Can I write off council tax debt?
It is possible to get your council tax debt written off, although this depends on who your council is and how they vote in a creditors meeting. This means that if you have built up council tax debts, a large percentage of these arrears can be eliminated through an Individual Voluntary Arrangement (IVA).
You must act quick as the collection process for council tax arrears is particularly heavy and includes:
- Home visits
- Removal of goods
- Enforcement agents visiting your home with the rights to force entry (peaceful entry with a days notice)
- County court proceedings
Which councils will accept IVA’s?
The following council offices will vote yes to your IVA proposal. This list is not final, it is just a list of councils which we have received one or more approval for. If your council is not listed, please get in touch and we will advise if your debt is eligible to be entered into an arrangement.
- Bolsover District Council
- Brighton & Hove
- Newcastle Under Lyne
- East Hampshire
- East Lindsey
- Newark & Sherwood
- Newcastle Under Lyme
- Kings Lynn & West Norfolk
- Kirkless Council (KPMG)
- Newcastle upon Tyne
- London Borough of Redbridge
- North Kesteven
- Redcar and Cleveland
- Reigate & Banstead
- Rochdale Borough Council
- Rugby Borough Council
- South Oxfordshire
- Surrey Heath Borough Council
- West Lancs Borough Council
- North East Lincolnshire
- Rhondda Cynon Taf Council
Council tax arrears, how far back?
Generally speaking, there is no limit to how far back the council can enforce debt collection on your council tax arrears. This means that councils are within their rights to collect debts owed to them for an unlimited amount of time.
Council tax bailiffs
If you do not pay your council tax on time, your council will instruct bailiffs to collect the money on their behalf. Before they do this, they will need to get a court order to do so (you will be notified of this in advance).
Once they receive this order and instruct bailiffs, bailiffs will try to access your property with the aim of seizing goods to sell to pay towards the debt.
You should receive 7 days notice before bailiffs arrive at your property.
Do not let bailiffs into your house.
If you receive a letter about bailiffs coming to your property, call us immediately for assistance.
What are the consequences of not paying your council tax?
When you miss paying your council tax or choose to don’t pay, the local council then sends you a reminder and gives you 7 days to get it paid. Should you fail to make an offer to pay before the time is up you’ll get a final notice that demands you to pay the entire year’s Council tax. If you miss payment of the final notice then the council can legally take legal action against you to get the tax that you owe them. Council tax payments are often spread over a period of 12 months or 10 months to make it more manageable, if you act quickly you may be able to restore your right to make monthly instalments.
If it is still not paid then the council can legally get your employer to deduct money from your wages as well as take money owed from these following benefits –
- Income Support
- Pension Credit
- Employment & Support Allowance
- Universal Credit
- Jobseekers Allowance
Debts that CAN be included in your IVA:
- Council Tax (previous years and current year if in arrears)
- Unsecured debts (overdrafts, credit cards, store cards, charge cards, catalogues, pay day loans, unsecured loans, doorstep loans, credit unions, debts with CCJ attached to them)
- Previous Utility Supplier debts; e.g. gas, electricity, water
- Previous Service providers e.g. digital TV, mobile phones, landlines
- Previous Debts secured against an asset that has been repossessed
- Vehicle HP and Properties
- Debts to family and friends.
- HM Revenue and Customs VAT, PAYE, Self assessed tax, National Insurance
As you can see, you can enter your council tax debts into your IVA and write off council tax debt with that solution. Different councils vote differently, so it’s important to find out if you qualify by speaking to a qualified advisor.
Debts that cannot be included in your IVA (Note: These debts are factored into your monthly household expenditure allowance):
- Mortgages and secured loans
- Hire purchase payments
- Student Loans
- Child Maintenance
- Rent & property service charges
- Current utility bills
- Current service providers
- Court fines
- Someone else’s debts
Lowering the cost of your council tax
You basically have four ways to lower your bill. You can get a disability reduction. This is when your home is customised in order to accommodate a physically disabled or mentally disabled person (any age, children included). If you believe you are qualified for this, simply contact your local council to get more information. They can back-date disability reductions.
A 25% discount applies if there’s just one adult over age 18. They call that a ‘single person’ discount. You also have various other discount types available called ‘status’ discounts. These are quite numerous and you can find out all about them by contacting the council or a local free advice centre.
Council tax reduction
There is the ‘Council Tax Reduction’, formerly referred to as the ‘Council Tax Benefit‘. If you and your family falls into the ‘low income’ bracket, you might be entitled to a council tax reduction. This will pay either all or at least part of your bill. It’s important that you file this claim ASAP because they usually don’t allow backdating. To find out more on Council Tax Reduction and how to apply go to this website – www.gov.uk/council-tax-reduction.
More on council tax arrears
Council tax is what you call a ‘priority bill’. If you’re in arrears your local authority usually wants you to get caught up within that specific financial year. The years run from April through to March. If you’re unable to pay those arrears by the end of that financial year you’ll have to work out a plan for what you are realistically able to afford and draw up a personal budget sheet.
Take your budget sheet and offer whatever amount you can afford to pay toward the arrearages, over and above the normal payments. Ask them to give you special payment arrangement. Explain to them what amount you are offering and how it is going to prevent you from incurring any further arrears or court costs. Should they decline to negotiate with you then you should ask the local councillor to intervene, while you go on making your lowered payments.
When you make your payment toward the arrears it’s important to make it very clear what year you’re paying on. If not, then the payments may be put against arrears first resulting in the current bill going even farther into arrears. If the local authority does this, then consider filing a complaint and request help from your councillor. If that doesn’t work then try contacting the Local Government Ombudsman.
Transactional reduction scheme
You also have the ‘transactional reduction scheme’. It only affects a very small group of people living in areas that have been affected by a local government organisation.
Council rate banding
There are 8 bands of council tax which your property can fall into. Your property is “banded” to one of these categories by the council based on how much your property is worth.
To check the council banding of a property visit here.
Help with council tax debt
If you don’t have the means to repay your arrears, you need to contact the local authority and talk it over with them to see about making arrangements that will suit both parties. It’s very important that you stay in contact with them regarding your debt.
If you are going through extreme hardship it’s a good idea for you to also contact the local councillor as well as the local Citizens Advice Bureau to get support in dealing with your local authority.
After you get into arrears with your council tax, the local authority may make application to the magistrate court to obtain a ‘liability order’. This is where the magistrate issues a summons for you and gives you a specific date to appear before them. It’s not mandatory that you appear, however, if the arrears are because of an inability to pay then going is a good idea. That way you have the opportunity to explain your circumstances and have the magistrate hear it.
Even though the liability order is still granted, should you be summoned sometimes later to a committal hearing, just the fact that you’ve already explained the situation earlier is going to help persuade the magistrate about the validity of your case. The liability order application will be added to your bill.
Once an authority possesses a liability order it gives them a broad range of options when it comes to enforcement methods for recovering the arrears. Keep in mind that it’s never too late for you to open up negotiations to try and make some arrangements to repay. By doing that you might be able to avoid enforcement procedures. If you’ve received any reminder letters due to late payments, you should contact your local authority quickly. Sometimes this helps to prevent the issuing of a liability order toward you.
Attachment of earnings
This is one of their favourite methods of enforcement. After a liability order has been granted, your local authority has the power to demand that your employer send them a certain amount of your wages directly for payment on your arrears. Your employer may also charge you a certain amount for each deduction they make from your wages.
How much of a deduction there will be is based on a set formula. It can go as high as 17% of your overall take-home pay (net). Keep in mind that after a liability order has been put into place and your local authority makes the decision to go for the attachment of wages, then any negotiations over the monthly amount become a lot more difficult.
If you are already under an attachment of wages order and the amount left you is not enough for you to live on, you should seek some counsel from an IVA Advice advisor.
The attachment of benefit
Those who are receiving income support or a Job Seekers Allowance (means tested) are subject to having the local authority take the arrears directly out of your benefit. This would be at a standard rate of course.
Involvement of bailiffs
Now we come to the most common type of enforcement. Your local authority may send bailiffs to the location of your property. Their goal will be to view the property and seize and sell goods in order to pay off your debt. These bailiffs are required to gain peaceful access to your home prior to seizing any goods or possessions.
When a bailiff seizes goods they’ll first make a list of what you own so they can take things away and sell them in the future if you fail to come to a satisfactory agreement on payment. You absolutely DO NOT, by any law or any statute, let a bailiff into your home unless they’ve been there before.
The bailiffs can be difficult when it comes to negotiating and demand high payment amounts to keep from removing your goods. Bailiffs all operate under the instruction of your local authority (who has the power to call them off).
If you run into difficulties while negotiating with bailiffs you should contact your local authority and reach an agreement for payment. If they’re not being very helpful to you, then try contacting the local councillor or a free advice agency to find out what your options are.
Additional options regarding council tax enforcement
For non-payment and arrears of council tax the authorities have additional options available to them for collecting what you owe, like Charging Orders or Bankruptcy proceedings (for debts above a specific amount).
Prison and council tax
If you completely refuse to pay for your council tax, you may be sent to prison. The term can be as long as 3 months, especially when the court decides that you don’t have sufficient reason for not paying the Council Tax and you are simply refusing to do it.
Lots of people ask if they will go to jail for non-payment of council tax. While there have been a few cases within the UK where people were jailed over non-payment of council tax, it’s still extremely rare.
If you are able to make your arrearage payments and simply refuse to, then your local authority may ask that you be committed to prison. Before this can happen the magistrate must be thoroughly convinced that you are ‘willingly refusing’ to pay your tax or that you’ve been ‘culpably neglectful’ in doing so. That means you had the means to repay the debt but neglected to do so.
From there you’ll receive the above mentioned ‘summons to appear’. You’ll have to go before the magistrates and give them an explanation as to why you shouldn’t be put into prison. Making regular payment, no matter how small, is a good defence against imprisonment. It shows the magistrates you were sincerely trying. They have the power to simply write off part of all of your debt. If you fail to appear when summoned they will issue a warrant for your arrest.
If you need immediate FREE debt advice on how to write off council tax debt, click on our link below to get started.
Frequently Asked Questions:
Q. Can you go to jail for not paying council tax?
Although it is unlikely that you will go to jail for not paying your council tax, there have been many cases in which this has happened. You should seek immediate financial advice when you fall into arrear with your council tax.
Q. Can bailiffs force entry for council tax debt?
It is unlikely that a bailiff will force entry into your house for unpaid council tax debts. Although sometimes they will enter a property through a door which has been left unlocked, for example. If a bailiff does force entry into your property, they can only enter through a door.
Q. What happens when I can’t pay my council tax?
When you can’t pay your council tax on time, the debt will be passed quickly to a magistrates court, who will grant a judgement against you. The judgement is then passed on to a bailiff, who will look to recover the money from you.