Dealing with council tax arrears

When you fall behind with your council tax you’re at risk of the local authority making you pay the full amount for the year in one payment. To avoid this, you should act quickly to get on top of payments and pay back any arrears.

Get a council tax payment plan

1. Look at your monthly budget so you can see if there are any ways you can make savings to help you pay your council tax arrears – we will do this as part of your debt advice session, or you can use our guide to making a budget.
2. Contact the council and ask them to agree to a payment arrangement, based on what you can afford – stick to this payment plan.
3. Check if you’re entitled to council tax reduction (if you’re on a low income or benefits) or a reduced bill if you live alone. How council tax is calculated.

Councils have the power to write off council tax bills and arrears through Section 13A (1)(c) of the Local Government Finance Act 1992.

This "discretionary relief" through Section 13A is meant to be used if your home is uninhabitable due to fire or flood damage, but it can also be used if you’re in severe hardship, or if you're suffering from severe physical or mental health conditions.

Being in severe hardship means you don’t have any money left over to pay your council tax after paying your usual household bills. Each local authority has their own policy for using Section 13A.

Councils can reduce the balance of council tax arrears, including writing them off entirely, and allow people to have reductions and discounts on their council tax bills.

To apply for your council tax to be written off through Section 13A, you should:

• Write to the council in order to apply for discretionary relief, quoting s13A Local Government Finance Act 1992
• Provide evidence that you can't afford to pay, we can help you do that. Work out your budget with our free online debt advice tool

Councils must consider all applications for discretionary relief, and can't dismiss them out of hand.

If the council refuses to consider your application, you should make a complaint. This can be escalated to the Valuation Tribunal.

There are also some debt solutions that write off council tax. Council tax arrears will be written off by bankruptcy or a debt relief order (DRO).

If you go ahead with an individual voluntary arrangement (IVA), it may be possible for you to include your council tax arrears in your IVA proposal, and therefore have them written off in due course.

Your IVA application must be approved by your creditors, and it’s not guaranteed your local council would agree to these debts being written off. Please note: DROs and IVAs are only available in England and Wales.

You’ll be sent a reminder letter 14 days after missing a payment.

If you make the payment within seven days of the reminder letter

• You can continue paying your council tax in instalments.

If you don’t make the payment within seven days of the reminder letter

• Your local authority can ask you to pay the whole council tax for the rest of the year. You have another seven days to pay the whole amount. You will be sent a final notice to pay.

If you don’t pay within seven days of the final notice

• You are at risk of being taken to court. The council can issue a court summons for the full balance owed.
  
  You’ll have to pay additional court costs and if you want to avoid being taken to court, you’ll need to pay this amount in full before the court deadline.

The court process differs depending whether you live in England, Wales or Scotland.

Read about what happens if you don’t pay your council tax

Local councils can ask for a liability order to be issued so that court-appointed debt collectors can be instructed and further legal action can be taken to recover the money you owe.

Liability orders can be issued across the UK, with different rules due to the different legal systems.

Find out more about liability orders.