Council Tax Debt

What happens if you can't pay your Council Tax?

What happens if you can't pay your Council Tax? The first thing to do if you cannot pay the annual Council Tax amount is to speak to the local Council Tax office, who will be able to work with you to create an agreement where you are able to pay your Council Tax in instalments. This will usually be a monthly payment.

What happens if you miss your Council Tax payments?

If you miss a payment the council will wait two weeks before sending you a reminder. When you receive the letter, they will give you seven days to make the payment without any consequence.

If you fail to make your payment within seven days or have missed three payments in a row, you will be served with what is known as a final notice by the council. This means the agreement no longer holds and you will have to pay your Council Tax in full within the next seven days.

Following any failure to make a payment after receiving your final notice, the council will go to court and request a liability order.

Should you fail to make the payments even after the liability order, you will risk facing a prison sentence, but only in extreme cases. This only occurs in incidents where there is evidence you are deliberately refusing to pay your Council Tax.

What is a Council Tax liability order?

If you fail to make your Council Tax payments and you avoid any of the letters sent to you by the council, the council may apply for a liability order. A liability order is approved by the magistrates’ court to enable the council to retrieve its outstanding Council Tax.

The liability order will be put to the person to whom the council originally wrote regarding the missed payments. If you are making joint payments towards the Council Tax with a partner or roommate, the council can request for the liability order to be placed on all persons concerned.

When you receive a liability order, you will be able to present your case in front of the magistrates’ court, detailing the reason behind the missed payments. You may also be charged court fees.

In order to do this, they will need to request certain information from you. This may include your employer's details, your earnings, and the amount expected to be deducted from your wages. If you are receiving additional money from benefits and someone else is responsible for paying the Council Tax, they will also request this information from you.

Once they request this information from you, you have 14 days in which to provide it to the council. Failing to do so or providing false documents is a criminal offence. If you do not have the information they are requesting, speak to your local council as soon as possible.

Can Council Tax arrears be written off?

There are some debt solutions which enable you to write off your Council Tax debt. If you apply for bankruptcy or a debt relief order (DRO) you can write off your Council Tax payments. However, these measures should only be taken if you meet the required criteria and you have carefully considered their suitability.

If you have other debts and have submitted an Individual Voluntary Arrangement, you will be able to include the Council Tax in it. Once approved, the Council will be prevented from taking any further action against you.

Can bailiffs force entry for Council Tax debt?

Your local council can send bailiffs (also known as enforcement agents) to your door if they have been unsuccessful in retrieving their debts. Before the bailiffs arrive you should be able to confirm the amount you owe them. It is worth noting that bailiffs are not allowed to force themselves into your property unless you have a controlled goods agreement in place.

Before signing the controlled goods agreement make sure all the details are correct, including the amount you owe and any additional fees required.

If a bailiff is going to visit you at home, they will have to do so between 6 am and 9 pm. If they come to your door outside of this, they will require a court warrant. You can find out more about bailiffs and your rights here.

What additional fees can the council charge for Council Tax debt?

If a bailiff is called, there is a chance you will have to pay bailiff fees in addition to court fees and repaying your Council Tax debt.

You should be provided information about the amount you owe by the bailiffs ahead of their visit and once they have completed their visit.

If you are worried about bailiffs and would like to speak to an expert, apply for a free consultation here.

Can you go to jail for not paying Council Tax?

If you live in England, in short, yes. There is a chance you could do some jail time if you fail to pay your Council Tax, however, this happens rarely. If the council has made numerous attempts to retrieve the money including a liability order and has yet to receive the payment, and the bailiffs are unable to recover enough items to make the payment, a Magistrate could sentence you to up to three months in prison.

When considering your case, the Magistrate should take into account your circumstances and ability to pay. You may be able to avoid prison if the court allows you to make payments within a certain allocated time, or if you can demonstrate you were not in a position to make the payment. It is also worth noting that the court has the power to remove the debt.

Does Council Tax affect your credit score?

Fortunately, unlike other forms of debt such as credit card debt, your Council Tax arrears do not appear on your credit file and therefore do not impact your credit score.

Even if the Council apply to Court, as they do not require a County Court judgement, it is unlikely the Court action would be recorded on your credit file. This means if you are applying for a mortgage or loan, it should have no bearing on the outcome of your application, although you should carefully consider taking out any further credit if you are struggling to pay your Council Tax.

Can I ask for a discount on my Council Tax?

If you are unable to afford the Council Tax payments, notify your council as soon as possible.

In order to apply for this reduction, you will need to make sure you have the valuation of your home and the amount of Council Tax you would pay on a property with that valuation. If you have had any changes to your circumstances since you last paid your Council Tax, a valuation officer will be able to confirm if the changes will impact the Council Tax you are eligible to pay.

What if my council won't help me?

If you feel the council has not helped you or failed to follow the correct procedures you can put forward a complaint but please note, this can be a lengthy process.

The first complaint must go to your council, which can take up to 12 weeks before you hear a reply. If you are unhappy with the outcome you can make a second complaint to the ombudsman; this needs to be done within 12 months of you realising the council has not helped you correctly or followed procedure.