligations.
Local Authorities in England achieved a 97 per cent success rate last year in the collection of outstanding council tax, amounting to more than £20 billion. This money has helped fund vital community services in each local authority area. However, a significant sum remains outstanding because Local Authorities lack the information to make a clear distinction between those who cannot pay from those who do not want to.
Simon Waller, responsible for revenue assurance at Experian, commented: “It is clear that a more individualised approach to debt collection is required to ensure those that have the means to pay their council tax are obliged to do so. At the same time, it is essential to identify people in genuine financial difficulty and who lack the means to pay their council tax.
“By making this distinction, local authorities can tailor their communications and collections processes accordingly. Experian has developed a score-based assessment which enables debtors to be ranked in terms of their propensity to pay and this is now being used by a number of local authorities across the UK.”
Neil Harrison from South Tyneside Council added: “A more analytical approach using Experian’s score-based assessment has given us far greater insight into our citizens and helped us collect significantly more revenues to fund vital services. Through a better understanding of people’s financial circumstances, we are in a position to take a more discretionary approach to collections, concentrating our efforts on those unwilling to pay whilst providing help and resources to those people in genuine financial difficulty.”
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