Jasmine Birtles
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How to Handle Council Tax Arrears
Jennifer
13th Apr 2023
Shocking new statistics revealed thousands of people are struggling with Council Tax arrears, and how aggressive and forceful some councils are in trying to claw back the money owed. Within just a couple of weeks of a missed payment you may receive a court summon and find bailiffs at your door.
From the beginning of this month, the government increased the amount that councils in England are allowed to put up council tax without having to hold a local referendum. Those with social care duties are also now able to raise council tax by 5%, while others can put it up by 3%.
Even before the pandemic and the cost of living crisis hit, households across England and Wales were facing a Council Tax crisis. But in a more pronounced state of economic uncertainty, there are even more households suffering financial stress.
- Debt Buffer’s Key Findings
- What are Council Tax Arrears?
- If Miss a Council Tax Payment
- Council Tax Reductions
- Useful Resources
Debt Buffer’s Key Findings
New data obtained by Debt Buffer using Freedom of Information requests has revealed the shocking state of household debt even before the coronavirus crisis hit. Although there was a pause in taking action at the peak of the pandemic, the majority of councils have resumed aggressive action to recover overdue debts from already financially-stressed residents.
The research reveals:
- Up to 31% of households in England and Wales have been issued a court summons for unpaid Council Tax. So far, reaching a total of 2.23 million Council Tax court summons issued across England and Wales.
- Over 1 million Liability Orders have been issued, allowing councils the right to appoint bailiffs, with over £164 million already having been collected.
- While nearly all councils suspended action during the peak of the COVID-19 crisis, 113 councils have already recommenced enforcement action to retrieve Council Tax debts.
Debt Buffer mapped out the Council Tax crisis across England and Wales here. The data shows how large the scale of the Council Tax crisis was even before the pandemic. However, with the added economic impact of lockdown many more households will have fallen behind financially and be facing Council tax arrears.
What are Council Tax Arrears?
If you’ve missed even just one Council Tax payment, you’re in arrears and owe money to your council. Arrears are a priority debt and quickly escalate if the debt isn’t paid immediately.
Unlike being in arrears (debt) with other bills, like credit cards, there are big implications for being behind with your Council Tax payments.
In almost all cases, if you ignore Council Tax arrears your council will issue a court summons quickly to get all the money back at once. You’ll also end up having to pay court costs and bailiff fees on top of what you already owe, adding hundreds to your bill.
If You Miss a Council Tax Payment
Consequences of Council Tax arrears are harsh and progress very quickly compared to other forms of debt. If you currently pay your Council Tax in monthly instalments and fall into arrears, you lose the right to pay in instalments. Your entire bill also then becomes immediately due.
If you miss a payment, you’ll get a reminder from the council within 2 weeks of the date it was due. You have 7 days to pay, with no further consequences and your debt will be cleared. However, if you don’t pay within 7 days, or it’s the third time that year you’ve made a late payment, then the council sends a final notice.
This states that you need to pay the remainder of the year’s Council Tax within 7 days. If you fail to do this, your council will apply to the courts for permission to collect debt from you. Also known as a liability order.
With a liability order, a bailiff can be sent to your home or money can be taken from your pay or benefit payments you may receive, including:
- Income Support
- Employment and Support Allowance
- Job Seekers Allowance
- Pension Credit
- Universal Credit
What Should You Do?
If you’re struggling to pay, contact your council as soon as possible to try and recover the situation before it worsens. You may be eligible for a Council Tax reduction, or be able to spread out payments over 12 months instead. At their discretion, some councils are also able to offer a one-off discount if you still can’t pay what you owe. It’s always worth getting in touch to see what help and options may be available to you.
Council Tax Reductions
Anyone over 18 and owning or renting a home has to pay Council Tax, except houses with only student tenants. (If you’re not a student and live with students, you still have to pay Council Tax). However, a full Council Tax bill is based on two or more adults living in a home, so if you don’t match the full requirements, you could be eligible for a reduction.
Every single person living alone is eligible for a 25% off your Council Tax bill. Children don’t count – so single parents with children under 18 are also eligible. Find out who, for Council Tax purposes, does not count as an adult here.
You can also be eligible for a reduction, potentially up to 100%, if you’re on a low income or claim benefits. However, what you may get varies. It can depend on:
- Where you live
- Individual circumstances (income, number of dependents, residency status)
- Your household income, including a partner’s income and any savings you may have
- Whether other adults or children live with you
It’s also always worth checking whether you’re in the right Council Tax band as this will affect what you pay. However, it’s worth bearing in mind that this can increase, too.
If someone you live with has a severe mental impairment (such as dementia) or other condition, you may be eligible for a further discount. Speak to your local council to find out more.
Useful Resources
- StepChange – You can use their confidential online debt advice tool or call them at 0800 138 1111 to speak to one of their advisors for free and impartial debt advice.
- Find Your Local Council – If you’re struggling to pay your Council Tax, contact your council as soon as possible for help.
- Apply for Council Tax Reduction– You may eligible for a reduction if you’re on a low income or receive benefits.
- Working From Home and Council Tax – There are some cases where if you’re working from home you may need to pay business rates.
- Contact Valuation Office Agency– Find out whether working from home affects what you need to pay.
More Debt Advice
Getting out of Council Tax arrears is just one step to managing your debts. Read these articles next to find more ways to overcome your debt and make sure money worries don’t get you down.
- Eviction Rights for Tenants and Landlords
- Mental Health and Money: How to Stop Debt Overwhelming You
- Strangest Grants Available: Could You Be Eligible for Free Cash?
- Where to Find Free Debt Advice
Great advice for anyone in arrears.