A London council planned to take three of its residents to court because they paid too much council tax.

Lambeth Council issued legal proceedings against the trio, who live together in a flat in the south London borough, and a £122 fine to cover court costs for paying £325 instead of £200 to cover their bill for the middle of January to the end of March this year.

Key Points

  • Trio overpaid by £125 but issued with summons
  • Council applied payment to wrong period
  • Council continued action when 'arrears' settled

The bungling council instead applied this payment, made on 26 April, to cover 1 April-onwards, rather than the amount due for mid-January-onwards, which left them behind on payments in the council's eyes.

They had made the additional payment to also cover themselves for April and leave a little left over.

Their payment wasn't late as they paid shortly after receiving their first bill as they only moved in at the start of the year.

A court summons then arrived on 2 June. On that date, they paid an additional £200 to clear the 'arrears' but this was still not enough to satisfy the council, who still insisted they pay the £122 fee or be taken to court.

Only when MoneySavingExpert.com intervened did the council admit its error and drop the case. This followed numerous calls by the residents to the council to make it see sense, which fell upon deaf ears.

One of the trio, who wishes to remain anonymous, says: "This was utterly scandalous. We spent a lot of time trying to persuade to the council how ridiculous it was that we were being penalised for attempting to bring our council tax payments up to date.

"The council refused to admit it had done any wrong. The thought of going to court and possibly getting a mark or judgment against our names has been extremely stressful.

"Common sense took a while to prevail, but only thanks to the help of MoneySavingExpert.com."

A Lambeth Council spokesman says: "We apologise for the inconvenience and stress it has caused. We have arranged for the summons to be cancelled and will be writing to explain this."