If you have fallen behind on your council tax payments, you could find yourself falling into debt with your local council. This is known as Council Tax debt and can differ from other forms of debt and arrears payments in a couple of key ways.
To find out more about managing your debt and receiving free debt advice visit www.moneyhelper.org.uk or read Options for paying off your debt.
All residents living in the UK must pay council tax to their local area each month. This monthly payment can range depending on location and area based on the valuation band your local council has placed on your property.
Dealing with council tax debts can be stressful. Luckily, we may be able to answer some questions you have regarding your council tax and help you find the support you need.
Is council tax a priority debt?
Council tax is considered a priority bill meaning it should be taken seriously if you find yourself either unable to pay or falling behind on your council tax payments. There can be serious repercussions for people who fall behind on their council tax payments and unlike other forms of debt recovery, councils can enact more severe action against those who fail to pay.
This will start with letters but escalate to court hearings, bailiff action and even prison time if you continue to miss payments or refuse to pay.
Can council tax debt be written off?
Though it is more the exception than the rule, there are scenarios where you can potentially write off your council tax debt.
To have your council tax debts written off you’ll need to provide a strong case for why you’re currently unable to repay your council tax with no realistic means of coming up with the outstanding amount. Under the Local Government Finance Act 1992, Section 13A local councils do have the power to either lower or forgive council tax debts under extreme circumstances.
These may include severe financial difficulties, disability or individuals suffering from acute mental or physical health conditions.
You may also be able to write off council tax debts as part of a debt solution such as an IVA, Bankruptcy or through a Debt Relief Order.
An IVA is a formal debt solution that consolidates all of your outstanding debts into one affordable monthly repayment. It is a legally binding debt repayment agreement that lasts over a set period (usually up to 6 years). Once you have reached the end of your repayment period, any outstanding debts are written off.
A Debt Relief Order is a debt solution designed for people with debts up to £30,000 with no viable means of repayment. During a debt relief order you are given a 12-month grace period from your debts after which, you will either need to begin making payments towards your debts or if you are still unable to repay the amount, your debts will officially be written off.
Bankruptcy is a formal insolvency solution available to residents of England, Wales, and Northern Ireland (the equivalent in Scotland is Sequestration), where your outstanding debts are written off.
What happens if I don’t pay my council tax debts?
If you find yourself falling behind on your council tax payments or missing a payment, your council will first send you a reminder notice. This will give you seven days to pay the amount owed.
Failure to repay this amount in the allotted time could see you being made liable to repay the entire years council tax.
Your local council will send you a maximum of two reminders in the financial year. If you continue to miss payments your local council may move to take legal action against you.
Council Tax Liability Order
If legal action is taken against you, this will take the form of a ‘liability order’ from the magistrate court. This will be a legal demand for payment and can include extra costs such as legal fees, lawyers’ fees and any other expenses associated with retrieving your debts. You can plead your case in court for not paying.
If you continue to avoid payment following this, it is possible that a court could serve you jail time of up to three months due to unpaid council tax debts. This is likely a more extreme punishment and would be reserved for people who are actively avoiding payment rather than someone who is unable to.
Can you go to prison for not paying your council tax?
Though the punishment for not repaying your council tax debt can vary, it is possible that a court could serve you jail time of up to three months due to unpaid council tax debts. This is likely a more extreme punishment and would be reserved for people who are actively avoiding paying rather than someone who is unable to.
Can I get a reduction on my council tax debts?
If you are struggling to make your monthly council tax payments, there are a number of options that may be available to you for help.
Your local council may allow you to spread your payments over 12 months instead of the standard 10 to make monthly payments more manageable.
If your situation qualifies, you may be given a one-off discount to help you get back on track if you have fallen on hard times.
There are also rent reduction schemes for vulnerable households in need. These include:
- A reduced council tax bill if you live alone
- Council tax reduction for low-income households/households on benefits
Can I get help for my council tax debts?
If you are struggling with your council tax payments and feel like you are struggling to find the best option for how to proceed, you may benefit from speaking to your local Citizen Advice Bureau or an independent debt advisor, who can help you discuss your debts and give you expert advice on how to manage your finances and any financial options that may be right for you to repay your debts.
For further reading visit Money Helper.
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