Council Tax Arrears

Council Tax is a priority payment and if you have arrears, the local authority will usually want them repaid within the financial year, which ends on the 31st March.

If you can’t pay the arrears by the end of the financial year, you’ll need to think of a council tax arrears payment plan. To get your finances in order, you will need to work out what you can realistically afford by drawing up a budget sheet:

  • Offer the amount you can afford towards your arrears on top of your normal payments and ask for a special payment arrangement, explaining that the amount you are offering will prevent any further arrears and court costs.
  • If your local authority will not negotiate with you, you can ask your local councillor to intervene on your behalf and continue making your increased payments to the local authority, covering both your arrears and regular payment.
  • When making payments towards your arrears, it is important that you make clear what is to be allocated to your regular payment, and what is to be allocated to your arrears. If you aren’t clear, the payments you make could be put towards your arrears in the first instance, putting you further behind with your regular payments.

If your local authority is incorrectly allocating your payments, you should consider making a complaint and asking your councillor to help. You could also try the Local Government Ombudsman.

What enforcements can the council use to recover the debt?

Liability Order

Once you are in arrears with your Council Tax, the local authority can apply to the magistrates’ court for a liability order: a demand for you to pay the full amount you owe plus any other costs.

The magistrate will issue a summons for you to appear before them on a specified date. You do not have to attend but if the arrears are due to an inability to pay, it’s best to go to the hearing and explain your circumstances.

Although the Liability Order will still be granted, if at a later date you are summoned to a committal hearing, the fact you have already explained your circumstances at the earlier hearing will help persuade the magistrate that you have a genuine case.

The application and costs for the liability order can vary between local authorities and will be added to your bill.

Once a Liability Order has been granted, you have 14 days to make an arrangement with the Council to pay. If you cannot do this, the Council is able to assign the debt to Enforcement Agents (Bailiffs).

Can council tax arrears be written off?

If you do not have any means to pay the arrears, you should contact the local authority as they have the power to write off some or all the arrears where they believe the tax payer is in hardship and has no means by which to pay.

There are no guarantees that local authorities will write-off debts, but in severe circumstances we recommend you contact them and ask.

What is a Section 13A?

Section 13A provides the Council with a discretionary power to discount the amount of council tax that is payable by a resident on a case by case basis. If you are suffering severe financial hardship or have severe problems with the property, contact your local council to ask about Section 13A.

Can I get a Council Tax reduction?

You may qualify for a Council Tax Reduction, further details of which can be found here: www.gov.uk/council-tax-reduction

Methods of recovering Council Tax

Attachment of Earnings

This is a popular method of enforcement. Following the granting of a Liability Order, the local authority can order your employer to deduct an amount from your wage directly to them towards your arrears. For each deduction made, the employer can also deduct an extra £1 from your wages.

The amount of the deduction is based on a pre-arranged formula of your normal take home (net) pay. Be aware that once an Attachment of Earnings is applied, then negotiations regarding the monthly amount will be difficult.

Attachment of Benefits

If you are in receipt of any of the following benefits, the local authority can have the arrears taken directly from your benefit at a standard rate:

  • Employment and Support Allowance
  • Income Support
  • Jobseeker’s Allowance
  • Pension Credit
  • Universal Credit

Enforcement Agents (Bailiffs)

This is the most common form of enforcement. The local authority can send Enforcement Agents to your property with a view to taking control of goods to clear the debt. The Enforcement Agent has to first gain peaceful access into your home before they can seize goods and possessions.

Taking control of goods means that the Enforcement Agent will make a list of the things that you own which can be taken away in the future and sold if you don’t come to a satisfactory arrangement to pay.

You do not have to let the Enforcement Agent into your home unless they have already been in before. They can be difficult to negotiate with and will demand high levels of payment if they don’t remove goods.

Other types of enforcement

These include Charging Orders on your home if you owe £1,000 or more, or Bankruptcy proceedings if the debt is more than £5,000.

Prison

If you can afford to make payments to your arrears then you must do so, otherwise the local authority can ask for your committal to prison. In order to be sent to prison, the magistrate must be convinced that you have either ‘wilfully refused’ to pay the tax or you have been ‘culpably neglectful’ which means you have had the means to pay but have simply neglected to pay.

You will receive a Summons to appear before the magistrate to explain why you should not be committed to prison. Regular payments, even small ones, are a valid defence against imprisonment and magistrates have the power to write off some or all of the debt. If you do not appear, a warrant for your arrest will be issued.

Please note: from 1st April 2019, residents in Wales will no longer be able to receive a prison sentence due to council tax debt.


If you would like council tax arrears help or advice on your finances, please contact our Advice Team on 0800 917 7819.