Council Tax debt

Council tax debt is one of the most common types of debt across the UK.

The amount you are required to pay is based on the ‘band’ of your property. Ranging from A to H the more expensive your home is, the more council tax you need to pay.

A payment made to the local authority council tax is a priority payment. This means that the council has the power to chase and enforce action should you fall behind on payments.

Councils have additional legal powers, which allows them to call upon the use of bailiffs in England, Wales and Northern Ireland or sheriff officers in Scotland to reclaim what is owed.

Do you pay council tax every month?

Council tax payments are typically made over 10 months, with people offered a payment break in February and March. However, in some instances, people choose to make council tax payments over 12 months meaning they are not entitled to a payment break.
Payments can be made in a number of ways including by direct debit, standing order, over the telephone, by bank transfer or by cheque.

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Who has to pay council tax?

Most people across the UK are required to pay council tax, however, there are some exceptions to this as well as discounts available to people that you should be aware of.

In some instances, properties can be exempt from council tax if:

  • All residents are full-time students
  • A charity owns the property
  • All residents are under 18
  • The property is empty following a death
  • It’s a self-contained flat where a dependent lives
  • Any residents live with serve mental impairment
  • The property is empty as the occupier is being cared for elsewhere

If the above exceptions don’t apply to you then you could potentially benefit from a discount if you live with someone who as exempt from paying council tax, live alone, are in financial hardship or claim benefits.

You can also challenge the band valuation of your property if you feel that your council tax payment is unfair. If you believe your property is in the wrong band you can request to have your home reassessed which could reduce payments. However, you should be aware that this also runs the risk of increasing your council tax payment if it is deemed your home is more valuable.

What if I can’t pay my council tax?

Council tax is considered to be a priority bill which means that it is important to always try to make a payment.

However, if you are unable to make a payment towards your council tax it’s vital that you speak to your local authority as soon as possible.

Sometimes people struggling with their finances will prioritise other debts over council tax payments which can be a costly mistake.

The council has extra powers to allow it to reclaim what is owed, including utilising enforcement action from bailiffs and sheriff officers.

That’s why it is important to speak with your local authority should you find yourself falling behind on payments. No one likes to admit they’re struggling with their finances, however, by being open and honest about your circumstances you are likely to come to an arrangement with the council to make repayments over an extended period.

If you continue to fail to make council tax payments you will likely be asked to repay what you owe in one large lump-sum. If you fail to make this the council has the right to collect unpaid tax from your wages or benefits. The council can also call for court action to reclaim unpaid council tax payments.

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How can I deal with council tax debt?

If you’re struggling with council tax arrears, the most important thing to remember is that you’re not alone. Thousands of people across the county are in a similar situation to you and taking steps to repay what they owe.

Be upfront: Honesty is the best policy when it comes to dealing with any kind of debt. It can be tempting to stick your head in the sand when you begin to struggle financially, however, it’s vital to be open and honest with yourself and the council when it comes to council tax repayments. By telling them about your situation you are likely to find a solution that stops court or enforcement action.

Budget: Setting a budget is one of the easiest ways to manage council tax. As one of the biggest monthly household payments made each month it’s important that you account for it in a budget to ensure that you can cover its cost whilst still having enough cash for remaining bills and utilities.

Check your details: Have your circumstances changed lately? Sometimes it can be hard to find the time to update every organisation of any changes in your life but by doing so you could be entitled to additional support or benefits. Council tax is affected by children moving in and out of your home, if you lose your job or if someone in your home starts to receive benefits. Any changes, let your council know.

 If you’re struggling with debt, speak to TAD our resident debt expert for free, confidential and professional advice.

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