COUNCIL TAX DEBT – CAN WE SELL IT ON?

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  • #20600
    Anonymous
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    Hello

    A colleague of mine has asked me to post this question regarding ctax debt, and would be grateful for any help and advice that could be given

    Are the Council legally allowed to sell off outstanding council tax debt that they are unable to collect to an outside collection agency for a % of the debt outstanding(i.e. if a ctax payer owes £100.00 can we sell off the debt for £10, equivalent of 10p in the £)? My own opinion is we are not, however, my Director has asked for me to seek further opinion.

    #3242
    Anonymous
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    Hello Tricia.
    I have also recently been asked to investigate selling revenues debts, or debt factoring, as it is more commonly known. It occurred to me that if it was a legal option, then the Inland Revenue would probably use this remedy. The Inland Revenue told me that taxation debts could not be factored.
    I also investigated the possibility of debt factoring for overpaid Housing Benefits. A spokesperson for Alex Lawrie Factors, one of the U.K’s largest Factors, told me that “factoring only works for business debts” and “it is industry standard practice not to use factoring for personal debts, as it is cost prohibitive due ,for example, to the number of personal credit checks that would need to be carried out”.
    I could not identify a Local Authority which has been able to factor revenues debts. I could not identify a Factor Company willing to even consider factoring revenues debts. If anyone out there has been more successful than me in this area, please make yourself known, as otherwise, in the words of Alex Lawrie Factors, “I wouldn’t want you to waste your time on this”. Hope this helps.
    Alan.

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