Council Tax is considered a priority debt which means there can be serious consequences if you refuse to pay or miss a payment.
But with households already facing a significant hike in their household bills and prices expected to keep rising, millions are already worried about being able to afford their Council Tax payments.
If you’re struggling to afford your Council Tax bill, you may be eligible for Council Tax support in the form of a payment plan.
This can split your current payment schedule into smaller, more manageable amounts that you can easily afford.
In this guide, we’ll explain your options for when you can’t afford to make your Council Tax payments including how to set up a Council Tax payment plan with your local council.
What is Council Tax?
Council Tax is an annual fee paid to your local council for the funding of community services and amenities such as road maintenance, waste collection, and street lighting.
While there are some exceptions, every household occupied by someone over the age of 18 in the UK must pay Council Tax (couples are jointly responsible).
The amount is based on the property’s value relative to properties in the area (known as a valuation band).
How much Council Tax will I pay?
Your Council Tax bill is based on a number of factors, including:
- Your property’s value
- Your personal circumstances
- How much funding your local council requires
When you receive your Council Tax bill for the year, your valuation band will be noted on the letter.
While this information should be correct, figures are still based on what your property was worth in 1991 and some households have been successful in getting their Council Tax band changed.
If you think your valuation band is incorrect, you are within your right to contact your local council to challenge it.
If you are successful, you will receive your new valuation band and may even be backdated for the years you paid the wrong amount.
What happens if I miss a Council Tax payment?
If you miss a Council Tax payment, you will have Council Tax arrears. This essentially means you owe money to your local council.
When this happens, you should contact your local council as soon as possible and explain why you missed a payment.
Waiting for them to contact you can result in serious action being taken again you and will only make the situation worse.
If you can pay the missed amount within seven days, the debt will be cleared and you can continue making your monthly payments as normal.
However, if you don’t pay, you will receive a final notice or reminder notice giving you seven days to pay the full amount for the next year.
If this amount isn’t paid within seven days, your local council can then apply to the court to forcibly recover the debt from you in something known as a liability order.
When this happens, court costs will also be automatically added to your outstanding balance.
If you miss another payment within the same financial year, you will be served with a second reminder notice.
How do I set up a Council Tax payment plan?
It is normal to miss a payment here and there but if you know you can’t pay your Council Tax going forward, you must do something about it as soon as possible.
Never assume you have no choice but to just stop paying.
Contact your local council
If you are struggling to afford your Council Tax payments, you must let your local council know sooner rather than later.
They will offer advice and give you options for repaying the missed amount in a way that is manageable for you.
Make a payment plan offer
If you’re confident you won’t be able to make your current payments, you can make a payment plan offer based on what you can afford.
For example, if you usually pay Council Tax in 10 monthly installments, your local council may allow you to spread the cost over 12 months.
This will lower your monthly payments which can reduce the financial burden and give you greater peace of mind in the event of an unexpected expense.
Check if you’re entitled to further help
As well as a Council Tax payment plan, you may also be eligible for further help and support to help you make your household bills every month.
If you’re on a low income, receive benefits, or live alone, there is a good chance you are entitled to a Council Tax reduction or discount. Contact your local council to find out if you qualify.
Can I change my Council Tax payment plan?
If you’re not happy with the payment plan suggested to you by your local council, you may be able to suggest a different amount.
For example, your local council will more than likely suggest paying your total annual amount over 12 months instead of ten.
If you decide to do this after April 30, you will need to make a payment every month until March 31 before your 12-month payment plan can start.
It is, however, also possible to pay twice a year (on April 1 and October 1) or every two weeks as long as your total bill has been paid by March 31.
This can be done by contacting your local council but must be done as soon as possible with failure to do so putting you at risk of legal action which can result in an enforcement agent visiting your home and forcibly removing your belongings.
Can I go to jail over an unpaid Council Tax bill?
Although Council Tax is classed as a priority debt and must be paid first, you will only go to jail as a last resort if your local council has been unsuccessful in recovering the debt on several occasions.
This will also only happen if the court decides you are deliberately not paying your bills and are taking extreme measures to avoid legal action. In this instance, you could be sent to jail for up to three months.
