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You need to act now to get rid of your council tax arrears. In this guide we explain exactly how to tackle your council tax problems.

Data published in a 2015 report on council tax debt has highlighted the worrying rise in people seeking help with their council tax arrears.

The figures showed a 372% increase in the number of people getting in touch about arrears — a jump from 13,353 people in 2010 to 63,016 just four years later.

This makes council tax arrears one of the fastest growing types of debt — second perhaps only to payday loans. In 2010, only one in ten had council tax arrears, while by 2014 this had risen sharply to 28%.

And not only did more people surveyed say they had rent arrears, but they also owe more on average too. By 2014 the amount people owed on average had grown from £675 in 2010 to £832.

This is at a time when people’s credit card debts are going down following the financial crash. But unlike debts from one off expenditures, council tax arrears can build up a lot more quickly, and soon begin to limit your financial freedom.

People now find themselves more financially insecure than ever — the story is all too common: one of renting rather than buying, working part time instead of full time, and struggling to pay the bills at the end of the month. But the only way to effectively manage your council tax arrears is to take action, contact your council and work out a payment plan that works for you.

We’re able to help with free advice on how to manage your debt, and our advisors have experience working out financial plans on a case-by-case basis – meaning we are ready and waiting to help get you started in paying off your arrears.

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Worryingly, if people are falling behind with their council tax payments it is often a sign that they can’t afford to make ends meet on a monthly basis.

So, what are the consequences of allowing your arrears stack up? Read on and we’ll give you some background information on council tax, what powers your local council has, and what should be done to get the weight of unpaid bills off your back.

Firstly, it should be noted that although your local council can’t actually add interest or supplementary charges to the amount of council tax arrears that you owe, they do have a great deal of powers they can use as leverage to make you pay up.

If you’re falling behind on your council tax bills, your local authority can act very quickly, and you could soon find they’ve passed on your debt to a debt collecting agency. This means you could end up with the bailiffs at the door, being summoned to court, or – in certain extreme cases – even facing time in jail.


Know your rights and how your home and situation affect your council tax

What is council tax, exactly?

Council tax is a system of local taxation that’s used in England, Scotland and Wales as a means of local councils collecting money. In short, it’s a tax on your home.

How much you pay really depends on the area you live in, and how your local council decides to redistribute and spend the money it has collected. In theory, local councils can raise or lower council tax, and though this doesn’t happen very often, local councils can hike up prices to balance the books and deal with budget changes.

To give you a general idea, the average Band D council tax set by local authorities in England in the year 2015-16 is £1484. This figure marks an increase of £16 (1.1 per cent) on the same figure the previous year.

Where does the money go?

By and large, the money raised is used to pay for local government functions — things like schools, the police and fire service, recycling, refuse collection, street cleaning, libraries, museums, planning services, facilities for young people, social care, and sports facilities. As you can see, it’s mainly used to pay for things which are needed to keep the local community ticking along.

All said and done, council tax helps pay for almost a quarter of all local council spending. In 2014-2015, the money raised from council tax covered just under 25 per cent of council expenditure in England.

As for the rest of the money, it comes from central government funding — either through government grants or through business rates, which are collected centrally and then redistributed to local authorities.

Once the money has been collected, there are a significant number of services which the local council must provide by law. The remainder of services are then determined by your local council.

Who decides how much council tax I have to pay?

Your property belongs in one of eight bands. Which one your home falls into depends on its property value, and the tax is then set as a fixed amount depending on the band.

To find out how much you have to pay you’ll need to know a couple of things first:

  • The valuation band of your property (from A to H)
  • The local council rate for that band
  • If you’re entitled to any discounts or exemptions

You can check out which band your property falls into here.

In England and Scotland, the valuation bands are based on property values on 1 April 1991, rather than the market value of what a property is worth today. In Wales, the valuation bands are based on values on 1 April 2003.

The amount of council tax to be paid is still based on a rate set by the local council — so the figures are very much dependent on certain factors, from how much the local council has to raise to pay for essential services to the valuation band of the property in question.

Can I get a discount on my council tax?

Under normal circumstances, you’ll have to pay Council Tax if you’re 18 or over and you own or rent your home.

A full Council Tax bill is based on at least two adults who live in the same household. Partners and spouses who live together are jointly responsible for footing the bill.

People as well as properties can be deemed exempt. Others can also receive a reduction on the amount they have to pay.

The main property groups which are exempt are:

  • Those occupied by full time students
  • Those occupied by people under 18
  • Armed forces accommodation
  • Flats which are unoccupied due to reasons like structural problems or major repair work
  • Properties unoccupied because someone has died
  • Properties unoccupied and repossessed by either a mortgage lender or a liable trustee in bankruptcy

There’s also a single personal discount for those living alone, or those sharing a property with someone who is an exempt party, such as a student. Most council areas give a reduction for single occupancy — which is 75 per cent of the total bill. There’s also a disabled occupancy reduction, and some discretionary reductions too.

You’ll get 25 per cent off your bill if you count as an adult and:

  • you live on your own (single person discount)
  • no-one else in your house is an adult

Normally you’ll get a 50 per cent discount if nobody in your home, including you, is counted as an adult. If everyone in your home – including you – is a full-time student, then you won’t have to pay any council tax.

Individuals can apply for a Council Tax discount here.

Other discounts and exemptions include the reduction for disabilities scheme (which covers you if your disability means you need more living space) council tax benefit (which covers people on low incomes).

So who doesn’t count as an adult when paying council tax?

These following people are not considered as adults:

  • Children under the age of 18
  • 18 and 19-year-olds still in education (full-time only)
  • Full-time college and university students (you can find more information on such discounts here)
  • Student nurses
  • People on certain apprentice schemes
  • Young people (under 25) who receive funding from either the Skills Funding Agency or Young People’s Learning Agency
  • Foreign language assistants registered with the British Council
  • Those with a severe mental impairment
  • Live-in carers — those who look after someone who isn’t their partner, spouse, or a child under 18
  • Diplomats


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What should I do if I’m in council tax arrears?

First and foremost, don’t ignore it. You should remind yourself that it’s possible to pay off the money you owe, however daunting this may seem. If you ignore the letter there’s a whole host of additional problems which could quickly come your way — and we’ll discuss how best to avoid these below too.

It’s a good idea to get in touch with your creditor — in this case the local council — if you’re behind on your payments. As a general rule, if they don’t hear from you then they may assume that you have little or no intention to pay, in which case they might decide to take the most severe action to make you do so.

At this early stage you should also take a look at your finances and try and work out a strict monthly budget. You should work out whether you can cut your outgoings anywhere, and also establish if it will be financially viable to increase the amount of council tax you’re paying.

You can call your council and ask to speak to the council tax department, then explain to them your situation and why you’ve been unable to pay. Your council may then agree to have your instalments split up over 12 months instead of the standard ten.

It’s important at this stage to explain to them your financial situation and why you’ve been having difficulty making the payments. You could also try and work out what you’re able to put aside for contributions to them each month, and see if they’re willing to accept smaller payments based on your particular situation.

Sometimes they’ll ask you to fill out one of their own budget forms to confirm what you’ve told them. If they do so, you should respond quickly, giving them they information they’ve asked for.

We have expert advisors who can offer free advice and help you work out what help is available to you.

What happens if I can’t keep up with my payments?

If you’re unable to keep up with your payments then your council is able to apply for a ‘liability order’ from the magistrates court. This allows them to demand the full amount that you owe. But even if you’ve received a liability order, you can still contact your council and ask them if it’s possible to work out a payment plan suited to you.

What if I ignore the liability order too?

If you fail to respond to the liability order and are still not able to meet the payment, then your debt may be passed on to a creditor. The council can also take action against you in a number of other ways, such as:

  • A deduction from wages

Your council can contact your employer and have a portion of your wage deducted directly to go towards paying off your debt.

  • A deduction from benefits

If you’re receiving jobseekers allowance, income support or pension credit, then you could have money taken out to pay your arrears.

  • A court hearing

If the bailiff process is unsuccessful, then the council can apply to the magistrates’ court and ask for a warrant committing you in person. This is a last resort for the council, and will only take place if they can prove the non-payment of your council tax is due to culpable neglect or willful refusal.

The maximum enforcement period is three months, but it is extremely rare for cases of council tax debt to result in a prison sentence.

Why you should deal with your council tax right away

Not only have people’s council tax arrears almost tripled in recent times, but local councils actually rank as one of the most unhelpful creditors when people find themselves in financial difficulty.

A third of parents dealing with money said that their local council was not helpful at all. This figure compares unfavourably to 20% for mortgage lenders, and a 28% average for all consumer creditors.

Problem debt reportedly costs the UK economy £8.3 billion through the domino effect it has on individuals and their families, and the knock-on effect it has on the demand of services at a local and national level, not to mention productivity levels.

Those with council tax arrears are also more likely to fall behind on other household bills too. Those with have arrears are three times more likely to be behind on electricity and gas bills.

Treat council tax as a priority debt

These figures are important given that council tax arrears should, by all accounts, be treated as a priority debt due to the consequences that arise when you don’t pay up. Your local council also has the power to take money directly from your wages or your benefits if you don’t pay up, in what’s called an attachment of earnings.

As previously mentioned, councils can’t levy charges or interest to your debt, but this doesn’t mean they can’t use the powers they do hold to their fullest extent. Councils can — and very often do — demand that you pay up your entire yearly council tax bill in a lump sum if you start to fall behind on regular payments. Once you’ve lost your right to pay in instalments, the situation can soon begin to spiral out of control.

They also have it within their power to carry out formal enforcement procedures, and will pass on your debt to debt collection agencies who can send bailiffs to your home to try to seize control of your property.

In order to successfully manage your debt, it has to be broken up into a payment plan suited to your needs, based on a level-headed and objective assessment of your household income. This is where we step in. We can handle your debt for you, deal with the council on your behalf and halt bailiff visits while we assess your situation.

Councils are likely to deal with you by threatening enforcement or making tough demands. On the whole, almost two thirds of people who contact their council about their arrears were threatened with bailiff enforcement, court action or were faced with a demand to pay the full amount of arrears owed in a single payment.

When councils make these sorts of demands it can often cause people to fall further into debt problems as they find themselves unable to pay large and unaffordable payments. Our team of council tax advisors have experience dealing with your creditor and taking control of your financial situation to work out a payment plan that is suited to your needs.

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How to deal with threats from the bailiffs

There’s a similar story when it comes to enforcement action too — although debt collectors are commonly used by councils in order to recover debt, it’s been shown that this can have a negative impact on those who are struggling to sort out their debt. This is despite the fact that a large number of people with council tax arrears end up dealing with bailiff enforcement action at some point.

April 2014 saw some new changes in the way bailiffs have to deal with the public when carrying out enforcement action. There are now strict guidelines in place which dictate exactly what bailiffs can and can’t do.

As part of this new government legislation, bailiffs are now banned from entering homes at night or when only children are around. This means they can only visit between the hours of 6am and 9pm.

There are now also some safeguards which prevent bailiffs from taking basic household and work-related items. Things like your cooker, refrigerator, microwave or washing machine are now seen as reasonably required to satisfy basic domestic needs of debtors.

The changes to the law also means there must be a notice period of at least seven days given before bailiffs can visit debtors’ homes to take control of the goods. But despite these stipulations, bailiffs are still known to visit debtors’ homes outside of the allotted hours. They’re also known to visit when only children are at home.

It’s little wonder then that a huge majority of those who’ve had experience dealing with such debt say it has increased their stress and anxiety levels, with well over half admitting that it has put their family under strain.

What’s the cost of dealing with the bailiffs?

Once the local council has passed on your case to the enforcement agency, you’ll have to pay fees on top of the debt you already owe, and such fees can often be very high — although these depend on the particular agency that is dealing with your case.

People are regularly charged fees of £75 solely for being sent an enforcement letter, while bailiff visits can cost some people in excess of £235, according to survey results. Fees are then fees added on for the sale of your goods in the event of property seizure.

Safe to say, once your debt has been passed over it can add hundreds of pounds to the initial amount. Bailiff action can mean the council collects the rent arrears it is owed quicker than otherwise, but it can force the debtor into a debt cycle that is very hard to escape.

You can let us help you and avoid getting the bailiffs at the door. We’ll work to pause enforcement action while we work out a sensible payment plan.

How do I complain about my council tax?

If you’re unhappy with your council tax for whatever reason, you’ll have to complain to the council first. This process can take up to 12 weeks. If you remain unhappy about the outcome, or if you think they’re taking too long to resolve your complaint, you may be able to pursue a complaint with the Local Government Ombudsman.

Get help

You can get free help and advice to deal with bailiffs from the following sites:

You can also talk to a specialist advisor at Citizens Advice by searching for your local office.

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