14 min Read
05 Mar 2019

Written by Liam

Over 30 years experience in financial services, residential lettings and property sales. Director of a leading national estate agency chain, until leaving in 2008 to pursue other commercial interests. Vast experience in new business development, business change, management development and business strategy.

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What to do if you are struggling to pay your council tax

What to do if you are struggling to pay your council tax

According to data published in 2017 by the Ministry of housing, communities and local government (MHCLG), council tax arrears totalled 2.8 billion. With rates set to rise by 4.5% (on average) in April 2019, council tax arrears could rise further still.

So, if you find yourself in arrears now, or worried about the future, what action can you take?

Check if you should be paying council tax in the first place

You’ll usually be required to pay Council Tax if you’re 18 or over and own or rent a home. A full Council Tax bill is based on at least 2 adults living in a home. Spouses and partners who live together are jointly responsible for paying the bill. You can get 25% off your bill if you count as an adult for Council Tax and either:

  • you live on your own
  • no-one else in your home counts as an adult

You can get a 50% discount if no-one living in your home (including you) counts as an adult (see below for clarification on who counts as an adult). You won’t have to pay any Council Tax if everyone in your home (including you) is a full-time student.

Who doesn't count as an adult?

  • children under 18
  • people on some apprentice schemes
  • 18 and 19-year-olds in full-time education
  • full-time college and university students
  • young people under 25 who get funding from the Skills Funding Agency or Young People’s Learning Agency
  • student nurses
  • foreign language assistants registered with the British Council
  • people with a severe mental impairment
  • live-in carers who look after someone who isn’t their partner, spouse, or child under 18
  • diplomats

Contact your council as soon as possible

If you fall behind with your Council Tax payments the first thing you should do is contact your council. Discuss with them your personal situation and if possible agree a revised payment plan. Councils require full payment of council tax by the end of the tax year but in extreme circumstances may agree repayment over a longer period. When you negotiate a repayment plan make sure you only agree to repayments you can afford as defaulting on an arrangement may cause you major problems.

Did you know...

You can pay your council tax over 12 months (rather than 10) and so you can ask your council to re-schedule your repayments, reducing your monthly outgoings

Make sure you are claiming all discounts and exemptions you are entitled to

Your Council Tax bill can be reduced in one or more of the following ways:

  • disabled band reduction scheme - if your disability means you need more living space
  • apply to your local council for Council Tax Reduction (sometimes called Council Tax Support)
  • discounts
  • exemptions

Disabled band reduction scheme

Having a disability does not automatically entitle you to a reduction

The requirements for a reduction are the property must be the main residence of one disabled person (adult or child). It must also have at least one of:

  • an extra bathroom, kitchen or other room that you need for the disabled person
  • extra space inside the property to allow for use of a wheelchair - wheelchairs for outside use only are excluded

The room or the wheelchair must be of major importance to the disabled persons well-being due to the extent of their disability. The disabled person can be an adult or child and does not have to be responsible for paying the Council Tax bill.

If your home is eligible, your bill will be reduced to that of a property in the next Council Tax band down. Even if your property is in Band A (lowest) you will still receive a reduction equivalent to reduction in Band B, C or D.

People who are severely mentally impaired

To be eligible for an exemption the person will need a doctor's certificate stating that they are severely mentally impaired and entitled to one of the following benefits:

  • Disability Living Allowance care component at the middle or highest rate
  • Attendance Allowance
  • Constant Attendance Allowance
  • Severe Disablement Allowance
  • Employment and Support Allowance
  • Incapacity Benefit
  • Income Support including a disability premium (this includes anyone whose partner has a disability premium for them included in their income-based Jobseeker's Allowance)
  • the disability element of Working Tax Credit

They may qualify for a Council Tax reduction if, both the following apply, the person:

  • is over State Pension age
  • would have been entitled to one of the above benefits if they were under State Pension age

People in hospital or care homes

Council Tax is not payable on properties left unoccupied by people who have moved to receive personal care and it's now their main residence. For instance if they've moved to a hospital, care home or elsewhere.

People in hospital or care homes Council Tax Reduction (sometimes called Council Tax Support)

You may get a Council Tax reduction if you pay Council Tax and your income and capital (savings and investments) are below a certain level. You may apply whether you rent or own your home, or live rent-free. You could qualify if you are out of work, or in work and earning a wage.

Second Adult Rebate 

You may get Second Adult Rebate if the person you share your home with is:

  • not your partner or civil partner
  • aged 18 or over
  • not paying you rent
  • not paying Council Tax themselves
  • on a low income

It' is no longer possible to get both Council Tax Reduction and a second adult rebate. If you qualify for both, your local council should award you the higher amount.

Discounts

A full Council Tax bill is based on at least two adults living in a home.

To find out if you should get a Council Tax discount, count the number of adults who live in your home as their main home and remember not to include any of the following:

  • children under 18
  • people on some apprentice schemes
  • 18 and 19-year-olds in full-time education
  • full-time college and university students
  • young people under 25 who get funding from the Skills Funding Agency or Young People’s Learning Agency
  • student nurses
  • foreign language assistants registered with the British Council
  • people with a severe mental impairment
  • live-in carers who look after someone who isn’t their partner, spouse, or child under 18
  • diplomats

If you are left with no one who counts as an adult, your Council Tax bill will be halved. If one adult lives in your home, your Council Tax bill will be reduced by 25 per cent. For houses that contain full-time students only, the bill will be reduced by 100 per cent

Second home discount

You may pay less Council Tax if you own or rent a property that isn’t the home where you usually live. Some councils give furnished second homes or holiday homes a discount of between 10 and 50 per cent. The amount of discount varies and is decided by your local council, so you will need to contact them directly to see if you qualify.

Exemptions and second homes

Unfurnished homes where no one lives are no longer exempt (They used to be exempt for 6 months) Your local council may however decide to give you a discount.

Homes undergoing major repair work or structural changes (eg rebuilding walls and floors) can be exempt for a limited period of time. Your council will tell you when you have to start paying and you’ll get a ‘completion notice’ that tells you the date you must start paying Council Tax.

Homes where the owner has died are exempt for up to six months after probate is granted (your legal right to sell the home)

Some homes are exempt for as long as they remain empty. They include homes:

  • of someone in prison (except for not paying a fine or Council Tax)
  • of someone who has moved into a care home or hospital
  • that have been repossessed
  • that cannot be lived in by law
  • that are kept empty because they have been compulsory purchased and so will be demolished

What will happen if I fail to keep up a repayment plan?

If you fail to agree or fail to maintain a repayment agreement your council can apply to the Magistrates Court for a 'Liability Order' (a demand for you to pay the full amount you owe, plus costs). If you receive a Liability Order you should still contact your council to try and agree a repayment plan that you can adhere to.

What will happen if I ignore a Liability Order?

If the Magistrate Court makes a Liability Order against you then your council can take enforcement action against you to recover the debt using one of the following methods:

Deduction from wages

Your council can order your employer to deduct a regular amount from your wages toward your unpaid Council Tax. If this causes you financial hardship, you can ask your council if they're willing to accept smaller payments.

Deduction from benefits

Your council may be able to apply for deductions if you are receiving Jobseekers’ Allowance, Income Support or Pension Credit.

Bailiff's

Your council can send bailiffs to your home to seize property to sell. The money raised goes towards paying your debt, plus costs. The billing authority must send a letter two weeks before the bailiff’s first visit stating how much money you owe under the Liability Order.

You can contact the Council and the bailiffs and offer to come to an agreement on payments. It’s important to do this straight away, because if the bailiffs make a visit their costs could be added to your bill.

Court hearing

If your council has tried using bailiffs but your Council Tax still isn’t paid in full, they may apply to the Magistate’s Court for a warrant committing you to prison. The council will only take this step when other efforts have failed.

Before issuing a warrant of commitment the court must hold a means enquiry with you present. A warrant will only be issued if the court is satisfied that the failure to pay is the result of wilful refusal or culpable neglect. The maximum period of imprisonment is three months.

The court may decide to postpone the period of imprisonment on certain conditions, normally relating to payment of the debt over a period of time. The court also has the power to remit all or part of the debt.

Where can I get advice?

Advice can be obtained from the following:

National Debtline

Step Change (Formerly the Consumer Credit Counselling Service)

Citizens Advice Bureau

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