If you have missed a council tax payment or fall behind by a significant amount, you probably have lots of questions about what happens next or how to put things right. And you probably want some sound advice. 

The council may take legal action, so it’s important that you do act quickly. 

Read on to discover how to tackle a priority debt like this – and remember that debt advice is always available from charities like Step Change. 

What does council tax pay for?

Council tax is paid on every residential property in the UK and covers local maintenance and services. Your council tax covers bin collection, road maintenance, schools, parks and much more. In Scotland, this tax is also used to cover water rates and sewerage. 

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Do I have to pay council tax?

Nearly every homeowner or renter is required to pay council tax. There are some exceptions for people under 18 or in full-time education. And there are reduced rates for some people based on their personal circumstances and living arrangements. 

Can I get a council tax reduction?

The most common way to get a council tax deduction is when you live alone, or live with someone who is not classed as a paying adult, such as an under 18 or a full-time student. 

There are other ways you may qualify to get a reduction, including if you receive state benefits like employment and support allowance, pension credit, universal credit, income support or jobseekers’ allowance. 

You can also get a reduction if you have a second home or holiday home. 

Contact your local authority for more information

Wrongfully claiming a council tax deduction

If you have wrongfully claimed a council tax reduction from your local authority, they can backdate your unpaid council tax and make you pay the outstanding council tax. They may even issue you with a fine between £100 and £1,000.

If you take in a lodger who doesn’t typically live elsewhere, you should notify the authority of these changes to prevent a wrongfully claiming the single occupancy disocunt. Do this as quickly as you can to avoid fines. 

You may not be fined by your local authority if the mistake was genuine and you notify them first. 

How do I deal with council tax debt?

The most important thing to do when you have council tax arrears is to not ignore them. Hoping that your local authority will stop chasing you can only make things worse.  

Contact the council and explain your situation as soon as possible. You may be able to pay your council tax with an affordable payment arrangement. 

There may be ways to write off your council tax bill too – keep reading!

How serious are council tax arrears?

Council tax arrears are a priority debt, meaning this debt should be repaid before many other types of debt. If you do not pay your council tax arrears off, you might face legal action and enforcement agents. In rare cases, you can be sent to jail. 

The usual process a local authority will follow to recover your council tax arrears is:

  1. Reminder – the council will send you a reminder. They will ask you to make a payment to clear your unpaid council tax within 7 days. You have 7 days to pay, and if you don’t, they will send a final notice asking you to make a council tax payment covering the rest of the year’s council tax, which can be hundreds of pounds. The local council will threaten court action if you fail to pay within 7 days. 
  1. Liability order – the local council will then apply for a liability order from the court. This is a document that makes you responsible for paying your council tax and gives the local authority permission to enforce the debt via different means. The liability order costs £20, which is usually added to your debts. 
  1. Enforcement – the two most common ways to recover payment is using bailiffs or an attachment of earnings. 

Council tax bailiffs

If bailiffs are used, they will send you a final notice asking for full payment of council tax owed, or offer an arrangement to pay in instalments (CGA). If you make an arrangement with the bailiffs, the payments are secured against your valuables. Thus, if there is a non payment, the bailiff can repossess your valuables. 

Only agree to pay how much you can afford within the CGA or you could create more debts elsewhere. 

In the letter, the bailiff will inform you that they intend to come to your home to collect the debt if no arrangements are made to pay within 7 days. 

Can bailiffs force entry for council tax debt?

Bailiffs cannot force entry to collect council tax debt most of the time. There is one scenario where they can force entry, which is when the debtor has missed payments on a Controlled Goods Agreement. If the secured goods are inside the property, the bailiff can use force to enter and repossess them as long as they provide notice. They cannot harm you. 

Council tax bailiff fees

Paying council tax debts early is recommended to avoid bailiff fees. You will need to pay an initial £75 when they send their first letter, and £235 if you don’t agree to make payments and they have to come and visit your home to seize goods. There could be additional fees as well.

If you are asked to pay by bailiffs, it’s wise to communicate with them and seek advice from a charity. Contact the bailiff at this stage to discuss the debt.  

Council tax attachment of earnings

ALT TEXT: tax debts stress

An alternative method local authorities could use is applying for an attachment of earnings. This is when your employer will take money from your wages and transfer it to the court to pay your debt over time. This prevents future non payment because the money is taken from your regular income before you receive it. 

The same can be done from benefit payments. For example, you could have some money taken from the income you receive from employment and support allowance, income support and similar DWP payments. 

Can I write off council tax debt?

You might be able to write off your council tax debt using debt solutions. These are formal or informal solutions agreed with creditors. Not all debt solutions are applicable to council tax debt, but a Debt Relief Order (DRO) could help you wipe these debts. 

A DRO is a solution for people on a low income. If you have less than £50 after paying for your essentials each month, and you do not own property or valuable assets, you may be entitled to use a DRO.

The DRO blocks all creditors you owe money to asking for a payment for a whole year. If at the end of that year your financial situation hasn’t improved, all debts included within the DRO are written off, including council tax debts. 

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

You can only be chased for six years to pay your bill. If your bill has not been recovered during that time in England or Wales, it becomes Statute Barred as per The Limitations Act 1980. At this stage, the debt cannot be legally enforced, which means you can never be forced to pay. 

In Scotland, it’s a little different. Although they have comparable rules, council tax is not included and you can be chased for up to 20 years. 

The reason this law exists is to safeguard the court system from becoming overwhelmed with older cases. If you believe your tax debt is Statute Barred, you should seek advice to clarify the situation first. 

Can I be sent to prison for council tax arrears?

You can go to jail for up to 90 days if you fail to pay your council tax debt. You will only go to jail if you willfully neglected or rejected paying.

If you have avoided bailiffs and other ways to recover the money owed, the council can apply for a hearing at the Magistrates’ Court. You will be summoned to attend and the court decides whether you have not paid even though you have the means to do so. You can be given a prison sentence up to three months if the court believes you are willfully rejecting the debt. 

Willful neglect or rejection is not the same as having a low income and struggling to pay your bill. 

Can Citizens Advice help with council tax debt?

Citizens Advice have specialist advisors who can help you to understand your council tax payments and provide free debt advice. 

They’re not the only ones either. There are lots of charities waiting to help you!

And we are always here to provide you with easy-to-follow information regarding tax debts. Search our dedicated guides to find answers to the most asked questions by debtors.

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
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