Attachment of Earnings Orders

Council Tax Guidance to Employers

Introduction

1. The Department of the Environment, Transport & the Regions has prepared this note to help employers with the administration of Council Tax Attachment of Earnings Orders (CTAEO's).

CTAEO's may be issued by local authorities following the granting of a liability order in respect of a council tax debt in accordance with the Council Tax (Administration and Enforcement) Regulations 1992 (SI No. 613), as amended.

The note outlines the procedures involved and the roles of the employer, the debtor and the local authority.

Some more detailed advice, in the form of questions and answers, is given in Annex A.

2. A CTAEO is a legal document and places certain duties on the employer and the debtor alike. These duties are expanded in the note. Failure to carry out these could lead to a fine.

3. If this is the first CTAEO that you have received, you will note that while they follow the broad principles of AEO's arising from the Attachment of Earnings Act 1971 in that a regular deduction is to be made from net earnings, there are, however, a number of important differences. For instance, with CTAEO's the deduction is calculated by the employer rather than specified by the court.

Annex B outlines the action to take when more than one such order has been served.

An Outline of the Procedure

4. The sequence of events leading to the issue of a CTAEO is as follows:

(a) when a local authority issues a council tax bill and a reminder, but does not receive payment, it may apply to a Magistrates' Court for a summons directing a person to appear before the court to explain why the council tax has not been paid;

(b) if non-payment is proved, the court issues a liability order for council tax payable, plus the costs incurred by the local authority in obtaining the liability order. Once it has obtained a liability order, the local authority has a number of options, including attachment of earnings, for recovering the amount stated in the liability order;

(c) if it considers attachment of earnings is the appropriate course, the authority will issue a CTAEO to the employer whom it believes has the debtor in his employment, sending a copy of the order to the debtor.

The order is in a standard form prescribed in regulations to ensure a consistent presentation of information. It must include the prescribed deduction tables and a copy of the regulations, which deal with CTAEO's.

A copy of the order and the required enclosures is at Annex C.

What the employer must do

5. On receiving a CTAEO, the employer must:

• seek to make deductions from the employee's net earnings under the CTAEO as soon as possible (there is a definition of net earnings in Annex A);
• calculate the deductions using the tables in the regulations;
• tell the employee the total deductions made under the order, normally at the same time as his pay statement is issued; and
• pay the deductions to the local authority no later than the 18th day of the month following the month in which the deduction was made.

6. The employer may deduct an additional £1 from his employee's pay in respect of each deduction towards his own administrative costs.

Notifications

7. The employer is required to notify the local authority about certain matters, and may be fined for failing to do so.

Where the employer receives an order relating to someone whom he does not employ he should, within 14 days, tell the local authority. Likewise he should tell the authority when a debtor for whom a CTAEO is in place leaves his employment, again within 14 days.

The employer should also tell the relevant local authority if anyone subject to a CTAEO becomes his employee. This should be done within 14 days of the debtor becoming the employee, or of the date when the employer becomes aware that an order is in force against the employee, whichever is latest.

What the debtor must do

8. A debtor must tell the authority, which made the CTAEO, if he changes employment. In notifying such a change, the debtor should give details, in so far as he is able, of his earnings; expected deductions from such earnings in respect of income tax, national insurance and superannuation; the name and address of the employer and his work or identity number.

This information must be given within 14 days of the change of employment. Debtors could be subject to a fine if they fail to notify local authorities in this way.

What the authority must do

9. An authority must tell the employer when the whole amount to which a CTAEO relates has been paid, including when payment was not made by means of a CTAEO.

10. An authority may, on its own account, or on application by the debtor or the debtor's employer, make an order discharging the CTAEO. Where a CTAEO is discharged, the authority should notify the employer.

More detailed advice

11. Annex A sets out some questions and answers which cover the handling of CTAEOs in more detail. If you have difficulties which cannot be resolved by the authority which has made the order, further advice can be obtained from the CTAEO Helpline at the Department of the Environment, Transport and the Regions, LGT Division, Zone 5/H2, Eland House, Bressenden Place, London, SW1E 5DU.

Telephone - 01718 904187.