Council Tax arrears: what to do if you can't pay your Council Tax bill
Council Tax arrears are at record levels. Have you paid yours?
More and more households are struggling to pay their Council Tax each month, with the average amount owed rocketing 25% since 2011, a charity has warned.
Analysis of StepChange Debt Charity’s clients found that those with arrears on their Council Tax typically owed £961 last year, up from £717 in 2011.
What's more, the precentage of its clients in Council Tax arrears has more than doubled to 30% over that time.
So what should you do if you’re struggling to pay your Council Tax?
What is Council Tax?
Council Tax is a tax levied on households. In most cases the people living in a property will be responsible for paying the Council Tax. The council uses the money to pay for local services such as schools, rubbish collection, roads and street lighting.
How much you have to pay depends on which council area you fall under and which Council Tax band (ranging from A to H) your property falls into.
Councils vary on how they collect Council Tax, but most send bills for the coming year around the end of April. The total sum is normally payable in 10 monthly instalments, meaning residents get a two month Council Tax break in February and March. However, some local authorities will allow 12 equal payments over the year.
What happens if you fail to pay your Council Tax?
Council Tax is a ‘priority debt’ which means not keeping up to date with your payments can have serious consequences. If you miss an instalment, you will get a reminder notice requiring you to pay by a certain date. If you miss that date you’ll be asked to pay the bill for the whole year in one go. Fail to do that and the council could take you to court, which will mean extra costs for you.
Once the council has got a court order for the money, things get even worse. It can arrange for an “attachment of earnings order” to take the money from your salary. Or if you’re claiming benefits it can apply to have the money taken from the money you get.
The council can also send bailiffs round to recover the debt, issue bankruptcy proceedings, while you could even be sent to prison.
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Why are people falling behind on Council Tax?
The Debt Advisory Centre’s research reveals that young people aged between 18 and 24 are most likely to have fallen into arrears with their Council Tax bill. A quarter of under 25s questioned admitted to having fallen behind with Council Tax payments.
More than a third of those with Council Tax arrears say that they failed to pay their bill because they needed to use the money to cover their rent or mortgage. A further fifth said they needed to pay utility bills, while 14% needed the money to buy food.
One in six who failed to pay Council Tax bills said it was because they needed to cover unsecured debt repayments such as a credit card bill.
What should you do if you can’t pay?
If you’re struggling to pay your Council Tax or are behind with your payments you should contact your local authority as soon as possible – ask if it can offer an alternative payment plan.
Meanwhile, take a look at your outgoings. You should prioritise Council Tax above other debts such as credit cards and loans.
If you still can’t afford to pay, contact a debt charity such as Citizens Advice or Step Change.
Read Where to get free debt help.
Can you get your bill reduced?
You might be able to get a discount on your Council Tax bill in certain circumstances. If you live alone, or share your home with someone exempt from Council Tax, you can get a 25% discount on your annual bill.
Students, apprentices, student nurses, carers and people who are severely mentally impaired are all exempt from Council Tax.
Some councils can also give a discount for empty homes – but they must be unfurnished. The discount varies from 50% to 10%. If you’re a landlord without tenants in a property you should contact the council to find out what you have to pay.
If you are on a low income or receiving housing benefit to help pay your rent, you may be entitled to claim ‘Council Tax reduction’. You should contact the housing benefit department of your local authority to find out if you’re eligible.
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