£250k tax debt write-off

Wyre Council is set to write off the tax debt it says it cannot recover.
Wyre Council is set to write off the tax debt it says it cannot recover.
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More than £250,000 in unpaid taxes is set to be written off by town hall bosses in Wyre who say there is no hope of getting the cash back.

Tax-dogers, failed legal action and overpayment of housing benefits are all reasons for the outstanding bill.

Now Wyre Council is looking to write-off the debt, which it says is either unrecoverable or in some cases the amount owed is so small it would cost more to chase it up.

However, several individual debts worth thousands of pounds each are to be written off – including one case where £26,394 in housing benefit was claimed fraudulently.

Coun Alan Vincent, cabinet member for resources, said: “Our collection rates are actually better than expected.

“Benefits changes mean a lot more people now pay council tax and we thought there might be a sharper increase in non-collectables.

“In terms of business rates and pursuing people who have no real excuse for not paying, we are satisfied we have done everything we can.”

Only around 12 per cent of the debt to be written of would have gone to the council coffers as it collects the money on behalf of several agencies, including central government.

According to a report from the council’s corporate director of resources Philippa Davies, the outstanding council tax and business rates debt accounts – worth a combined £177,000 – make up less than one per cent of the total bill from last year.

A further £67,000 in unreturned housing benefits overpayments will be written off, which makes up 3.6 per cent of the £1.9m that has been overpaid in the last three years.

The report adds: “The council aims for 100 per cent recovery of all debts but for a variety of reasons recognises that a small percentage will always become irrecoverable.

“The debts are at a stage where further recovery action is not possible, either because of the age of the debt, the details available are insufficient to continue recovery action, the debt is negligible and it is uneconomic for the council to continue recovery, or it is considered that all avenues of recovery have been exhausted.”

The council uses some of the money it receives through council tax, business rates and other debts to top up a bad debt provision fund that it uses to meet the cost of write-offs.

The council tax write-offs include hundreds off individual debts, with 19 of them worth more than £1,000 each.

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