Council Tax and business rates recovery procedure policy


This option is only available where the taxpayer or ratepayer is an individual. This course of action is not only administratively costly for all parties but can also have considerable impact both on the taxpayer and members of the taxpayers’ household. Consequently, this will only be considered where:

  • they have sufficient realisable assets e.g. equity in a property to pay the debt and all costs incurred
  • have previously broken agreed payment arrangements or have failed to enter into a payment arrangement
  • are not considered to be vulnerable
  • all other enforcement remedies have been exhausted

No bankruptcy proceedings will take place without attempting to contact the taxpayer or representative.

A statutory demand will be served on the taxpayer setting out the debt outstanding, and the options available to them to prevent further action, the time scales in which they need to respond (21 days). A guide to the potential bankruptcy costs is included with the statutory demand. No additional costs are incurred at this stage, and we may agree a payment arrangement with the taxpayer.

Where, after 21 days, the tax/ratepayer has not responded to the statutory demand or we are unable to agree arrangements that will discharge the debt; we will consider whether a petition for the taxpayer to be made bankrupt should be issued.

Before a petition is issued, we will make all reasonable attempts to find out what the tax/ratepayer’s personal and financial circumstances are and to determine whether they or other members of the household may fall within our vulnerability criteria as described in appendix 1. A petition for bankruptcy will only be authorised by the Head of Revenues.

Where, from information provided by the tax/ratepayer or their representative, or other sources there is evidence to suggest that the taxpayer or other members of the household fall within our vulnerability criteria, the case will be reviewed by a Senior Recovery Officer to confirm that bankruptcy is appropriate.

Where we consider that bankruptcy action should continue, a petition will be served on the tax/ratepayer, advising them of the date and time of the bankruptcy hearing. The serving of a bankruptcy petition will result in significant costs being incurred.

It is essential that the taxpayer or ratepayer attends this or any adjourned hearing to make representation to the judge as to why the order should not be made. Where the taxpayer or ratepayer fails to attend, the court will determine whether the issue of a bankruptcy petition should be made. Once the order has been made the matter will be referred to the Official Receiver for Trustees to be appointed