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Worried about council tax arrears?

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i The advice on this page applies to residents in England, Wales and Scotland only.

Council tax arrears. What to do if you can’t pay council tax debt.

Your council tax bill is a 'priority debt', as there can be serious consequences if you can’t pay your arrears.

If you need help with paying your council tax or you're struggling to deal with the arrears, we'd recommend getting free, expert debt advice as soon as possible.

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A number of measures are being rolled out to help people who are struggling financially because of coronavirus. These include temporary payment holidays for certain types of credit and mortgages, changes to overdraft charges, help for people struggling to pay their rent and the extension of the moratorium period for debts in Scotland.

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Council tax makes up around a quarter of local authority incomes in England, Wales and Scotland. 

Most households have to pay council tax, but the amount you'll pay depends on:

  • the value of your house,
  • your age,
  • your income, and
  • who else lives with you

In Northern Ireland households pay rates rather than council tax. If you’re in Northern Ireland, read our guide to dealing with rates arrears.

What happens when I can't pay my council tax?

If you fall behind with your council tax it's important to:

  • Contact the council and try to make an arrangement to clear your arrears
  • Send them a copy of your budget showing your income and outgoings, so they can understand your situation

If you don’t pay what you owe, or make payment arrangements with the local authority, they can apply to the court for a liability order if you live in England or Wales. This means further action can be taken to recover the debt.

What happens when I miss a council tax payment?

Local authorities have extra legal powers to collect council tax and they often act quickly if payments are missed.

This could result in bailiffs (or sheriff officers in Scotland) visiting your property. This means council tax arrears are treated as a priority debt.

  1. If you’re more than 14 days late paying a council tax instalment you’ll be sent a reminder letter.
  2. If you make the payment within seven days of the reminder letter you can continue paying your council tax in instalments.
  3. If you don’t make the payment within seven days, your local authority can ask you to pay the whole council tax for the rest of the year.
  4. You have another seven days to pay the whole amount, otherwise the local authority can take you to court. The court process differs depending whether you live in England, Wales or Scotland.

Can council tax arrears be written off?

Councils have the power to write off arrears. However, many will only do so where there is severe hardship. Each council has their own policy.

You should always treat council tax bills and arrears as priorities, as there can be serious consequences for missing payments. Find out more about which debts to pay first.

Council tax arrears will also be written off in 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.

However, your IVA application has to be approved by your creditors, and it’s not guaranteed your local council would agree to these debts being written off.

Can bailiffs force entry for council tax?

A bailiff can only force entry to your home if they have previously entered and you’ve signed a controlled goods agreement, which allows them to enter your home and take goods if you don’t make the agreed payments. Find out more about bailiff rights and powers.

Can I go to jail for not paying council tax?

In England, if you don’t pay what you’ve been ordered to pay by the court you could be imprisoned for up to three months. In practice this is a last resort and very rare.



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How is council tax paid?

An annual bill will be sent in March each year showing how much you need to pay.

You can spread the cost over 12 months by paying in weekly or monthly instalments. Council tax bills often show payments over 10 months but your local authority must let you pay over 12 months if you ask.

If your council tax bill was sent out later than April, for example because you’ve moved house, you’ll have a shorter time to pay it. The bill must be paid off in full before the end of the following March.

 

What are council tax bands?

Council tax is charged in bands based on the value of your house in 1991. More expensive houses are in a higher band and pay a higher annual council tax bill. Band A is the cheapest and band H or I is the most expensive. Your band will be shown on your council tax bill.

If you think your house was put in the wrong band, you can ask for it to be reassessed. You can save money if your house is changed to a lower council tax band, but this isn’t guaranteed, and if you’re unlucky the band could even go up.

Do I have to pay council tax if I’m on benefits?

If you’re on a low income, or your income is based on benefits, you may qualify for council tax reduction. Your council tax bill will be reduced, based on how much you earn.

All local authorities have different rules for who qualifies.

Council tax reductions

There are some ways to reduce your council tax bill, you may qualify for council tax relief:

  • You’re entitled to a 25% single person discount if you live on your own. Some people aren't counted when working out council tax, so if you live with a full-time student, apprentice or someone who is 'severely mentally impaired' you may still qualify for a 25% discount
  • If you’re above pension age, you’ll get extra council tax reduction
  • If someone in your house is disabled and the property has been adapted, you may qualify to have your council tax reduced by one band

If your circumstances change during the year, make sure you tell your local authority so they can send you an updated bill

Council tax court action in England and Wales

If your local authority starts court action, you’ll get a summons in the post. This will give you a date and time for a court hearing. An extra charge will be added to your bill at this point.

  • If you get a letter about council tax court action, call us for advice
  • At the hearing, a magistrate will issue a liability order

What is a liability order?

This order gives the local authority permission to take further action to collect the unpaid council tax. You can attend the hearing and tell the magistrate if a mistake has been made, or if your council tax has been paid in full before the hearing date. You should keep in touch with the local authority before the hearing and ask them to agree to you paying the arrears in instalments.

Once a liability order has been issued, your local authority has several options to collect the unpaid council tax.

The most common ways to collect unpaid council tax are by:

  • Using bailiffs or 'enforcement agents'
  • Taking payments straight from your wages using an attachment of earnings. This will be a fixed percentage of your take-home pay
  • Taking payments from your benefits. A maximum of £3.70 a week can be taken from income support, income based jobseekers allowance, income related employment and support allowance or pension credit. A maximum of 5% of your standard allowance can be deducted from universal credit

They also have the following options, but these are rare and are only used as a last resort if there are no other ways to collect the debt:

  • Securing the debt to your home using a charging order if you owe more than £1,000
  • Make you bankrupt if you owe more than £5,000 in England and Wales or if you owe them more than £750 in Northern Ireland
  • Send you to prison for up to three months (only if you live in England). This is extremely rare, and only used where someone deliberately refuses to pay their council tax. The local authority can’t send you to prison if any of the other methods above can be used instead

Read our guides to court action in England and Wales

Council tax court action in Scotland

If your local authority starts court action, they’ll apply to the sheriff court for a summary warrant, which is part of the diligence process. A fee of 10% of the outstanding council tax will also be added to your bill.

If you get a letter about council tax court action, call us for advice straight away.

You’ll then be sent a charge for payment letter asking you to pay the amount due within 14 days.

The charge for payment comes with a form you can fill in to ask for a time to pay order. You must complete this form straight away and send it the sheriff’s office with an offer of payment. It’s important your offer of payment is realistic, so call us or complete our online debt advice tool to work out how much you can afford.

If the local authority accepts your offer of payment, no more action will be taken, if you make the payments you’ve agreed to.

If you don’t apply for a time to pay order, or if you don’t make the payments you’ve agreed, your local authority has several options to collect the unpaid council tax.

The most common ways are:

  • Take payments straight from your wages using an earnings arrestment
  • Take money straight from your bank account using a bank arrestment

They also have the following options, but these are only used as a last resort if there are no other ways to collect the arrears:

  • Sheriff officers can take goods from outside or inside your home
  • They could make you bankrupt, through sequestration or MAP bankruptcy, if you meet the criteria

Read our guides to court action in Scotland

Can I complain if I think my council tax bill is wrong?

If you have any problems with council tax, contact your local authority first. You can make a complaint if you think you've been treated unfairly or your bill is wrong.

You must give your local authority 12 weeks to reply to your complaint. If you're not happy with their reply, you can contact one of the following independent organisations.

They can give you more help and investigate your complaint.

Help with council tax debt

If you've missed council tax payments or you're struggling to pay arrears, get free debt help now before your local authority takes any further action.

You can use our confidential debt advice tool online, or call us for free to talk to one of our expert advisors.

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