What To Do If I Have Council Tax Arrears?

A council tax payment invoice is considered as a priority debt. Thus, if you have council tax arrears, you’ll be facing grave results. So, do not hesitate to seek debt advice if you are struggling to pay with your tax debt.

Council tax comprises around a fraction of local authority incomes in England, Wales, and Scotland. 

Most of the families have to pay council tax, but the value depends on:

  1. the worth of your home
  2. your age
  3. your revenue and income
  4. the individuals living with you 

In Northern Ireland, families pay rates preferably than council tax. If you live in Northern Ireland, check our guide on how to manage rate arrears.

What Happens If I Can’t Pay My Council Tax?

If you are delayed with your council tax, you must contact the council right away to settle for an agreement on how you can clear your debts. Besides, you can submit details of your budget or pieces of evidence that will show your income and monthly expenses. This way, they will know your financial situation.

It is important that you pay what you since tax debt might lead you to cold bars. If you failed to reach out to the local authority and make some payment arrangements, a liability order will be imposed against you if you reside in England and Wales. When this happens, further court action can be enforced to recover the debt.

Financial Help To Cushion the Impact Of COVID-19 Pandemic

Several measures are considered to assist individuals who are coping with the effects of COVID-19 or Coronavirus Pandemic to their finances. These include payment breaks on mortgage and payment holidays for some unsecured debts and moratorium extension for residents in Scotland.

You may also read our guide: Financial Help Available During Coronavirus Pandemic and Payments for Car Loans and Finance During Coronavirus Outbreak.

What Happens When I Fall Behind My Payments?

Local authorities hold additional legal powers to recover council tax arrears. Most of the time they are quick in putting legal matters in place.

This can lead to bailiffs or sheriff officers coming into your home or property. This makes council tax arrears a priority debt.

  • If you are delayed for more than 14 days, you’ll get a letter as a reminder.
  • If you’re able to secure payments within 7 days after the receipt of the reminder, you can just proceed in paying the appropriate installments.
  • If you haven’t made any payment within 7 days after the receipt of the reminder letter, the local authority will require you to pay the whole you to pay the entire council tax amount for the remaining months of the year.
  • Another 7 days is given for you to pay the entire amount: otherwise, the local authority can take court action against you. The court process will depend on where you reside in England, Wales, or Scotland.

Can Council Tax Arrears be Written Off?

Councils hold the ability to write off arrears. Though, a few will only consider this idea if there is a relentless difficulty in making payment. Every council has its own system or policy

Moreover, you must consider council tax charges and debts as your preferences in terms of payments. If you don’t, there can be severe results for abstaining installments.

Get further information about which debts to pay first through our guide.

Additionally, council tax arrears can be written off when you are declared bankrupt or during a DRO or debt relief order.

If you prefer to consider an IVA or individual voluntary arrangement, it would be possible to include council tax arrears on your IVA proposal and have them written off along the course.

However, your IVA request has to be accepted by your creditors, and it’s not confirmed that your local council will accept that these debts be written off.

Can I Go To Jail If I Don’t Pay My Council Tax?

You could be imprisoned for up to three months if you are in England and you don’t pay what the court asks you to pay. In recent times, this is just the last option, which is rarely put in practice.

How Is Council Tax Paid?

A yearly bill will be sent every March of year that contains the amount you have to pay. You have the option to spread payments for 12 months through monthly installments. Council tax bills usually display payments over 10 months. However, your local authority will let you pay for 12 months.

If you receive your council tax bill later the April, you will have lesser time to pay for it. This can happen if you move to a new home or transfer to a new residence. The bill must be compensated in full before March of the following year.

 Explaining Council Tax Bands

The council tax is imposed in groups or bands based on the value of your home in 1991. This means valuable homes are in a bigger band and usually pay a larger annual council tax bill. Band A is the lowest and band H or I have the highest tax bill. Your band will be displayed on your council tax bill.

If you believe your house was classified under the wrong band, you can request for a reassessment. If your house is transferred to a lower council tax band, you can save more money. However, this is not guaranteed, you could even be lucky f you don’t go up to a higher band.

Do I Still Pay Council Tax If I’m on benefits?

You may qualify for a council tax reduction if you have a low income. Your council tax bill will be decreased, depending on how much you’re earning. Local authorities have set standards for who will be eligible.

Council Tax Reductions

You may qualify to reduced your council tax bill or be eligible for a council tax relief under the following circumstances:

  • You’re qualified for a 25% single person discount if you’re living alone. If you live with an apprentice or someone with severe mental health issues, you can still eligible for a 25% discount. This means that some people living with you are not counted when dealing with council tax.
  • If you’re over pension age, you’ll get an additional council tax discount. If you have adapted people in your household or someone who is disabled, you will be eligible to reduce your council tax bill.
  • If there are changes within the year which concerns or may affect your finance, you need to contact your local authority so they can update your council tax bill.

Council Tax Court Action

 Council Tax Court Action in England and Wales

You will get summons once your local authority begins taking court action against you. You will be informed of the date and time of the court hearing. During this time, there will be additional fees on top of your bill.

The best thing to do is to seek advice from experts if you get a letter about court action. During the hearing, a magistrate will impose a liability order.

What is a liability order?

This order allows the local authority to take additional action to recover the outstanding council tax. You can attend the hearing and inform the magistrate if there are lapses made of if your tax bill has been paid in full amount. You must maintain communication with the local authority before the hearing and try making some payment arrangements.

Once a liability order has been announced, your local authority has various choices to recover the council tax arrears.

Common means to collect unpaid council tax are by:

  • Using an enforcement agents or bailiffs to collect debts
  • Attachment of earnings, where your payment will be taken our directly from your wages. This is a fixed rate out of your monthly wage
  • Taking out payments through your benefits. The maximum amount they can get is £3.70 a week. This will be taken from supporting income like pension credit. Also, a 5% of you universal credit will be deducted.

Rare or last resort option if there’s no other means to recover council tax debt

  • If your debt is over £5,000 in England and Wales or if you owe over  £750 in Northern Ireland, they can make you bankrupt
  • Charging order if you’re a homeowner to secure your debt. This happens when you owe greater than £1,000
  • Lock you in jail for three months if you reside in England, though seldom practiced. This can be used for an individual who boldly refuse to pay.

Fur further details, you can check our guide regarding court actions in England and Wales.

Council tax court action in Scotland

If your local authority begins court action, they’ll refer to the sheriff court for a summary warrant, which is included in the diligence process. There is a 10% of the remaining council tax that is added to your bill. If you receive a message about council tax court action, contact us right away.

You’ll also be a charge for a payment letter that orders you to settle the debt within 14 days.

The cost of payment is included in the form. You have to fill in and send this form to the sheriff’s office. Your letter must include an offer that you can afford to pay for your debt.

If the local authority affirms your offer, there will be no further enforcement that cane is taken against you.

Common ways to enforce action in recovering council tax debt in Scotland:

  • Take payment straight from your bank account using a bank arrestment
  • Attachment of earnings, where your payment will be taken our directly from your wages

Rare or last resort option if there’s no other means to recover council tax debt

  • Sheriff officers can take seized goods from outside or inside your home
  • They can lead you to bankruptcy, through sequestration or MAP bankruptcy, when determined to met the qualifications

What To Do If My Council Tax Is Incorrect?

You can appeal if you think that your council tax is incorrect or if you feel that you’ve been unfairly treated. If you feel this way, reach out to your local authority right away.

Also, give your local authority 12 weeks to answer your appeal. If dissatisfied with the response you can reach one of the below independent parties:

Help with council tax debt

If you’ve fallen behind payments on your council tax or coping to pay various arrears, get free debt help now before your local authority takes any further action against you.