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Are you dealing with council tax debt? Don’t worry; you’re in the right place. Our guide will help you understand the new 2023 laws and your rights.
If you’ve missed a council tax payment or if bailiffs have contacted you, we’ll cover:
- What council tax debt is and what to do if you have it.
- The rules for paying council tax and what happens if you miss or delay a payment.
- How to deal with your debt and if it’s possible to write off some of it.
- What happens if your council won’t assist you or if your items might be taken for not paying.
- What you can do to manage an Attachment of Earnings Order.
Each month, over 170,000 people visit our website for guidance on dealing with debt; you’re not alone.
We understand how tough it can be – some of our team have even been through it themselves. We know the worry of not being able to pay council tax and the fear of what might happen if you don’t. But remember, there are ways to manage and overcome your council tax debt.
What is council tax debt?
A council tax debt accumulates when you have missed council tax payments. A council tax debt can also be known as council tax arrears.
A council tax debt is a priority debt because local authorities hold a lot of power to recover the money. You should prioritise paying your council tax bill before non-priority debts, such as unsecured loans and credit cards.
You will enter into council tax arrears when you miss a payment, or you could get into this type of debt by claiming a council tax reduction that you weren’t eligible to receive.
If you have been wrongfully claiming a council tax reduction, the local authority could backdate the council tax, putting you in arrears.
Who pays Council Tax?
At a basic level, council tax is payable on all domestic properties across England and Wales. Who actually pays depends on who actually lives there.
Given that there are many different scenarios with living accommodation, there is variation in who pays the council tax. Of course, if you live alone, then you’ll pay. But what if you live with other people?
If this is the case then a hierarchy needs to be established. If this is the case, then the payer of the council tax will look a bit like this.
- A resident owner/occupier who either owns a leasehold or freehold on all or part of the property.
- A resident tenant
- A resident who’s a licensee. (Not a tenant)
- Any resident living on the property. (e.g. Squatter)
- The owner. (No resident/s)
Some people and properties are exempt from council tax, or they are entitled to a discount, but the majority of people will have to pay the yearly fee.
What happens when I miss a council tax payment?
When you miss a council tax payment, whether it was because of affordability or forgetfulness, the local authority will send you a reminder letter within two weeks of the missed payment. This letter gives you seven days to make the missed payment. If you fail to pay within seven days, you will be sent a final notice.
A final notice requests that you pay all of your council tax bill for the remainder of the year – not just the arrears. You have seven days to make this payment.
The only time you won’t receive a reminder letter is if you have already missed two payments this year. In this case, you’ll instead be sent a final notice straight away. If you’ve received either of these letters from the council, you might want to get help by seeking council tax debt advice.
» TAKE ACTION NOW: Fill out the short debt form
What happens if I pay my council tax late?
If you pay your council tax late but you complete the payment before receiving the reminder or within seven days of the reminder, no further action will be taken. You’ll have caught up and will continue to pay your council tax in the instalments frequency you committed to.
You may want to change the frequency you pay your council tax to avoid getting into arrears again in the future.
How can I get out of my council tax debt?
If you cannot afford to pay your council tax arrears, you should communicate this with the local authority. They might be willing to offer you a payment plan to make catching up on your debt affordable for you.
Unfortunately, there are no guarantees that the council can help.
There is a new scheme in place called Breathing Space, and this gives debtors 60 days to seek debt advice and arrange a suitable debt solution. This may be something to explore if you can’t pay the outstanding balance and need time to come up with a plan.
How a debt solution could help
Some debt solutions can:
- Stop nasty calls from creditors
- Freeze interest and charges
- Reduce your monthly payments
A few debt solutions can even result in writing off some of your debt.
Here’s an example:
Situation
| Monthly income | £2,504 |
| Monthly expenses | £2,345 |
| Total debt | £32,049 |
Monthly debt repayments
| Before | £587 |
| After | £158 |
£429 reduction in monthly payments
If you want to learn what debt solutions are available to you, click the button below to get started.
What if my council won’t help me?
If the council won’t help you clear your arrears with smaller repayments, you might want to seek personalised council tax debt help.
Furthermore, you could check to see if you’re eligible to receive a council tax reduction. There is a chance that you qualify for a reduction and have been paying too much council tax previously.
What happens to unpaid council tax debt?
If your council tax bill remains unpaid after the final notice, the local authority can take immediate action against you by going to the courts to ask to recover the debt using other methods.
Can you get a CCJ for council tax debt?
No, you cannot get a County Court Judgment issued against you, but you can be subject to a council tax liability order. There is no such case of a council tax CCJ.
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What is a council tax liability order?
A council tax liability order is a legal document issued by a court which gives the council permission to recover the debt from you with further action.
When the council applies for the liability order, you won’t have to attend a hearing if you agree you owe the money. The order will simply be issued. But if you disagree that you owe the money, you can be summoned to challenge the council tax debt.
Once a liability order is issued, the council can use different methods to recover the debt, namely:
- They can employ bailiffs (enforcement agents) to recover the money. In this case, they are sometimes known as council tax bailiffs.
- They can deduct money from your earnings, including employment income and some benefit payments. This is called an Attachment of Earnings Order.
- They can place a charge on your property
- They could even make you bankrupt
However, the most common ways for a local authority to recover the council tax arrears are by using bailiffs or by deducting money from income.
Will my items be repossessed for not paying council tax?
If the local authority decides to employ bailiffs to recover the money and you refuse to (or cannot) pay, the bailiffs could decide to repossess any valuable items or assets you own.
These items will be stored, giving you a chance to repay the debt and receive them back. But if you don’t pay, the bailiffs will sell your possessions and use the sale proceeds to clear your debt.
Can bailiffs force entry for council tax debt?
In the majority of situations, a bailiff cannot force entry to make you pay your council tax or repossess goods. They can however enter your home if you leave doors unlocked or open.
You can stop bailiffs from getting in your home by keeping doors locked and communicating with them from an upstairs window instead.
There is only one scenario where a bailiff could force entry, which means employing a locksmith to access the property rather than “kicking down a door”.
To be allowed to force entry in this way, you must have agreed to a Controlled Goods Agreement (CGA) with the bailiffs and missed a payment. However, even when this happens the bailiffs must give two clear days’ notice that they’re coming to collect the goods.
But what is a CGA? It’s similar to a payment plan with bailiffs where certain assets are used as security in the agreement. These assets are taken if you miss a payment, which is why the bailiff can force entry when the CGA is broken.
What fees can the council tax bailiffs charge you?
The council tax bailiffs can charge fees for their service, but these fees are payable by you – not the council. The fees they can charge you can be very expensive:
- They charge £75 for initial checks and communication with you
- They charge £235 for visiting your home and taking possessions
- They charge £110 for arranging the sale of goods
- Additional fees for storing goods or for locksmith services when required
- Debts over £1,500 can incur additional fees
Bailiff fees are fixed and determined in the Taking Control of Goods Fees Regulations (2014).
Can I pay the council instead of the bailiffs?
You can ask to pay your local council if they take control of the case back from the bailiffs. But this might not be accepted.
Attachment of Earnings Order for council tax debts
Instead of using bailiffs, the council might decide to deduct income from your employment income or some state benefits. They do this by requesting an Attachment of Earnings Order from the court.
The council can deduct a percentage of your net income, which is your income after tax and National Insurance contributions have already been deducted. The table below shows what percentage will be taken based on your net income.
| Net Income | Deduction % England | Net Income | Deduction % Wales |
| £0 – £300 | 0 | £0 – £430 | 0 |
| £300.01 – £550 | 3 | £430.01 – £780 | 3 |
| £550.01 – £740 | 5 | £780.01 – £1,050 | 5 |
| £740.01 – £900 | 7 | £1,050.01 – £1,280 | 7 |
| £900.01 – £1,420 | 12 | £1,280.01 – £2,010 | 12 |
| £1,420.01 – £2,020 | 17 | £2,010.01 – £2,860 | 17 |
| £2,020.01 + | 17 for £2,020 + 50 thereafter | £2,860.01 + | 17 for £2,860 + 50 thereafter |
Source: https://www.nationaldebtline.org/fact-sheet-library/council-tax-arrears-ew/
What can I do about an Attachment of Earnings Order?
Unfortunately, once the Attachment of Earnings Order has been made, there is very little you can do about it.
Can you go to prison for council tax debt?
Although rare, it’s possible to receive a prison sentence for not repaying your council tax debt. You can no longer be sent to prison for unpaid council tax debt in Wales.
However, this option is only reserved for extreme cases where the individual simply refuses to pay and deliberately doesn’t pay their council tax.
How long can a council tax debt last?
A council tax debt can be chased for six years in England and Wales and for 20 years in Scotland.
Different types of debts become unable to be collected after different periods of time. We have discussed this in detail on our Statute Barred debt page, which you can find by reverting back to our main debt info page.
However, the timeframe to enforce a council tax debt is unlimited once a court order has told the debtor to pay.
Because councils act quickly to secure a liability order, it’s almost certain that the council tax debt will never become too old to be collected.
Can council tax arrears be written off?
It’s possible that your council tax arrears can be written off or reduced by a court if you have exceptional circumstances that are causing severe financial hardship. This is known as discretionary reduction.
Can I avoid paying council tax?
The only way to avoid paying council tax is to successfully claim a council tax exemption. In any other scenario, you will have to pay a discounted or full council tax rate.
How long can someone stay without paying council tax?
If you claim a council tax reduction for living alone, you might be wondering how long someone can live with you before you lose your council tax reduction and have to pay the full rate.
If the person habitually lives at another address then you won’t lose your council tax reduction if they stay with you for a short period. You should make sure this is the case because wrongfully and knowingly claiming a council tax reduction when not eligible can result in a hefty fine.
I live in Scotland, what can I do about my council tax debt?
The process of recovering Scottish council tax debt is much the same as in England and Wales, with different names for processes and a few differences. If you have a council tax debt in Scotland, we recommend reading more on our Scotland Council Tax guide.
Council tax forums – are they worth it?
There are several council tax forums where people who have previously dealt with arrears or are currently going through the process discuss their experiences. Forums can provide valuable information and insights, but be aware that not everything you read is always 100% accurate.
