|1||Description of Business Requirement|
At 31 March 2018, the total amount of council tax outstanding in England amounted to £3 billion (cumulative from the introduction of council tax in 1993
For 2017/18, Local authorities in England collected £27.5 billion, with arrears of £818 million, approximately 3% uncollected.
The current process for payment of Council Tax is shown below.
This process is dependent on customer engagement – by making prompt payments, responding to reminder letters, providing employer information, court summons etc.
When a customer is unresponsive to communications, the Local Authority will issue a liability order, which informs the customer that the following actions are being considered:
· bankruptcy action against you
· deductions from certain benefits
· deductions from your wages
· committal action, which could lead to a prison sentence
If customers continue to not respond and without any further information, the Local Authorities have little alternative but to refer the case to Enforcement Agents (Bailiffs), a significantly intrusive and costly process.
Using a specific Local Authority as an example, during 2017/18, Brighton and Hove City Council obtained 10,300 Liability Orders at the Magistrates Court, of which over 79% of these liability orders were eventually passed to Enforcement Agents.
The Liability Order and eventual enforcement action adds significant costs to the customers debts. The issuance of a liability order adds
· Liability order adds £xx
· Enforcement Action adds £xx
A proof of concept is proposed to obtain HMRC PAYE and Self-Assessment data to for a sample of 2018-19 customers where Liability Order have been obtained.
To examine if this extra data can improve the recovery of the debt, by taking action that has already been explained to the customer in the Liability Order letter, as follows:-
· identify customers whose circumstances make them vulnerable and providing appropriate support and appropriate recovery action, where they engage with the Local Authority;
· for those in employment, recovering individual council tax debts by Attachment to Earnings Orders;
· for those receiving benefits, recovering individual council tax debts by Attachment to benefits Orders;
· for those are not identified as financially vulnerable, undertaking other recovery action, including the use of enforcement Agents and other legal avenues.
A proposed process map is shown below:-
The proof of concept will quantify customer numbers and debt recovery amounts of the sample and make a comparison against the control group.
The outcomes of this pilot will inform the case for implementing this data share on a national (English-only) scale. It is proposed that a ‘second-phase’ would involve all 418 local authorities and would support the collection of the £3bn outstanding debt.”
To ensure that the proof of concept provides sufficient data for analysis, it’s proposed that it involves A range of local authorities representative of:-
· Types, e.g. Metropolitan, Unitary;
· Geographical (rural and metropolitan);
· Size and economic demographics (variety of band D Council Tax amount);
· Revenue system suppliers.
There are 21 Local Authorities listed, though it is recognised that this number may need to be reduced to satisfy HMRC’s proportionality.
· Increase in identification of financially vulnerable debtors who can then be can be signposted for assistance within or without the council.
· Fairer and more efficient case management
· Increased customer engagement
· Recovery of debt owed
Advise whether any legislative, Ministerial or business critical priorities etc. are in play
The Ministry of Housing, Communities & Local Government has a policy objective to improve the efficiency of council tax collection in England
All English Local Authorities have a strategic objective to improve council tax collections rate.
The Minister for the Constitution has asked for debt pilot options to be presented to the DEA board
Debt data shares are also referenced in the Cabinet Office Debt Function’s Strategic Plan and their Single Functional Plan.
This proof of concept was initiated by the Local Authorities listed in Annex.
Reductions in budgets in recent years has meant a greater focus on maximising income from our revenue streams to support other services
The Key Milestones from HMRC’s perspective will be;
Agree the commissioning and project governance – early October 18
Submit DEA business case, DPIA and Data Usage Agreement documents to DEA Secretariat Team by 8th November.
Present DEA business case to the review board on 15th November.
*If approved seek Ministerial approval by end of November
Commence data share in early December
First report to review board at 4th month of data share
*Please note that additional milestones relating to the application process for the Digital Economy Act are may require revision due to review board and Ministerial considerations.
All other project components will not require resource from HMRC and will be project managed by Michael Sowerby, Fraud and Debt Data Sharing Manager, at the Cabinet Office in partnership with the Local Authorities.
|6||Is access to HMRC Data required?
What specific data items you require? Eg Employer Name, Updated individuals contact details, etc.
This is a “person based trace and match” process that will seek to identify the income and employment status of the individual and the latest address of the individual
● PAYE data, including:-
○ Employer Name
○ Employer Address
○ Employer District Number
○ Employer Reference
○ Employment Start Date
○ Employment End Date
○ Employment Pay Frequency
○ Payment Date
○ Taxable Pay in Period
○ Weekly Period Number
○ Monthly Period Number
○ Payroll ID in this employment
○ Individual Address
● Self-Assessment data, including:-
○ Date SA record set up
○ Tax Return date of receipt
○ Tax Year
○ SA Total Income
○ SA Employment Income (Pay from all Employments)
○ SA Self-Employment Income (Profit from Self-Employment)
○ SA Partnership income (Profit from Partnerships)
○ SA UK Pensions and State Benefits
○ SA Trust and Estates Income
○ SA Foreign Income
○ SA Dividends from Foreign Companies
○ SA Shares Schemes Income
○ SA Profit from UK Land and Property
○ SA Dividends from UK Companies
○ SA Interest received from UK Bank and Building Societies
○ Other Income
○ Gains on Life Insurance Policies
○ Business Description
○ SA Correspondence Address
● Tax credit data, including:-
○ Tax Credits in payment Y/N
○ Child benefit in payment Y/N
HMRC holds data to serve its functions of collecting tax and duties from individuals and companies and for administering tax credits and Child Benefit.
How you intend to use it?
· using attachment of earnings orders, apply for deductions from the customer’s employer
· assess vulnerability
· identify alternative routes of debt recovery
What information do you hold which you want to match to? E.g. Name, NINO, D.O.B., etc.?
Full name and address and where applicable a correspondence address
How often do you need the data or is it a one off?
This is a one off one year pilot.
When will the requirement for HMRC data end?
This initial pilot will last for one year. If value is proven then Local Authorities will apply to the DEA RB such that HMRC data will be shared as BAU.
How long do you intend to retain the data?
For the duration of the pilot, one year
Our view is that BHCC and the listed Local Authorities would have the power to request and share the data described for the purpose of the taking of action in connection with debt owed to a public authority or to the Crown under the Digital Economy Act 2017 [DEA], part 5, chapter 3 (sections 48 to 55 of the act).
(1)A specified person may disclose information held by the person in connection with any of the person’s functions to another specified person for the purposes of the taking of action in connection with debt owed to a public authority or to the Crown.
(2)For the purposes of this section and Schedule 7 debt is owed to a public authority or to the Crown if—
(a)a person is required to pay a sum of money to a public authority or to the Crown, and
(b)all or part of that sum remains unpaid after the date on which, or after the end of the period within which, it is required to be paid.
BHCC and the listed Local Authorities are a ‘specified person’ according to the act, meaning a person specified, or of a description specified, in Schedule 7.
HMRC is a ‘specified person’ according to the act, meaning a person specified, or of a description specified, in Schedule 7.
The exercise of the power is subject to the Data Protection Act 2018 and Article 8 ECHR and could be subject to challenge.
|8||Onward Disclosure of HMRC Data
Any onward disclosure of HM Revenue & Customs data by you or another organisation must be covered by appropriate legislation. Do you intend to disclose HMRC data to another organisation? If so please give details of the disclosure and the legal authority enabling forward transmission.
Data will only be used for management and recovery of council tax debt, data may be added to software supplied by a third party for taking ‘Attachment of earnings” action, this activity is undertaken by the Local Authority staff (the software supplier and it’s staff do not have access to customer data), but limited to that use only, and in accordance with the council tax (Admin and enforcement Regulations 1992, as amended).
If recovery action taken using HMRC data fails, then Local Authorities may refer the customer to a third party Enforcement Agent, however only existing Local Authority data will be supplied to these third parties, no HMRC data will be supplied for this enforcement action, but limited to that use only, in accordance with the council tax (Admin and enforcement Regulations 1992, as amended).
|9||Solution Design Assumptions
Do you have any proposals on potential solutions?
Are you planning on reusing existing data feeds/datasets?
Potentially the Housing Benefit feed, if this gives a similar set of data return (see below).
Do you require a new data feed?
Yes, we assume so as it’s unclear how the data requests will work in this pilot although a gateway for provision of this information has already been established through the Housing Benefit Debt Service project (which we believe may meet the requirements).
Note – HMRC is pursuing implementation of APIs and multiple use of common APIs to share data.
HMRC follows Treasury funding guidance. The costs of supplying you with HM Revenue & Customs data, and any studies undertaken to ascertain how best to supply it to you, must be funded by your organisation. High level and approximate costs can be provided to you at no charge. However, detailed costs can only usually be provided after a feasibility study which you will be asked to fund. This process is in line with HM Treasury guidelines.
Please confirm acknowledgment of this and confirm you have a potential funding source available should you decide to proceed into feasibility and/or full solution. This does not represent a commitment to proceed at this stage.
Yes, funding is available. We expect the savings made to us will far outweigh any initial cost mentioned (cost will be shared amongst the authorities in the pilot).
|11||Exiting the EU
Are you requesting data from HMRC to support activity or analysis arising from or caused by exiting the European Union?
|Security of HMRC Data|
Change of Use
If HM Revenue & Customs provides you with data, it is for a specific purpose. If you wish to change the use to which the data is put in the future, or the means by which it is stored, or extend access to it, you must discuss this first with HM Revenue & Customs to ensure that any proposed changes are covered by legislation.
Any exchange that occurs between HM Revenue & Customs and a third party must be secure, in line with Government security standards and with the agreement of the HM Revenue & Customs Data Guardian for each business area from which data is sourced.
As guardians of the data entrusted to HM Revenue & Customs, we reserve the right to audit your use of any HM Revenue & Customs data provided to you and the steps you take to protect it from unauthorised or inappropriate use.
I have read the notes regarding security of data and agree to meet the costs associated with this request as detailed above.
|Region||Type||Authority Name||Revenues System Used||Band D Equivalent Council tax rate||Council Tax collection rates – 17/18||Average Number of LO’s obtained each year|
|North East||Metropolitan||Barnsley||Capita – Academy||£1660.90||96.07%||15,600|
|West Midlands||Metropolitan||Birmingham||Northgate / RBIS||£1,502.61||94.50%||77,434|
|North West||Metropolitan||Bolton||Capita One||£1,696.00||95.29%||13,000|
|South East||Unitary||Brighton & Hove||Northgate||£1,805||96.02%||10,300|
|South East||District||Eastbourne (Linked with Lewes)||Civica Open Revenues||£1,798.69||96.99%||4,000|
|South East||District||Lewes (linked with Eastbourne)||Capita Academy||£1,944.25||98.23%||3,500|
|South East||District||North Herts||Northgate||1,700||98.20%||3,000|
|North West||Metropolitan||Salford City Council||Northgate||£1,759.05||90%||25,000|
|London||London||The Royal Borough of Kensington and Chelsea||Civica
- Introduction to delivery management
- Introduction to digital business analysis