What If I Can't Pay My Council Tax?

Council Tax poses problems for many people. As the amount you pay is based on the value of the property in which you live, rather than your income, many people find it difficult to meet their Council Tax obligations. This problem has only been exacerbated as a result of the recent economic crisis, and appears likely to get worse when properties are next revalued.

If you cannot pay your Council Tax, it is vital that you contact the council as soon as possible. In general, councils do recognise the inequity of Council Tax regime, and are willing to draw up a workable payment plan. However, if you simply ignore the problem it will not go away; rather, you will incur administrative fees that can severely inflate your bill. Ultimately, you will be forced to go to court – and this outcome occurs more quickly than you might imagine.

First Steps

Council Tax is generally paid in 10 monthly instalments. If you are aware that you will not be able to pay an instalment, you should contact the council immediately. In most cases, they will give you a grace period to pay your bill. On the other hand, if you have already missed a payment you will receive a reminder from the Council giving you a further week to pay. If you continue to miss payments the Council may revoke your right to pay in instalments, and demand the full amount in one go.

Reminder Letters

You will probably receive three reminder letters about Council Tax non-payment. The first will come if you miss a payment, the second will be a reminder and the third will be a final demand. If at all possible, you should pay by this point at the latest.

If you cannot pay, you should contact either the council or your local Citizens Advice Bureau. They may be able to liaise with the council to arrange a lengthier payment period. They will also be able to help you apply for Council Tax Benefit if you qualify for it. You do not need to be out of work to qualify for Council Tax benefit. If you are the sole Council Tax-paying occupant of your property, you will probably qualify for a 25% reduction. There are further means tested reductions for those on lower incomes and with savings of less than £16,000.

Court Summons

If you still do not settle your bill you will receive a court summons. By this point you will already have incurred court fees of around £125. A very small number of debtors actually turn up to their court appearance; there is no necessity to do so unless you dispute liability.

You will then be served with a Liability Order which will give the Council power to pass your debt onto private bailiffs. It is vital that you negotiate a settlement with the council before this point; you will be given a 10-day grace period, but after this the council will claim that they can no longer deal with you. Although this is not legally the case, it is very difficult to have bailiffs called off after this point.

Early contact is the key in these cases. The quicker you get in touch with the council, the quicker they can help you arrange a mutually acceptable payment plan.