Council Tax Debt - Everything You Need to Know, Tips, FAQs, Guide & More

If you happen to miss a council tax payment, you will be in ‘arrears’. This means that you now owe a debt to your local council. 

Council tax debts should be treated as a priority and if this happens to you, you should not wait for your council to contact you. 

You should reach out to them as soon as possible to ensure the matter does not escalate. 

Today, I’ll be discussing how you can easily deal with council tax arrears and what you should be doing if you’re struggling with it.

Table of Contents

What Happens if You Don’t Pay Council Tax? 

The amount of council tax you pay usually depends on a number of factors such as: 

  • The value of your house 
  • Your age
  • Your income 
  • Who else lives with you and how many people you support financially

If you’re having trouble paying your council tax, it’s very important that you contact your local council and make them aware of this.

Your local council has certain extra-legal powers and they can take legal action against you if they think you’re deliberately avoiding the debt.

If you contact them and explain your situation to them, not only will this prevent them from taking legal action, they might even help you develop a payment plan that could be more affordable to you.

For example, you can opt to pay off your council tax over the course of 12 months rather than the usual 10 that is mentioned in the letter that you originally received. 

If you’re struggling with making payments and need help, I highly suggest seeking debt advice from an independent charity. They have trained professionals that will help you for free.

You may be turned onto options by them that you had not been aware of. They will also help you understand how you can apply to these options too, e.g. if you opt for an Individual Voluntary Arrangement, they can help your plan the initial proposal. 

If you opt to make payments towards your council in the course of 12 months, then a trained professional can also give you debt advice on how to schedule your payments. 

What Happens if You Miss Council Tax Payments? 

Your local council has extra-legal powers which is why you should always treat council tax debt as a priority debt. Not only can they send bailiffs to your home but they can even take money from your wages or support allowance in order to make up for the debt. 

Once you are 14 days late in making your payment, you will be sent a reminder letter by your council. If you make your payment within 7 days of receiving the reminder, you can continue with your future payments as normal.

However, if you fail to make the payment within 7 days, this can lead to severe consequences. Your local council could take you to court and the local authorities could ask you to make the payment for the rest of the year all at once. 

Missing a payment can also result in bailiffs visiting your home, seizing your possessions and selling them off in order to pay for your debt. 

Your local council could also take you to court and get a council tax liability order against you if you have unpaid council tax and you keep refusing to make payments. Having a liability order on your debt means that your debt can never become unenforceable. 

I highly suggest that if you feel you’re going to be missing payments, you should contact your council immediately and explain your situation to them.

It’s a good idea to send them a copy of your expenditures and income in order to make them understand. If you ensure them that you’re doing all you can to pay off your debts, it’s unlikely that they will pursue legal action against you. 

What is the Difference Between Tax Credit Debt and Council Tax Debt? 

Tax credit debt occurs when you have been overpaid in tax credits or Universal Credit. This can occur if your income fluctuated and HMRC overpaid you in tax credits. In this case, you would have a debt to HMRC.

Council Tax debt occurs when you have not made payments towards your local council.

Both council tax debt as well as tax credit debt should be treated as priority debts. You can read my post about Tax Credit Debt to find out more about it. 

council tax debt

Can You Go to Jail for Council Tax Arrears? 

You cannot be imprisoned for Council Tax arrears in Scotland, Wales or Northern Ireland.

However, in England, you can be imprisoned for up to 3 months if you keep refusing to pay the money you owe. Keep in mind that this is extremely rare and it will only happen if the court feels that you can afford to make the payments but you’re deliberately refusing to do so. 

Can Bailiffs Force Entry for Council Tax Debt? 

Bailiffs can only enter your home if they have been inside previously and you’ve made a controlled goods agreement with them.

A controlled goods agreement states that bailiffs have the right to seize your goods and sell them off if you fail to make your payments towards your debt. 

Please note that even though bailiffs have some extra-legal powers, they also have to abide by a strict set of rules. Being aware of these rules can help you immensely when dealing with aggressive bailiffs or just any bailiffs in general. 

If you need help with bailiffs, you can read my post about how to deal with them if they’re attempting to contact you for council tax arrears. 

How Long Can You be Chased for Council Tax Debt? 

Just like most other types of debt, the limitation period on council tax in arrears is also six years.

This means that if your council does not contact you in regards to your debt for six years and you have not made any acknowledgement or payments towards it for six years, then it will become unenforceable.

While this is most certainly the case, it’s highly unlikely that your local council will let this happen.

They will most likely always inquire and contact you if you have unpaid council tax. If you refuse to pay council tax then your council will most likely pursue court action and get a liability order. This will stop your council tax arrears from ever becoming unenforceable. 

You can read my post about how long you can be chased for council tax arrears and what options you have if you feel your debt has indeed become unenforceable. 

What is a Council Tax Band? 

Your Council Tax bill is charged to you in “bands”. Bands are determined by what the value of your house was in 1991.

Houses that are more expensive have a higher band whereas cheaper homes have a lower band.

Band A is the cheapest and Bands H or I are the most expensive. The band of your house will be mentioned on your council tax bill.

If you feel that your house has been put in the wrong band, you can contact your local council and inform them of this. This way you could get it changed to a lower band and potentially save money by getting a lower council tax bill.

However, you should keep in mind that this isn’t always guaranteed and there’s a chance that your house could even be moved to a higher band. 

Can My Council Tax be Reduced or Written Off if I’m on Benefits or have a Low Income? 

You can definitely qualify for a council tax payments reduction if you have a low income or are on benefits.

Different local councils have different criteria that determine who qualifies and who doesn’t. 

You are entitled to a 25% single person discount if you’re living on your own. There are some people that don’t count so if you’re living with a full-time student or someone who is severely mentally impaired, you can still qualify for the discount. 

If you’re above pension age (65), you can also qualify for an extra reduction in your council tax bill. 

You can also have the bill reduced by one band if you have someone in your house who is disabled and the property has been adapted. 

What Should I Do if I Think My Council Tax Bill is Wrong? 

If you feel you are being treated unfairly or if there has been some mistake with the calculation of your council tax bill, you should first contact your local council. Make a complaint and tell them why you think you’re being treated unfairly. 

Give them a maximum of 12 weeks to comply with your request. If you are unsatisfied with their reply or if they don’t reply to you at all, then you can opt to seek debt advice from a registered charity such as StepChange.

They will tell you what your options are and help you navigate through whatever option you choose as well.

Most likely, any registered charity you go to will tell you to complain to an authoritative body.

If you’re in England, this authoritative body will be the Local Government Ombudsman.

Conclusion 

Struggling with council tax arrears can be a tough position to be in since they are priority debts that have severe consequences if you don’t pay them.

However, you must keep in mind that as long as you’re cooperative with your local authorities and assure them that you’re doing all you can to pay your taxes, they will provide you with affordable options. 

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