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Pento currently supports automatic calculations for CTAEOs (Council Tax Attachment of Earnings Order) only. We will be introducing automatic calculations for AEOs & DEAs soon.
What is a council tax attachment of earnings order?
Where there is non-payment of council tax, the local authority can apply to a magistrates' court for a liability order against the defaulter. If a court grants a liability order, an authority has several options for recovering the outstanding amount. One of these is a Council Tax AEO (CTAEO).
The CTAEO will be in a form prescribed in the regulations. It contains the name of the debtor, their payroll number (if known) and the local authority reference. It confirms that the named person is liable for council tax and specifies the amount of council tax that has still to be paid. Deductions in line with the order should be made as soon as possible after the order has been received.
What are your obligations?
On receiving a CTAEO the employer must:
- seek to make deductions from the employee's net earnings under the CTAEO as soon as possible.
- calculate the deductions using the tables in the regulations.
- tell the employee the total deductions made under the order, this will be on their payslip.
- pay the deductions to the local authority no later than the 18th day of the month following the month in which the deduction was made.
Pento will automatically deduct the employee's periodic deduction based on the below tables:
Adding a CTAEO to an employee in Pento
To add a CTAEO to an employee, please follow the steps below:
- Select Employees from the left sidebar
- Search and select the relevant employee
- Select the Pay items tab
- Select Add pay item
- From the list of pre-defined pay items, select Attachment of Earnings
- You will see a screen similar to the below:
Type of Order
- Select CTAEO from the Type of order dropdown list
- Enter a reference for this order. We will ask for a payment reference in a subsequent step
Start of Order
- Please select the date the order should start in Pento
- Select Next
Total amount owed
- Please enter the total sum owed. You can find this in the order letter
Enable protected earnings
The order letter should state if there are any protected earnings for the employee; this is the amount the Court or another institution calculates as the minimum net pay the employee can receive.
- Please tick Enable protected earnings if the order letter states a minimum sum the employee should receive.
This is a priority order
The order letter should state if this is a priority order. If it does not say what it is, then it is a non-priority order. Priority orders take precedence over other attachment of earnings orders.
- Please tick This is a priority order if the order letter states it is a priority order
Has any of the total amount owed already been repaid?
- Please select Yes if the employee has repaid any amount toward the total order. This can include any repayment in a previous tax year
If you select Yes, you will see further options similar to the below screenshot.
Amount repaid to date
- Please enter the total amount already repaid.
Of that in the current tax year
- Please enter the total amount repaid in the current tax year only.
- Select Next
You can choose if you would like the repayments to the relevant authority to be made via Pento, or if you will be making the payments directly outside of Pento.
- Please enter the Order/Payment reference. You can find this on the order letter. This is required if you select for Pento to make the payments.
Pay order via Pento
Please select Pay order via Pento if you would like to make payment to the relevant authority via your Pento account. Once selected, you will be prompted to enter the recipient's bank details. Once entered, please select Next.
Pay manually outside of Pento
Please select Pay manually outside of Pento if you will be making payment to the relevant authority directly. By choosing the manual payment method, you will be responsible for making payments within the specified timeframes in accordance with the order notice.
Once you have entered all the required information, you will see a summary page similar to the below screenshot. If you have entered any information incorrectly, you can select Back to amend the details. Once you are happy with the details, select Save & Close.