As we approach the twenty year anniversary of the Poll Tax being abolished, Alan McIntosh looks at what happened to the debt.

The Community Charge, or the Poll Tax as it was known, was introduced into Scotland one year ahead of the rest of the UK. It was to be the final nail in Margaret Thatcher’s coffin and arguably also the Scottish Conservative Party’s. The tax caused huge resentment and many saw it as evidence that Scotland was to be nothing more than a testing ground for the Tories.

Where it destroyed some careers, it made others, throwing the limelight onto Tommy Sheridan, Jim Sillars and Kenny MacAskill, who became the SNP’s Anti Poll Tax spokesman.

It was eventually abolished in 1993 after a massive campaign, which saw at its height one million non payers in Scotland and culminated in some of the worst riots in UK history, mostly notably with what became known as the Battle of Trafalgar Square.

However, despite abolition nearly 20 year ago, information obtained by freedom of information request shows Scotland’s councils are still pursuing over £322 million in community charge arrears, with some taking the view that all debts owed to them can still actively be recovered.

In England most of the debts were legally written off more than 7 years ago, but in Scots law it takes longer to extinguish debts that are legally constituted. Many will only be due to lapse now, although some accounts will still be recoverable for many years to come. Section 7 of the Prescription and Limitation (Scotland) Act 1973 means debts that have been legally constituted only extinguish after 20 years, providing they have not been relevantly acknowledged in that time; or the creditor has not made a Relevant Claim. Relevantly acknowledged means either a payment or a written acknowledgement of the obligation has been made by the debtor. Where a debt has been relevantly acknowledged, the prescription period runs again. A Relevant Claim could be raising a petition for bankruptcy against the debtor or executing diligence (wage arrestment, bank arrestment, attachment etc).

Despite this many local authorities have already taken the view to write off poll tax debts, with Inverclyde Council taking such a decision for its 2011/12 accounts. Other councils, such as Falkirk, have gradually reduced the amount owed by annually reviewing and writing off accounts as uncollectable. Glasgow City Council, however, is still owed approximately 27 pence in every pound that was ever billed (approximately £125 million) and has now taken the view it will still pursue those debts which have not been prescribed under the 1973 Act. Other local authorities such as Edinburgh are owed over £70 million, but cannot say how much is still recoverable, demonstrating the difficulty of doing due diligence on the collectability of such old debts, with many debtors now being deceased or gone away. It also highlights another problem in that in some cases, with old paper filing systems and the fact few debtors still have receipts 20 years on, where there are legitimate disputes, trying to resolve them fairly is impossible.

Debtors, however, are still being pursued and it is not uncommon for debt advisers to encounter clients still facing diligence or sequestration for debts which include amounts for community charge. The recent Scottish Diligence report by the Accountant in Bankruptcy illustrated this point by evidencing the fact that of the 84% of diligences executed in 2011/12 by local authorities, the debts being collected were not just council tax arrears but also community charge debts.

The poll tax was Thatcher’s legacy to Scotland and was widely seen at the time as hugely unpopular and unjust, evidenced by the fact its lifespan was so short and contributed to her downfall. Many of those ministers and councillors now in power will have marched and protested against the tax and been non payers themselves. It’s now therefore, not unreasonable to ask they urge all local authorities to clear old poll tax debts from their books. It’s ironic that where Scots were first punished with the poll tax, we will also be the last.

There is also the other issue of why debtors can still be pursued twenty years on and have diligence executed against them and be threatened with sequestration for debts which they were unable to defend in court in the first place.

John Wilson, the MSP for Central Scotland in the last parliament proposed a new bill to align the powers of councils to pursue tax debts with those of other creditors. Maybe now is the time to dust off that proposal.