Council Tax and Prison – Risks, FAQs and Tips

Dealing with council tax debt might make you feel worried. You might be thinking, “Can I go to prison for not paying council tax?” and while it’s a valid question, you can rest easy now – you’ve come to the right place for answers.

Each month, more than 170,000 people come to our website to learn about debt solutions, which is not surprising, as the average council tax debt among those seeking support from Citizens Advice has remained stable at £1,100 over the last year.¹ We understand your fears and are here to help.

This article will give you simple information about:

• What happens if you don’t pay your council tax.
• How you might be able to lessen your debt.
• Who goes to prison for not paying council tax.
• What to do if you are in prison and can’t pay council tax.
• If not paying your council tax will hurt your credit score.

We will guide you through all these points so you understand them better.

We know your worries about council tax debt and want to help you understand and find a way to deal with it. Let’s go through your options together.

Can you go to jail for not paying council tax?

The Local Government Finance Act 1992 states that people can be sent to prison for up to 90 days for council tax debts. However, Regulation 47 states that imprisonment should only be considered when the offender wilfully neglects the debt or wilfully refuses.

Thus, not being able to afford the bill on its own does not mean you should be sent to prison. If you cannot afford to enter into any payment arrangement because you are only receiving state benefits, then you have probably not wilfully refused. This not a reason to not pay your council tax.

Whether you have wilfully neglected or refused to make a payment will be a matter of fact and judged on a case-by-case basis. If it happens that you were seen to wilfully reject making a payment then you could be sent to prison. 

But remember…

Prison is only a real possibility if you fail to pay your council tax, or engage with enforcement agents after you received a council tax liability order from a court judge. This means it can only happen late in the process of recovering the costs you owe. 

At this late stage, the council will then apply for a committal hearing at a Magistrates’ Court. 

You will not need to attend the Magistrates’ Court if you pay the money owed before the hearing. 

If you do not pay the amount you owe, you must attend the court to defend yourself and explain to a judge why you have still not paid.

If you do not attend when you should have, a warrant for your arrest may be issued. 

If you are worried about going to prison for not paying council tax, I recommend speaking to a debt charity as soon as possible. Their advisors will be able to look at your situation in detail and suggest your best next steps.

How many people get sent to prison for these debts?

Recent data suggests around 51 people each year are sent to prison for not clearing their council tax debts. 

The Guardian reported in 2019 that in the six years previous, 305 people had been handed prison sentences for not paying council tax debts. 

On many of these occasions, it is believed that they were wrongfully sent to prison because they were experiencing financial hardship rather than willingly neglecting their legal liability to pay. 

What happens if you don’t pay?

As I’ve explained, prison is only possible as a last resort after many other attempts to get you to pay, including court summons.T o illustrate the process better, here is what happens if you do not pay:

If you don’t pay your council tax, your council may send you some reminders and the option to create a repayment plan.

If you carry on ignoring the council and still don’t pay your tax, your council can apply to get a CCJ against you.

A County Court Judgement (CCJ) is an order from a judge that states you have to pay the debt. This means that the court agrees with your council, and you owe the money.

Your judgement will include the following:

• How much you owe
• How you should pay
• Who you should pay
• Your deadline to pay.

Unless you pay within one month of the CCJ being issued, it will be recorded in the Register of Judgements, Orders and Fines for 6 years. If you pay off your debt within these 6 years, you can request that your judgement is marked as ‘satisfied’ on the register.

CCJs are also visible on your credit file for 6 years. This will make it almost impossible for you to get credit during this time.

If you don’t comply with the CCJ, the council can go back to the court to get an Attachment of Earnings Order (AEO). An AEO against you means that money is to be taken from your wages or salary to be given to your council. 

This will continue until all of your debt has been paid.

It is the court that will decide how much you have to pay, and your employer will be legally obliged to take this money out of your pay. But there are a few exceptions to when an order will be granted.

I have listed some of these exceptions below.

• You owe the creditor less than £50.
• You are registered as self-employed.
• You are currently unemployed.
• You are currently serving as a member of the UK armed forces.
• You work on a boat (although not a fishing boat).

Attachment of Earnings Orders are legally binding.

This means that failure to comply with an AEO may result in a fine or, in extreme cases, even imprisonment.

You have 14 days to inform the court that you disagree with the terms of the AEO.

You will need to write to the court and explain why you think the AEO is wrong. From my experience, the most common examples include:

• You think that the court has set the instalments too high
• You want to request that the AEO is suspended while you explain to the court, in detail, why your employment might be affected.

A hearing will then be arranged. You must go to the hearing and take a detailed personal budget and information about any debt repayments or other outgoings that you have.

You can then explain to the judge holding your hearing why you think that the AEO will cause serious problems or how your job will be affected.

» TAKE ACTION NOW: Fill out the short debt form

Instead of going for an AEO, your council may opt for bailiff collection.

First, the bailiff company will send you a letter asking you to pay within seven working days (incl. Saturdays) or they will come to your property to seize valuable goods. This is a Notice of Enforcement and an opportunity to enter into a repayment arrangement and not have to deal with them on your doorstep. 

If you do not pay or enter into a payment arrangement, the bailiff can enter an unlocked property or come through an open door (not a window!) but they cannot force entry to your home. 

They may ask you to pay the amount shown on your bill before taking control of goods, but at this stage they do not have to accept a repayment plan.

These bailiffs will charge you fees that will be added to the total value of your outstanding debt.

These fees are generally quite similar, and some bailiff charges are even standardised. County Court bailiffs, for example, have set fees of £75 for a Notice of Enforcement and £235 if they have to actually enforce the debt.

Keep in mind that the enforcement fee can be a bit higher. Usually, they will charge an extra 7.5% of your debt if that debt is over £1,000.

This means that if you have a debt of £1,500 that you don’t pay, you will be charged:

• £75 for Notice of Enforcement
• £235 for Enforcement
• £112.50 for the 7.5% over £1,000.

Total: £422.50.

f the bailiffs do not get you to pay the full amount or make an arrangement to pay another way, further action will be taken by the council. 

They will apply for a hearing at the Magistrates’ Court where you will be asked why you have not followed the liability order requesting you have not managed to pay the full amount or agree to a repayment arrangement. 

You will first receive a court summons explaining the process and providing you with the court hearing date. The court summons will arrive in a letter. You should attend court if you have not paid in full by this stage. 

At the court hearing, the judge will ask why the liability order has not been kept to. If you want to avoid going to prison for not clearing your local authority debts, you will need to show that you have not wilfully neglected or refused your debts.  

You can benefit from legal representation at the court hearing. 

If the judge believes you have willfully neglected or refused to pay, they can sentence you to up to 90 days in prison.  

If you ignore the court summons, this is when an arrest warrant could be issued. 

Can I Write Off My Council Tax Debts?

You might be able to write off some of your council tax debts with 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.

Do you pay your council tax if you are in prison?

If you’re leaving a home empty while you’re in prison, you can usually apply to not pay your council tax during your sentence.

However, if you are serving a prison sentence because of avoiding local authority tax, you will still be subject to council tax payments while in prison.

You can read the full details on the GOV website here. 

References

1. Big Issue – Council tax debt is spiralling across England as households struggle with cost of living crisis