Is Non-Payment of Council Tax a Civil or Criminal Offence?

Are you worried about not paying your council tax? You’re in the right place for answers. Every month, over 170,000 people come to our website seeking advice on their debt problems.

This article will explain:

• What council tax is and who has to pay it.
• What happens if you don’t pay your council tax.
• How to appeal if you think your council tax bill is wrong.
• How not paying your council tax might affect your credit score.
• If not paying your council tax is a civil or criminal offence.

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 that worrying about money can be very hard, but we’re here to guide you and provide simple and clear answers. Remember, there are always things you can do to improve your situation.

Let’s get started.

Is Non-Payment of Council Tax Considered a Criminal or Civil Offence?

In general, a debt, and this includes council tax debt, cannot form the basis of a criminal prosecution in the UK. Debt is considered to be a purely civil matter. Unless, of course, there have been criminal activities leading up to the debt, such as fraud. 

But it is very unlikely that anyone would be prosecuted in a criminal court for non-payment of council tax, even if they purposefully gave the council fraudulent information about the people that live in the property.

What Happens if You Are Taken to Court for Not Paying Council Tax?

If you are taken to court for non-payment of council tax debts, the worst thing that could happen, would be being declared bankrupt. The council might seek to have you declared bankrupt though. As once you are, then as a creditor, the council can apply to collect the debt directly out of your wages. 

How do I Appeal My Council Tax Bill?

If you think that your council tax bill is wrong, you need to write to your council and tell them why you think that your bill is incorrect. You can find out who your local council is here.

Your council will then reply to you within 2 months.

This reply will either:

• Tell you you are correct, your bill is wrong, and a new bill will be sent.
• Tell you that the bill is right and explain why.

If the council replies and says that your bill is wrong, you must carry on paying the amount on your old bill until a new one comes.

If you wish to appeal your council’s decision, or you don’t get a reply within 2 months, you can appeal to the Valuation Tribunal. This is a free services but you need to pay for your own costs.

For your appeal to be valid, you need to:

• 2 months of the council telling you their decision
• 4 months after you first wrote to the council about your council tax bill.

If the Valuation Tribunal agrees with you and says that the council was wrong, your new bill will be sent along with your monthly adjustments.

Is Anyone Exempt From Paying Council Tax?

Now we need to look at reductions and exemptions. Currently, only students who are enrolled at a university are exempt from paying council tax completely. However, some people may be able to pay a reduced amount of council tax, in the following scenarios:

• If there is a registered disabled person living in the property, then the council tax band for that property will be dropped one level.
• If there is only one person living in the entire property, then a 25% discount on council tax is available.
• Low-income families on benefits might be able to get council tax benefits, to help them meet the cost of council tax.

What Happens if You Don’t Pay Your Council Tax?

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).

» TAKE ACTION NOW: Fill out the short debt form

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.

Before delving into some specifics, here’s a list of the most common debt solutions out there.

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.

References

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