The Poll Tax is back!

by CCCS on 29 September 2011  |  10 comments
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The Poll Tax is a thing of the past. So why are people still receiving Poll Tax demands?

Anti-Conservative rhetoric, riots in London and a hated government policy that favoured the rich over the poor. Not 2011 but 1990, and the country’s malaise over the infamous Community Charge, nicknamed the Poll Tax. And now, extraordinarily, it’s back on our radar.

The Community Charge was brought in to replace the Rates property tax in 1989 (Scotland) and 1990 (England and Wales). Rather than a tax on the size of properties (either the rental value or the selling price), the Community Charge was calculated by assessing how many people lived at the property.

This was seen as a regressive tax, unfairly penalising the poor (as they tend to have larger families). The oft-told example was that a duke living alone in a castle would pay much less tax than a six-person family living on the breadline.

The introduction of the tax lead directly to the riots in central London in the summer of 1990 and the political downfall of PM Margaret Thatcher in the autumn of that year.

So why the political history lesson from a debt help charity, about a tax that was abolished 18 years ago to make way for the less divisive Council Tax? Well, in the last week we’ve heard several stories of people receiving Poll Tax demands.

Poll Tax demands

We were contacted last week by a lady in Scotland who was looking for advice on a demand the council had sent her aunt. The demand was for quite a low amount – around £75 – but it was certainly a bolt out of the blue.

Who would have given a second thought to a debt owed on a tax system that was eliminated when John Major was in power?

We subsequently mentioned this email on the MoneyAware Twitter channel, and were surprised to hear from other Scottish-based insolvency experts who said that they had received similar questions recently.

Why had this come up? Surely it couldn’t be right that a council could claim back 20-year-old taxes? It took a bit of digging but the answer was found in the difference between limitation laws in England and Wales, and Scotland.

In England and Wales the standard six-year time limit on taking court action to recover debts (the ‘statute barred’ legislation that forms part of the Limitations Act) covers council tax.

However in Scotland the equivalent law (the Limitations and Prescriptions Act) has provision for every type of debt bar one: Council Tax arrears. So legally English and Welsh councils are bound by a six-year time limit, but Scottish councils can claim tax arrears as far back as they like (whether there’s a moral case for sending debt reminders out is another matter).

Why Council Tax debts are important

So what happens if a council contacts you for unpaid tax and you’ve got no six-year get-out clause? Whether it’s a Poll Tax demand or a Council Tax notice, it’s important that you sit up and take note. You need to do something about it straight away.

Arrears to the local council are one of the few debts that could lead to jail time if you wilfully ignore the demands. We count them as ‘priority arrears’ and are much more important to pay back promptly than a credit card bill or a loan repayment.

Communication is key with priority arrears. Speak with your local council and try and work out an affordable repayment plan, and then stick to it. If you don’t they could get bailiffs involved, or let your employer know that you’re in arrears by taking money from your wages.

Get advice on your council tax arrears

We’ll leave you to discuss the reasons why these demands have appeared 20 years later; it was interesting to have to deal with a Poll Tax demand and brought back a lot of memories of the early 1990s.

Instead we’ll say that if you receive any kind of tax demand from your local council get in touch with CCCS or use our online counselling service if it’s going to be difficult to pay it back.

It’s vital that you do something. The Poll Tax brought down Maggie Thatcher – 21 years later don’t let it bring down you as well.