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What Happens If You Don’t Pay Council Tax? article
What Happens If You Don’t Pay Council Tax? article

What is Council Tax?

Council tax is a vital source of income for local governments and authorities. Without it, they would struggle to provide important services such as public transport, road maintenance and education. It is an essential tool for ensuring the well-being of communities and supporting the growth and development of cities and towns.

Council tax is a priority bill. Failure to stay on top of your payment arrangement could lead to council tax arrears and eventually enforcement action.

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How is Council Tax Collected?

Council tax is typically paid in instalments straight from taxpayer bank accounts via direct debit, starting from the beginning of the financial year. Regardless of whether someone owns or rents their home, all domestic property owners pay by instalments as a way to contribute to the collective success of their community.

While council tax can be viewed as a burden in some cases, it is ultimately an important component of any thriving society, providing much-needed funding for essential services that benefit everyone.

What Happens if You Don’t Pay Council Tax?

If you fail to pay your council tax for any reason, there can be serious consequences. While it isn’t a criminal offence not to pay your bill, you may face penalties or further costs from your local government, and you may also damage your credit score if you have difficulty paying.

In order to avoid a knock on the door from the authorities, or an enforcement agent, it’s crucial to stay on top of your council tax account payments, especially if you want to protect your financial well-being and that of your community.

Failing to pay your council tax may lead to a number of consequences, including legal proceedings being brought against you such as additional costs, fines and even prison.

Therefore, if you know that you will have problems paying council tax, it is important to seek assistance as early as possible in order to avoid these serious consequences.

Council Tax Collection & Enforcement

1. First Reminder Notice

If you don’t pay before the deadline, you will be sent a reminder to make payment. You must pay in full the amount displayed on the notice within seven days from the date on the reminder.

This first reminder notice is an opportunity to make things right and get back on track with your payments. Failing to take advantage of this and instead allowing your debt to grow, will have you finding yourself in a much worse position. Don’t wait until you’re in over your head before taking action.

2. Second Reminder Notice

If you fail to pay after the first reminder, you may be issued with a second reminder notice. This second reminder is sent out by your local government authority shortly after the due date on the initial notice has passed. Again, you are given seven days from the date of the reminder notice to settle your outstanding debt.

The second reminder is your last chance before more serious action is taken. At that point, you will be required to pay the full amount outstanding, plus any legal fees and late payment penalties that have accrued.

If you don’t pay, you’ll be in danger of being removed from being able to pay in instalments. Furthermore, non-payment of your council tax may lead to court action being taken against you, which can result in large fines, an enforcement agent being sent to collect council tax, or even up to three months jail time depending on the circumstances.

Therefore, it is imperative that you take steps to address any outstanding payments as quickly as possible, in order to avoid serious consequences for yourself and your family.

3. Final Reminder Notice

Once you have been reminded for a third time you you will have lost your right to pay by instalments and the whole outstanding balance is now due. If you don’t pay within seven days of the final reminder, the council will begin to take further action.

You may find your local authority has sent more than one final notice to your household. This is because, by law, authorities are obligated to send a final notice to each liable taxpayer within the household. All final reminders display the account balance in full.

Being issued a final notice mean this is your last chance to settle your council tax debt before your local authority applies to the courts for permission to collect the debt from you.

4. Court Summons

When you fail to respond to all reminder notices, a summons to appear at a liability order hearing at the local Magistrates court will be issued.

The summons will state the full amount due and the date and time you’re expected to attend court. At this point, you will have 14 days to prepare for your hearing. You should spend this time collecting any evidence and documentation you wish to present at the hearing as part of a valid defence.

The council may still consider establishing an alternative payment arrangement during this time, however a liability order will still be issued to ensure the debt is secured. Further more, there is likely to be additional court costs incurred.

Failure to appear on the court hearing date may result in a warrant being issued for the individual’s arrest. Court summons are a serious matter, and it is important to take them seriously in order to avoid further legal repercussions.

5. Liability Order

A liability order is a legal document that give the local authority certain powers to ensure that individuals pay their unpaid debts. Depending on the severity of the debt, these powers can include:

  • attachment of earnings
  • deduction from benefits
  • use of enforcement agents
  • bankruptcy
  • charging orders
  • commital to prison

Receiving a liability order indicates that you have already fallen behind on your council tax and are unable or unwilling to settle the debt voluntarily. Nevertheless, it is crucial for any individual with a liability order to seek legal advice as soon as possible.

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How Can Payment be Enforced?

  • Attachment of Earnings

An attachment of earnings is a court-ordered process in which an individual’s wages are withheld and used to pay off unpaid council tax directly. Typically, this type of attachment is issued by local councils that have been given the debtor’s employment details.

Once an attachment of earnings has been issued, the debtor’s employer must comply with the order and begin withholding a certain portion of the individual’s earnings each payday.

This type of attachment ensures creditors that debts are paid off in a timely manner, even when the debtor fails to make payments. In addition, by involving employers, this process provides an additional layer of accountability and ensures that debts are collected efficiently.

  • Deductions from Benefits

Deductions from benefits is another way an individual can be forced to pay towards their year’s council tax bill.

These deductions are usually taken from Universal Credit, Jobseeker’s Allowance, Pension Credit, Income Support and Employment Support Allowance.

This action will often only be taken if the deduction will manage to clear the debt in the current tax year. If a deduction will not clear a debt in a reasonable timeframe, the council must look for an alternative enforcement action.

  • Enforcement Action

Local authorities may also pass your unpaid debt to external enforcement agents, previously known as bailiffs.

In many cases, an enforcement agent will only be sent as a last resort. This is because sending enforcement agents can be an invasive and expensive form of recovery for the debtor. For this reason, the council will always prefer to pursue another recovery action first.

If enforcement agents are sent, they will be instructed to collect the debt in the most efficient and cost-effective way possible.

If a debtor refuses to cooperate or make any payment arrangements, agents are authorised to to begin recovery proceedings. The recovery process can include entering a property, seizing goods and selling them in order to recover the debt. In severe cases, enforcement agents may also take control of the property and apply for a warrant of eviction.

  • Bankruptcy Proceedings

If you do not meet any obligations under a liability order, a motion for bankruptcy order can be filed in county court. This only applies to individuals who have accrued over £5,000 in debt.

This process involves enforcement agents working with the court to collect the outstanding council tax payment debt from the debtor and can be a valuable tool for recovering large sums of money.

Bankruptcy is a serious issue, as individuals who go bankrupt are often left with very few financial resources and are unable to pay off their debts. What’s more? Any charges incurred relating to bankruptcy proceeding will be added to your existing debt.

Local authorities will only start bankruptcy proceedings in severe cases where extensive debts have been accrued and are unlikely to be paid back by the debtor.

  • Charging Order

Another option is for a charging order to be placed on the debtor’s property. This is typically done if the amount owed is greater than £1,000.

Once a charging order has been granted by the court, it gives the council certain rights over the ownership of the property in question, including the right to forcefully sell it if necessary.

While this procedure can be an effective means of collecting unpaid charges, it can also have serious consequences for homeowners who may lose their property as a result of falling behind on their taxes.

However at this point, if you still haven’t paid your council tax bill, you can expect that the council will do everything within their power to recover those unpaid bills.

  • Commital to Prison

If an enforcement agent is unable to find sufficient goods or funds to cover the unpaid council tax, the council can seek a court order to have the debtor committed to prison for a maximum of three months.

This is typically seen as a last resort, as committal proceedings are often quite lengthy and time-consuming. Nevertheless, it is an important tool for ensuring that individuals who refuse to pay their taxes are held accountable for their actions.

In Scotland, Wales, and Northern Ireland, you can’t be sent to prison for not paying council tax. However, by contrast, committal to prison still exists in England as a punishment if you do not pay your council tax.

If You Are Struggling to Pay Your Council Tax

No one should have to worry about how they will pay their council tax, so please do not hesitate to seek help if you need it.

  • Find Out if You Are Entitled to Council Tax Support

There are a number of government schemes that provide financial assistance to people who are on a low income or unemployed. If you are eligible, you could get up to 100% of your council tax paid for. If you are awarded council tax support, it will be paid directly to your local authority, and you will then need to pay the balance of your council tax bill.

  • Get Advice on Your Finances

If you are struggling with your finances, there are a number of agencies that can help you get back on track. The first step is to reach out for help. Don’t be afraid to ask for help when it comes to your finances.

With plenty of resources available to those who need it. So if you’re feeling overwhelmed, know that you’re not alone and there is help out there.

Are you currently struggling to keep up with your council tax payments?

If you’re facing debt trouble, don’t worry! You are not alone. Many people have difficulty managing their finances and end up in debt.

Creditfix is the UK’s largest provider of debt solutions. We have a wide range of debt solutions available, and our expert advisers can help you find the best solution for your financial circumstances. We understand that debt can be a worrying time, so we aim to provide a debt solution that puts your mind at ease.

Where can I get more advice on What Happens If You Don’t Pay Council Tax? and other debt solutions?

To discuss your options and get the support you need to deal with your debt today, contact us now on 0800 0431 431 or click the button to get started

Maxine McCreadie

Maxine is an experienced writer, specialising in personal insolvency. With a wealth of experience in the finance industry, she has written extensively on the subject of Individual Voluntary Arrangements, Protected Trust Deed’s, and various other debt solutions.

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HISTORY

Our debt experts, and insolvency practitioners continually monitor the personal finance and debt industry, and we update our articles when new information becomes available.

Current Version

August 9 2022

Written by
Maxine McCreadie

Edited by
Maxine McCreadie