What to Do if You Can’t Afford Council Tax – Complete Guide, FAQs, Tips & More

It often seems like the list of bills that needs paying is never-ending.

Monthly expenditure can soon increase, making it seem like everything you earn goes straight back out again. Even if you reduce your outgoings for non-essentials, there are still some bills that most of us have to pay.

One such example is your council tax bill. However, this can often be an expensive one, so what can you do if you can’t afford council tax? We look at all of the details you need to know.

What is council tax?

Council tax was first introduced in 1993. It’s a taxation system that local councils collect to pay for services in the community. Previously, the cost of this tax was based on the rental value of your home. However, nowadays, it’s based on the property’s market value.

There are different ‘bands’ used to determine your council tax, meaning that it varies throughout the UK. You’ll also find that there are many different variations on a property, council and personal level that determine how much you end up paying.

Just about every household in the UK has to pay this tax, although again, there are some exceptions and discounts that may apply.

Why do we have to pay it?

Council tax bills can be a confusing system. They may also seem unfair, especially as you often don’t see where the money goes. However, it’s a tax that is used to benefit the community. The money goes to a wide variety of projects and incentives in your local area.

Most domestic properties will receive a council tax bill, regardless of whether it’s owned or rented. It also applies to things like flats, bungalows, mobile homes and even houseboats. It ensures that everyone living in a community and using its facilities contributes if they’re able.

What is it used for?

There are all kinds of things that your council tax bill goes towards. However, many of these are things we take for granted. So, you’ll often see people complaining about having to pay council tax bills.

If you’re wondering where exactly your council tax money goes, the answer depends on a variety of factors. Local governments use the money for all kinds of projects. Below, we’ve outlined some of the main areas that benefit from this money:

  • Maintaining and repairing roads and street lighting.
  • Waste and recycling collection and disposal.
  • Local transport services, including buses and trams.
  • Maintaining outdoor spaces, including parks.
  • Support for vulnerable people, as well as the elderly and child social care.
  • Education, such as schools, libraries, museums and art and recreation.
  • Street cleaning and maintenance.
  • Legal services such as coroners, registrars, courts, and elections.
  • Investment.

As you can see, many of these are things that we all make use of and benefit from. So, if everyone contributes, we can all enjoy the benefits.

How much is council tax?

Local councils use bands to calculate how much your council tax will be. Essentially, they look at the value of the property you’re living in and then place it in a specific band. Each band has a different rate, and generally speaking the more expensive the property, the higher the band.

One interesting point about the band systems is that the eight bands, A-H, are determined by the price the property would have been worth in April 1991. This is when the current system was introduced. In Wales, the system was re-evaluated in 2003, and they have nine bands.

You can find out how much you pay for your property by vising the mycounciltax.org website and entering your postcode.

There are some properties which are entirely exempt from council tax, entirely or for a short period. This includes condemned properties, those which are repossessed, and those that are occupied only by students.

You’ll also find that if the property is empty because the person who lives there is in care or caring for someone else, council tax is waived. Similarly, self-contained annexes are exempt if the person living in it is a relative or dependent of the main property owners.

How long can someone stay without paying council tax?

You may be wondering how long you can stay at a property without having to pay council tax. Well, if you’re renting or you’ve purchased a property and aren’t eligible for discounts or non-payment, you’ll have to start paying right away.

However, if you’re a frequent guest at another person’s home, you won’t have to start paying council tax. So long as the property isn’t your sole or main residence, the other person’s tax won’t be affected by you staying with them.

It’s worth noting that councils take this kind of thing very seriously. So, although it might seem like a loophole to claim you’re only visiting, even if you live there, it’s likely the council will eventually find out. They tend to look at a variety of data to determine whether or not a property is paying the correct amount.

What happens if you can’t afford council tax?

For many people, their council tax bill is a dreaded part of their finances. It can certainly be expensive, particularly if you’re the sole earner at the property. So what can you do if you can’t afford council tax?

Well, there are a few things you should check out before you start panicking. The worst thing you can do is to ignore the bill entirely and hope it goes away. It definitely won’t, and you could end up in a fair amount of trouble if you don’t pay. We’ll cover this in more detail further down.

Council tax is designed to be fair and affordable, reflective of the area and property you live in. But that doesn’t mean we’re all in the same position to be able to pay it. If you’re having difficulties, it could mean that there are things you can do to reduce or remove the bill for the time being:

Check if you’re entitled to a discount

There are several ways that you can get a discount on your council tax bill. This can make things more manageable and help you make regular payments. Remember, you can choose whether to pay the full amount upfront or pay in ten monthly instalments.

The first and most widely claimed discount is for those who are the sole adult in the home. So, if you’re the one person over the age of 18 responsible for paying bills, you may be entitled to at 25% discount on your council tax.

If there isn’t anyone on the property who qualifies as an adult (including you), this discount may be increased to 50%. Similarly, if all of the people living in your property are students, you won’t have to pay any council tax at all.

Check whether you count as an adult

One of the often misleading parts of council tax payments relates to whether you count as an adult or not. Usually, we automatically assume that this means anyone who is over the age of 18. However, there are a few additional factors that discount you as an adult who needs to pay council tax:

  • Some apprenticeship schemes mean you’re exempt from paying council tax.
  • If you’re 18 or 19 and in full-time education.
  • If you’re a full-time university or college student.
  • If you’re under 25 and receive funding from the Young People’s Learning Agency or Skills Funding Agency.
  • Student nurses, diplomats, and foreign language assistants are exempt from council tax.
  • Those with a severe mental impairment.
  • If you’re a full-time care provider for someone who isn’t your spouse, partner or child.

So, as you can see, there are many instances where you may be exempt from paying council tax or eligible for a reduced rate. If you think you fit into one of these categories, you should reach out to your local authority for clarification.

Contact your council

If you find you’re in council tax arrears and you aren’t eligible for a reduction or waiving of the fees, your best bet is to contact your local council. You should be able to discuss your situation with them and let them know your personal situation.

If possible, they will help you come up with a revised payment plan. Usually, you’ll still need to pay the amount due by the end of the tax year. However, in some instances, they may let you pay over a longer period. If they suggest this method, make sure to only agree to payments you can afford to make.

It’s worth noting that councils usually default to a payment plan that’s taken over 10 months. So, if this monthly payment is too high, you might be able to switch to 12 months.

Other reductions

There are several mitigating instances worth exploring in more detail when it comes to council tax. The first thing is the disabled band reduction scheme. If you live with a person who is disabled and needs an extra room and extra space for a wheelchair, you may see your property reduced by a band.

Another one worth mentioning is a second adult rebate. This method will reduce your overall council tax bill. It applies if you live with someone over 18 who isn’t your partner who isn’t paying rent. If they’re not paying council tax and are on a low income, you could be eligible.

council tax debt

How about second homes?

One question that’s frequently asked about council tax is how it applies if you have a second home. Well, things have changed lately in that respect, but you may still be eligible for a discount on the other property.

Some local councils give people with holiday homes or furnished second homes a discount. This can be anywhere between 10% and 50%, so it’s definitely worth contacting your local council about. Unfurnished homes used to exempt for six months, but now it’s up to local authorities to determine if you get a discount.

If your home is undergoing major renovations, you may get a break for a limited period of time. If a home is empty, it may also be exempt. The reasons for this emptiness include:

  • The owner has died or has moved to a care home or hospital.
  • The house has been repossessed or condemned.
  • The owner is in prison, provided it’s not for avoiding council tax.

What happens if I don’t pay council tax?

The repercussions for not paying your council tax arrears are fairly severe. If you fail to come to an agreement with your council over the payment, they can take you to court. Here’s how the process works:

  • If you’re more than 14 days late with payment, you’ll get a reminder letter. This gives you seven days in which to pay the amount you owe. If you do, you’ll go back to regular repayments.
  • If you don’t make a payment within seven days of the reminder, your council may ask you to pay the full amount for the year. This acts as a final notice for payment and means you only have seven days to come up with payment.
  • If you don’t pay the full amount, you will likely get a court summons or CCJ. This gives you a date to appear in court and means you’ll get extra fees added to your debt.
  • The magistrate will give you a liability order. This means that the council now has the power to collect the money they owe. They can send bailiffs to your house, take payment directly from your wages, or remove it from your benefits.
  • If they can’t recover the money, they may secure the debt against your home, declare you bankrupt, or even send you to prison for up to three months.

As you can see, the consequences of not paying escalate quickly. So, if you find that you can’t afford your council tax, your best option is to contact your council directly.

Where can I get help?

There are several agencies that will offer help and advice if you’re struggling to pay your council tax bill. This includes:

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