[2025] UKUT 2 (LC)

The FTT said that its decision to allow an additional discount of 20% was “more difficult”. It was not possible for MPL to earn the additional policy discount of 20% for prompt payment, because it had not paid the penalty within 28 days of the final notice. The policy did not allow for any further discount so, having arrived at a figure which it considered was in accordance with the policy, the FTT ought to have stopped there with its figure of £8,000 (including the first discount for remedying the breach). But it did not do so, and instead deducted a further 20% to arrive at its final penalty of £6,000.

The second deduction was not intended as an incentive for MPL to pay promptly. It was, as it were, baked into the penalty, whenever it might be paid. It was given explicitly because, in the FTT’s view, the Council “cannot in our judgment be better off for having had to be successfully appealed”. That seems to me to be an impermissible approach.

As stated in the final penalty notice, the penalty determined by the Council was £12,000. It was not £9,000, although the Council was prepared to accept that figure as discharging the debt if it was paid within 28 days. MPL’s appeal to the FTT was against the penalty stated in the final notice, and the FTT had power to confirm, vary or cancel the final notice (paragraph 10(4) of Schedule 13A, 2004 Act). The statutory scheme makes no provision for discounts for early payment and considerations of whether a discount should be allowed were irrelevant to the FTT’s task which required it to consider the figure in the final notice only.

How the Council chooses to deal as a creditor with its own debtors is a matter for it. It is a matter over which the FTT has no jurisdiction and with which it has no business to interfere. It is not for the FTT to declare the Council’s policy to be “unacceptable”, or to punish the Council’s policy choice by reducing the penalty further whether or not it was paid promptly. If MPL wished to challenge the FTT’s refusal to provide a discount after an appeal, the proper place to do so was by challenging the policy in the Administrative Court.

I should add that I can see nothing wrong with a policy of allowing a voluntary discount for prompt payment but withholding it where an appeal is pursued. The benefits to a local authority of early payment are obvious; it secures payment, avoids enforcement costs, and is likely to mean that there will be no appeal with all the additional irrecoverable expense that entails. The value of those benefits will be largely or completely eliminated by the cost of an appeal, whether it is successful or unsuccessful. In those circumstances there seems to me to be nothing unjust or unacceptable in a policy which refuses to allow the same discount for prompt payment after the amount of a penalty has been redetermined on an appeal.

For these reasons the FTT was wrong to allow a gratuitous discount from the penalty it considered appropriate under the Council’s policy.