10:41 AM, 30th November 2015, About 6 years ago 10
I have been made Bankrupt by the Council last week and they managed to prosecute the whole thing without my knowledge.
The amounts of the supposed taxes were staggering and date back to Tony Blair’s reign.
I’m trying to figure out their motives and after many hours googling and I think I have the answer.
At first glance it would seem that if they seriously wanted to collect taxes it would be better to act promptly as soon as they discover they are not receiving payment. But in fact it is more advantageous for them to do nothing, and to do nothing for as long as they can.
It is a sad fact that a lot of tenancies end badly with tenants just disappearing. This is obviously tough on landlords who have now lost rents and it’s tough on Council’s who have now lost taxes.
But no, wait…there is a way the Council can ensure they don’t lose… and all they have to do is… nothing!
As time goes on it not only becomes more difficult for the landlord trace missing tenants to recover rents, but by not joining in the ‘hunt’ the Council manages to silently switch liability for the taxes on to the landlord too!
It is important for the Council to NOT mention unpaid taxes at this point, softly does it, if the landlord is alerted he may still be able to point at the tracks of the tenant – and the game will be up because the Council would have to admit they were aware of the tenant’s existence.
If they can drag out the ‘do nothing approach’ for a period of years then instead of chasing multiple missing tenants who live ’who knows where’ they now have just one easy target, the landlord. Not only is he easy to find, but the size of all the multiple smaller taxes lumped together will hopefully surpass any necessary thresholds for serious action. After sufficient time has passed all this recovery work, (which could potentially tie up a lot of staff), can now be handed to just one Council Solicitor.
To permanently switch liability onto the landlord the Solicitor must now get what’s called a ‘Liability Order’ from a Magistrate’s Court, this is what ‘pins’ any debt to a particular person. The only ‘evidence’ the Council is required to produce is a name (the landlord’s), an address (the landlord’s property), and an amount (any amount will do as no bills need be produced).
Usually between 900 and 1,000 of these Liability Orders will be processed in one sitting (at £130 each netting them.. err.. a lot!). The Court cannot question the reliability of the Council’s figures. Theoretically you can attend the Court and defend yourself, but in practice you are unlikely to even hear of the event. Also, the Council actually print any orders or summonses themselves, the Magistrate just signs off on them. The Magistrates keep no record of these orders (so obviously you cannot appeal to them), and the Council are never required to produce them, ever.
With that done everything else is just formality… Statutory Demand… Bankruptcy Petition… Bankruptcy Order… Bingo!
So that’s my theory. Why tie up all your staff chasing people who probably couldn’t pay anyway? Better to minimise the risk with the ‘do nothing approach’ you’ll make far more than was ever due and no downside. It’s a despicable tactic, but effective.
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