Payplan wrote in documents i pay no council tax, why?

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Bichonlover9
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by Bichonlover9 » Sat May 20, 2017 5:32 am
I am in the process of entering in to an Iva put together by payplan. On receiving the documents to sign, I noted they had me down as paying no council tax untill next year. I can't understand why as I am up to date with my council tax and have no arrears. I rang payplan and got told they need to be included with me paying monthly. I would rather have the council tax included in my expenditure and keep on track with it. Can any advise me why they do this? Thanks
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kallis3
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by kallis3 » Sat May 20, 2017 7:57 am
Hi,

It should be included in your expenses - speak to them again on Monday and ask them to put it in your expenditure.
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Foggy
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by Foggy » Sat May 20, 2017 8:24 am
Some firms do look on Council Tax as credit as, if you pay monthly, you are paying off a debt that was due at the beginning of the financial year. Although this is technically correct, it causes no end of unneeded problems and is another reason I would avoid Payplan myself.

If they will not change it I can only suggest stopping the process with them and looking elsewhere for a more enlightened provider.
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kallis3
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by kallis3 » Sat May 20, 2017 8:36 am
I know it's been a few years, but we had no problems with Payplan and council tax - everything was included which we paid monthly - utilities, insurance, Sky.
redboxtree
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by redboxtree » Sat May 20, 2017 9:00 am
This is based on a court precedent that an IP won the argument on - because the Council Tax is for services in the future it is essentially a debt that should be included in the IVA.

Ridiculous really - even where you are up to date it creates a debt where none previously existed.

Some councils as a consequence are clamping down on this and could reserve their right to charge the whole of the Council Tax in advance.

Monthly payments are discretionary.
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Foggy
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by Foggy » Sat May 20, 2017 10:03 am
redboxtree wrote:
This is based on a court precedent that an IP won the argument on - because the Council Tax is for services in the future it is essentially a debt that should be included in the IVA.

Ridiculous really - even where you are up to date it creates a debt where none previously existed.

Some councils as a consequence are clamping down on this and could reserve their right to charge the whole of the Council Tax in advance.

Monthly payments are discretionary
.


Exactly! The errant ( in my view) firms are creating a problem where none existed previously.
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Oya
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by Oya » Sat May 20, 2017 10:39 am
My council tax is included into my Iva for this year as well. When doing expenture it was included than on the proposal the council was a debtor was well. I received a letter from Stepchange to cancel my direct debit and any payment to the council and the £123 will be paid on top of my monthly Iva payment for the first year. I have spoken to the council and they were ok with it and said it's a known producer and it won't affect my housing benefit or my housing application. I panicked at first but spoken to the council and the stepchange I am ok now.
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kallis3
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by kallis3 » Sat May 20, 2017 2:48 pm
I think this is really bad! Should be included in monthly expenses!
Bichonlover9
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by Bichonlover9 » Sat May 20, 2017 8:22 pm
Thanks everyone for your replies much appreciated. If I tell payplan to exclude my council tax should they listen to me? Just seems stupid as there is no arrears there. Also if I don't go threw my Iva with payplan does anyone have any recommendations for some decent companies?
Thanks
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kallis3
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by kallis3 » Sun May 21, 2017 8:06 am
You will find a couple of firms who post on here and also Vincent Bond who sponsor the forum.
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Michael Peoples
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by Michael Peoples » Mon May 22, 2017 11:23 am
There is no way to exclude the council tax unless it is in joint names and only one party is entering an IVA. It was a court case in relation to an administration/liquidation and involved much greater sums than we are talking here. Previously business rates was an expense of the administration but the IP argued that they should be a debt as the liability falls due in April and the repayment terms are a concession granted by the councils. When you consider the amounts involved in the administrations of Peacocks or BHS for example you can see why the IP would argue this.

The judgment went in favour of the IP and has effectively 'trickled down' into IVAs and council tax. It may seem a bit of a nuisance but it has to be done whether you are in arrears or not. Technically by now paying in full when the bill came out you would be in arrears.
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Foggy
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by Foggy » Mon May 22, 2017 3:07 pm
Thank you Michael. When was this court case re. business rates ? If it has trickled down to council tax, how long will it be before IP's look on car insurance in the same light --- and insurers withdraw cover ?
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Michael Peoples
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by Michael Peoples » Mon May 22, 2017 4:09 pm
I cannot remember the actual case and will find out but it was a couple of years ago and we have been including the local authorities ever since. I suppose it could not happen with insurance as the insurance companies can just cancel the cover and this would lead to clients actually breaking the law. If you do not pay council tax or business rates then the council cannot switch off the streetlight outside your house or refuse to collect your bins so I suppose there is little they can do.

Many councils reject IVAs as they feel they should be a priority payment but this rarely has any affect as their debt is so small. It makes no difference to the client as they are paying out the same amount of money but can be a help to the IP as it means increased contributions until the following April. Not much anyone can do about it as it is the law so hopefully it is a little bit clearer now.
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kallis3
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by kallis3 » Mon May 22, 2017 4:31 pm
But - if you are paying your council tax on time and have no arrears, how can they refuse an IVA?
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Michael Peoples
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by Michael Peoples » Tue May 23, 2017 8:16 am
The council gets included for the amount due in the year in which the IVA is approved. Therefore if the IVA is approved at the end of April then most of the year's tax is still outstanding. If the IVA is approved in December there may only be a small amount due as the bill is normally paid over ten months. The responsibility to pay council tax directly resumes in the year following approval so in most cases approved between April and December the council will be a creditor.
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