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Councils will be given power to recoup debts direct from employees’ wages

July 05, 2019 / Lauren Brown

Councils will be given the power to deduct tax debts directly from employees’ wages in a controversial move expert have warned could worsen the financial distress of vulnerable individuals and put employers attempting to improve the financial wellbeing of their workforce in a bind. An HMRC-led trial, set to launch on 8 July, will affect individuals in 29 different council areas who are in significant council tax arrears or have received an order to pay from a local magistrates’ court. Councils will have the power to deduct their debt directly from earnings through an employer. The scheme marks the first use of the debt information sharing powers introduced by the Digital Economy Act (2017), enabling local authorities to obtain employer and income information from HMRC. It is hoped the pilot will lead to a decline in the use of bailiffs to reclaim unpaid funds; bailiff fees can increase the cost of a missed council tax payment by more than 1,200 per cent, according to Citize...