Can Councils Backdate Council Tax? How Far Can They Go?

Dealing with council tax debt can feel hard. But, don’t worry, you’ve come to the right place for answers. Each month, over 170,000 people visit our website seeking advice on their debt issues.

In this easy-to-read article, we will help you understand:

• What happens if you can’t pay your council tax.
• How council tax bands work.
• How to ask the council to cancel your council tax debt.
• What the law says about not paying council tax.

Among those seeking support from Citizens Advice, the average council tax debt has remained stable at £1,100 over the last year.¹ So, if you’re feeling overwhelmed, know that many others are facing similar challenges.

With our experience, we’ll help you find a path out of your council tax debt. Let’s get started.

Can a council backdate council tax?

If your home has ever changed tax bands, you might be wondering if the council can backdate charges like this forum user.

Councils can backdate your council tax bill if you have not been paying enough due to a wrongful reduction claim, or give you money back if you should have been claiming a reduction. 

Let’s start with the good news…

Can you backdate a council tax refund?

If you have been paying your council tax in full but were eligible to receive a discount for reasons such as your age (age 18 and below don’t pay), disabilities, or receiving a state benefit like pension credit, your council tax can be backdated and you will be owed a refund. 

You might have credit in the hundreds or thousands of pounds you are owed back.

If you want advice on how to claim a council tax reduction from today, we recommend checking out this handy council tax reduction guide from Citizens Advice!

You can make an application for a reduction directly with local councils. 

Can the council backdate council tax underpayments? 

Of course, it can work the other way as well.

If you have received a council tax refund wrongfully – maybe your circumstances changed – the council can claw the underpayment back.

You can use a Council tax enquiry form to report a change of circumstances. There are sometimes online versions of this form; search their website to find it!

For this reason, it’s always best to inform your local authority if your circumstances or income change, or those underpayments will catch up to you. 

» TAKE ACTION NOW: Fill out the short debt form

How far back can council tax be recovered?

If you have been claiming a council tax reduction in error, the council can recover all the underpayments on your account. 

If you want to claim a refund on overpayments, you can backdate them to as far back as 1993 when council tax was first introduced.

However, you will need to provide good evidence of why you never made a council tax reduction claim in the first place. 

The above is not the same as being chased for council tax arrears. Read on to discover how quickly a local authority must apply to recover your council tax debts before it’s too late. 

How long can you be chased for a council tax debt?

The length of time local authorities can chase you for council tax arrears depends on where you live. For some people it is six years, and for others it can be as long as 20 years. 

In England and Wales, council tax debts are covered within the Statute Barred law.

This is a law that states debts cannot be recovered after six years from your last debt repayment or acknowledgements of the debt. It is a way to put a time limit on debts and prevent the courts from becoming overwhelmed with older debt claims. 

In Scotland, the Statute Barred rule is slightly shorter at five years. However, council tax debt in Scotland is excluded from Statute Barred. The length of time you can be chased by councils in Scotland is 20 years. 

Council Tax Debt Solutions

Here are some debt strategies for handling council tax arrears. Knowing these options can make a significant difference in overcoming financial struggles.

Debt Strategy	How It Can Help With Council Tax Arrears
Flexible Payment Arrangements	Local councils often offer the option to spread council tax payments over 12 months instead of the standard 10.
One-Off Payment	If feasible, pay council tax in full and potentially negotiate a slightly reduced amount.
Hardship Schemes	Council Tax Reduction (CTR) Discretionary Relief Hardship Funds Support for Vulnerable Individuals COVID-19 Specific Support Charitable Grants
Discounts and Exemptions	Check for eligibility for discounts (e.g., single-person discount of 25%) or exemptions (e.g., properties unoccupied due to the resident’s death, properties where everyone’s a full-time student, or a resident has severe mental impairment)
Deferred Payments	Some councils allow deferring payments wherein you’ll pay less now and make up for it later.
Challenge your Council Tax Band	If you believe your property’s council tax band is incorrect, you can challenge it to potentially lower future payments and refund previous overpayments.
Debt Solutions	Certain formal debt solutions like Debt Relief Orders (DRO), Bankruptcy, and Individual Voluntary Arrangements (IVA) can potentially write off council tax arrears,
Professional Debt Advice	UK residents can seek free advice from debt organizations and charities for council tax guidance tailored to their specific financial situation.

What happens if you don’t pay your council tax?

If you fail to make a full payment on your council tax bill, the council will automatically write to your address and request the payment within seven days of the date of the letter.

If you are a person named on the council tax bill, you will be responsible for the payment.

If after seven days the council does not receive your payment, they will make a further request and may even request the full year’s council tax to be paid immediately.

This is a good reason to aim to repay the missed payment within the seven days. 

People on a low income can agree to a repayment agreement that doesn’t cause them hardship. 

Will the council take me to court?

If the council tax is still not paid, they may then start court proceedings and ask a judge to instruct you to pay. 

But before they start this process, they are likely to make an information request via the courts to make sure it is worthwhile taking you to court. For example, they can use this process to find out about how much you get paid or financial details, i.e. if you can afford to repay

They could then apply for a county court judge to make a decision on the case, evaluating evidence provided to them by the council and any of your evidence if you dispute the payment owed.

In the case of council tax debt, the court order is known as a liability order. If the judge rules in favour of the council, you are now legally liable to make the payment as soon as possible. You can accept or dispute the decision. 

What happens If I ignore a liability order?

If you are legally liable to repay the debt and you ignore the judge’s instruction, the council can then apply to use bailiffs to recover the payment. If the bailiffs are not able to recover the payment or agree to a repayment plan (CGA), they will try to repossess goods and sell them to clear your debts. They must inform you of the date they intend to come to your home. 

Some vulnerable people can prevent these bailiffs from coming to their home, even if they are responsible for the debt. But those that cannot are subject to expensive bailiff fees, so agreeing beforehand will benefit you.

Has paying your council tax debt become too difficult?

If you have received a backdated council tax bill or your current council tax repayments have become unaffordable, there are some things you should do first:

1. Call your council to explain the situation. Some debtors hide from the problem but it will make things worse. The council will make adjustments or agree to a repayment plan so the debt doesn’t escalate.
2. Search for a debt advice service from a debt charity. They can support you through the process of making regular repayments and help achieve your aim to become free from debt. They support you to get credit back too!
3. Create a budget to calculate where you can cut spending and how much you can afford to repay in any council tax account repayment agreement. Always do this before you accept any repayment terms. 

Can I Write Off My Council Tax Debts?

You might be able to write off some of your council tax debts wiht a debt solution.

Even if these debts can’t be covered, getting a debt solution might help you get back in control of your finances enough to pay back the council.

There are several different debt solutions available in the UK, so I recommend speaking to a debt charity as soon as possible.

Their advisors will be able to look at your finances in detail and help you work out which debt solution will work best for you.

I have linked a few charities that offer these advisory services for free below.

Individual Voluntary Arrangement (IVA)

An IVA is a formal agreement between you and your creditors. You agree to pay a monthly sum that is distributed amongst your debts, and your creditors agree not to contact you during your IVA.

IVAs typically last for 5 or 6 years, and any outstanding debt is wiped off when it ends.

Keep in mind that IVAs are not suitable for everyone. You need to owe several thousand pounds to more than one creditor to be eligible. You also need to demonstrate that you have some disposable income every month.

Trust Deed

IVAs are not available in Scotland. Instead, you will need to opt for a Trust Deed.

Trust Deeds work in the same way as an IVA – you pay an agreed sum each month that is shared amongst your creditors, they can’t contact you, and any leftover debt at the end of your Trust Deed term is written off.

Debt Relief Order (DRO)

A DRO is a good option for those facing financial hardship with no assets and little income.

For 12 months, you make no payments, but your creditors freeze your interest and don’t contact you.

If your finances haven’t improved during this year, you may be able to write off your unsecured debts.

Bankruptcy

If you have debts but no realistic possibility of ever paying them off, you may need to declare bankruptcy.

Bankruptcy has an unfair stigma attached to it as it may be your only way of getting a financial fresh start. That said, it is a serious financial situation that should not be taken lightly.

Sequestration

Sequestration is the Scottish version of bankruptcy.

If you have little income and no valuable assets, you may be able to apply for a minimal asset process bankruptcy (MAP). A MAP is a quicker, cheaper, and more straightforward version of sequestration, so worth considering.

Council Tax Contact Details

Website:

https://www.gov.uk/browse/housing-local-services/council-tax

References

1. Big Issue – Council tax debt in England