Do you need help with council tax arrears? Whether you already have council tax arrears or think you’ll have them soon, this guide is for you. 

We discuss everything you need to know about council tax debt and the process your local authority will take to collect it. If you are struggling to pay your council tax, you’re going to want to hear this!

And don’t forget you can get amazing advice from charities and organisations for free!

Is council tax debt a priority debt?

Council tax debt is classified as a priority, which means you should aim to pay council tax bills before other debts, such as loans or credit cards. However, you shouldn’t ignore any type of debt and you can get solutions to tackle them all at once, like an IVA

Find your best debt solution

This 4 question debt calculator will tell you if you’re eligible.

What is the total amount of your debt?

How do I deal with council tax arrears?

If you have or expect to have council tax debt, you should make contact with your council and explain why you are struggling to pay your council tax. By speaking with them, you may be able to agree to an affordable payment arrangement. And you may qualify for a council tax reduction. 

Can you get a council tax reduction?

You can get a council tax reduction if you live alone, live with non-payers, such as full-time students, apprentices, diplomats and other qualifying adults. You can also reduce your council tax payments if you have a low income and receive some benefits, such as income support pension credit, employment and support allowance, universal credit or jobseekers’ allowance. 

Charities will also provide advice on these types of discounts. 

Can I backdate a reduction?

You can typically backdate a reduction easily for six months. However, you can apply to backdate council tax overpayments until you started paying, but you may need to provide extensive evidence and an explanation as to why you never applied for a reduction. 

What happens if you wrongfully claim a reduction?

If you claim a deduction you are not eligible for, you can be charged penalty fees up to £1,000. If you make a mistake applying for a reduction and then notify the local authority, you can avoid paying any fees. 

Incorrect reductions can be backdated too, which can put you into arrears. 

What happens if you ignore a council tax bill?

If you have not been paying your council tax, you should expect the local authority to send you a reminder asking you to pay all the outstanding council tax on your account. They will tell you that you must pay within 7 days.

If seven days to pay is not enough or you have trouble paying what you owe, it is best to reach out and speak with the council – and hopefully agree on an affordable payment plan. 

If you do nothing, the local council will send a final notice. This letter will ask you to pay a full year’s council tax (the remainder of the financial year) or face legal action. If they do take legal action, your debt can increase.

Here is what can happen if you ignore a reminder to pay the money owed:

  1. Liability order

The council may ask the court to issue a liability order, which essentially makes you legally responsible to pay the unpaid council tax money. The £20 fee will be added to the debt. 

  1. Debt enforcement 

If you haven’t already, it’s best to get free debt advice from a charity at this stage. 

The council can then use the court order to enforce the debt, i.e. take further action to make you pay. They could:

  1. Use an attachment of earnings to take payments from your wages or from DWP payments you receive. Your employer could be forced to pay some of your weekly or monthly wage to the court, and they will then send this to pay the tax. 
  2. Use a charging order to take the payment owed from any property sale
  3. Make you bankrupt (in specific circumstances!)

But the most common action taken is to use bailiffs. 

What to expect from council tax bailiffs

Enforcement agents, otherwise known as bailiffs, will send you a letter asking you to pay the council tax you owe. 

Seek advice from a charity if you are dealing with a bailiff company!

They will send a notice letter asking you to make a full payment or contact them to agree to a CGA, which is a repayment plan secured against your possessions. If you don’t do anything within 7 days (not including holidays and Sundays), the bailiffs will attempt to come to your property and seize possessions which are then sold at auction to pay the council tax debt off. 

Paying council tax debt back becomes more expensive at this stage, as you will need to pay bailiff fees, including an initial £75 for sending you the first letter. If the bailiffs have to visit you, fees are an additional £200+.

Ignoring bailiffs can be costly!

Can you be sent to jail for council tax arrears?

You can be sent to prison for up to three months if you do not pay your council tax arrears. But it is quite rare to go to jail unless you have willfully neglected the debt or rejected all types of payment. 

In 2019. The Guardian newspaper reported that an average of 51 people were imprisoned for these types of debts between 2013 and 2019. 

If the local authority still doesn’t get your council tax payment, they can apply for a hearing at the Magistrates’ Court. You will be summoned and you must attend or an arrest warrant can be issued. 

If the judge believes you have willfully rejected the debt, they may send you to prison. If you do go to jail for unpaid council tax, you are still required to pay this tax, as well as your arrears.

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

In England and Wales, your council tax debt can be chased until it becomes Statute Barred as per The Limitations Act 1980. The council will have six years until the debt originated, or until you last paid towards it, to collect the money. After this time, the debt becomes legally unenforceable. 

However, in Scotland the situation is different and local councils there have 20 years. Scotland has the equivalent laws, but council tax debts are not covered within those equivalent laws.

It is unlikely that a council will not track you down in either of these timeframes. 

Seek advice if you think your debts are legally unenforceable and shouldn’t be asked to make a payment.

Can council tax arrears be written off?

Some councils will write off council tax debts if the debts are not likely to ever be repaid, such as in severe financial hardship. Other ways to write off these debts is to use a Debt Relief Order (DRO).

This is a debt solution for people with limited disposable income and no valuable assets, such as a house. The DRO will ban all creditors including a council, from making contact to ask for a payment, or threaten bailiff action, for one year.

At the end of this year, if the debtor’s financial situation hasn’t improved, all debts are written off. 

Can I make a complaint about my local authority?

If you think your council has acted inappropriately or is making a mistake, you should lodge a complaint directly to the council. 

Where can I get further help?

You can get further help and support by using the free debt advice from charities like Step Change or National Debtline. 

The debt advice you receive will be confidential, sympathetic and non-judgemental. 

And remember that you can find lots of easy-to-read guides and answers to common questions from MoneyNerd. We cover all topics to help debtors with plenty of useful resources and letter templates to boot!

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more