Council Tax: Attachment of Earnings – All You Need to Know
If you’ve been contacted about an attachment of earnings order relating to your outstanding council tax bill it’s useful to know all the facts about what’s going to happen.
We’ll take you through what a council tax attachment of earning is, answer some common questions about how the attachment or earnings order works, and give you some advice about how you might be able avoid one in the first place.
What is an attachment of earnings?
An ‘attachment of earnings’ is a proceeding that means a local council can take money from your wages before you receive it. It’s put into place with a legal document that’s sent to your employer.
Is an attachment of earnings the same as a County Court Judgment (CCJ)?
An attachment of earnings almost always relates to unpaid council tax debt and usually occurs because a person has got a County Court Judgement (CCJ) as a result of not paying the debt but has then failed to keep up with the arranged payment as part of this CCJ.
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How do attachment of earnings orders work?
Attachment of earnings orders work by taking money directly from the your wages and paying it towards your council tax debt.
Such an order will give the your employer the power to draw money directly from your most recent wage slip. The person in charge of your employer’s payroll will make an adjustment to the way you’re paid, meaning a certain amount of money is sent directly to the council as one monthly payment.
The agreed payments will be taken from your wages in a similar way your tax, national insurance and pension contributions are. You’ll see the amount that’s been paid towards the attachment order on your pay slip.
What should I do if I receive an attachment of earnings order?
Once an employer applies for an attachment of earnings against you, you will be sent what’s known as an N56 form. You must return the reply form within eight days of receiving it, as well as providing details like a copy of your most recent wage slip.
As well as your wage slip, you will need to provide further financial information including a personal budget summary and your income and expenditure.
What happens if I think there’s an error with my attachment of earnings order?
A complex process has to take place before an attachment of earnings order is put in place – and because of this, it’s unlikely that an error will have occurred.
However, that’s not to say that it’s impossible, so if you think there’s an attachment of earnings going through that shouldn’t be, it’s best that you talk to the council who ordered it as soon as possible.
How much will I be paying?
The amount you’re going to be paying depends on how much you earn. An attachment of earnings won’t take anything from you if you earn less than £300 per month or £75 per week.
Above that amount and a sliding scale begins and a percentage of your net (take home) earnings is deducted.
If you’re paid monthly, the following information will help you work out how much of your income will be deducted:
Over £300 but less than £550 – 3%
Over £550 but less than £740 – 5%
Over £740 but less than £900 – 7%
Over £900 but less than £1,420 – 12%
Over £1,420 but less than £2,020 – £17%
Over £2,020 – 17% of the first £2,020 then 50% of the amount above £2,020
The amount is the same if you’re paid weekly – but we’ve broken it down here for quick reference:
Over £75 but less than £135 – 3%
Over £135 but less than £185 – 5%
Over £185 but less than £225 – 7%
Over £225 but less than £355 – 12%
Over £355 but less than £505 – 17%
Over £505 – 17% of the first £505 then 50% of the amount above £505
The average full-time wage in the UK is around £28,000 – meaning a take home pay of around £1,800. If you were to receive an attachment of earnings on a monthly wage around this amount you would be paying about £300 toward the debt each month.
As you can see, this is a substantial figure – so it’s best to avoid an earnings order if at all possible.
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When will the money start being deducted from my wages?
Your local council will look to get the attachment of earnings implemented as quickly as possible so the outstanding amount owed is repaid quickly. They will let you know when the first payment will come out – although you can ask them or your payroll department if you’re not sure.
Can the monthly payment amount change?
Yes. Remember, the amount is calculated based on your ‘net’ pay, so if you work any overtime, earn any commission, get paid a bonus or anything else that results in pay increases, then your attachment of earnings will follow.
What happens if I’m off work sick?
If you’re paid for your sick leave then deductions will continue as normal. If the amount you take home is reduced (as it’s likely to be if you go on to statutory sick pay) then the attachment amount may reduce too.
If your earnings drop below the minimum amount for deductions, then check with your payroll department or the council involved that the attachment will be put on hold and you will stop making deductions.
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What happens if I’m off on maternity leave?
A local council can’t take money away from statutory maternity pay – but they can if your employer is continuing to pay you a contractual maternity pay during this time. If you’re not sure how or what you’re going to be paid, it’s important to talk to your payroll manager to discuss payment.
Can I just get my employer to stop paying?
It might be tempting to try to get your employer to stop paying – and while that’s probably not going to be possible if you work for a large company, it may be a conversation you could have with a business owner of a smaller company – especially if it’s someone you know.
Be warned though, because an attachment of earnings order has been issued through the court, any failure to implement it properly would be deemed a criminal offence and could lead to legal repercussions for your employer.
Can I make another arrangement that doesn’t involve my job?
Unfortunately not. If an attachment of earnings has been granted than it’s the only way that the debt can be repaid from that point forward. This is why it’s best to try to prevent this action being taken before a court order is obtained.
Don’t worry though, your financial details are held under strict data protection law by your employer and will only be viewed by people who need to know about your finances – which is usually only a payroll team.
Will an attachment of earnings affect my job?
An attachment of earnings isn’t likely to cause you employment problems directly – but problems with your finances could. If you’ve got a CCJ or you’re having financial difficulties you might be under a contractual obligation to tell your employer about this.
Some financial organisations and government departments require this kind of disclosure, so if you’re unsure, check your contract thoroughly – and if you’re still not 100% certain, speak in confidence to a union representative or human resources department adviser.
It’s worth noting that an attachment of earnings cannot be made against people working in the armed forces – but Ministry of Defence payroll teams will be well aware of this, so the issue shouldn’t ever crop up.
What happens if I move to a different place or work?
If you move to a different place of work there can sometimes be a delay in information that relates to tax codes and PAYE (pay as you earn) deductions reaching your new employer.
To be sure that you’re staying within the law when you change jobs, you should let your new employer know about an attachment of earnings order as quickly as possible.
If I’m made redundant do I have to pay out of any settlement?
No, redundancy payments are exempt from attachment of earnings deductions.
How to avoid an attachment of earnings
Most attachment of earnings come about because of a breakdown in communication between the person paying toward a council tax debt and the council themselves.
While you’re legally obliged to make a payment toward a County Court Judgement it’s not uncommon for people to have problems with such payments.
If this is the case you should speak to the council in question as soon as possible – payments should always be affordable – and a council will definitely explain how you can get support if your financial situation has changed. This may include being able to arrange alternative payment you’re able to afford.
Alternatively, you could use an approved debt relief solution, such as an Individual Voluntary Arrangement (IVA), to manage their debts, freeze interest and charges and stop pressure from people you owe money to.
Where can I get debt advice and more information on an attachment of earnings?
If you need debt advice or more information about an attachment of earnings order, or additional debt, you can always speak confidentially with one of our friendly debt advisers on 0800 118 4815.