Council tax is a bill that should always be considered high priority. Local authorities have rights that private companies don’t when it comes to debt collection, which means falling behind can have serious consequences.
How much council tax you pay is dependent on the valuation or ‘band’ of your house. Tax bands range from A-H, and the more expensive your house is, the higher the tax band. If you are of pension age or on a low income you may be able to apply for a council tax reduction.
Councils have extra-legal powers, meaning they can apply to collect unpaid council tax from your wages or salary – and in some cases, you can go to jail for non-payment.
If you do happen to fall behind with your payments, it’s vital you contact your council right away to clear your arrears.
How is council tax paid and what months do you have to pay?
Generally, payments are spread over ten months, giving you a two-month break in February and March before your new bill comes in for the following year. However, if you choose to pay your council tax over 12 months you will not receive the tax break, but your installments will be less each month.
People usually pay their council tax through Direct Debit or standing order. However, you can also pay over the phone, by bank transfer or by cheque.
Do I have to pay council tax and what happens if I fall into arrears?
The long and short of it is: yes, you do need to pay your council tax. However, there are a few exceptions, and you may be entitled to a reduction in how much you have to pay.
As stated previously, your council tax is charged based on the value of your home, so if you think you’re being charged for the wrong band, you can ask for it to be reassessed. However, while this could result in you paying less, it could also be found that your council tax band is too low, and you get asked to pay more!
In certain situations, some properties may be exempt from council tax, including if:
- The property is empty due to a death
- All residents are full-time students
- The property is owned by a charity
- All residents are under 18
- It’s a self-contained flat where a dependent lives
- Any residents have severe mental impairments
- The property is empty as the occupier is being cared for elsewhere
If you don’t fall into any of the exempt categories, you may be able to apply for a discount. This is normally available to those who live with someone who is exempt from council tax, as well as those who live alone, claim benefits, are on a low income or are in severe financial hardship.
Most people choose to pay their council tax monthly, so if you miss a payment, the local authority will send you a reminder. This will give you seven days to pay the missing installment.
If you don’t pay within this time, you will be asked to pay all outstanding council tax debt within a further seven days. If you miss this payment, they may take legal action against you.
At this stage they have the power to collect unpaid tax from your wages. If you’re receiving benefits, the council may also deduct unpaid council tax from these.
Councils may also instruct bailiffs to seize your possessions to recover unpaid tax. (But remember, if they are visiting for the first time, you don’t have to let them in.)
In the worst cases, non-payment of council tax debts can lead to a prison sentence. You could be sent to jail for up to three months if the court decides you don’t have a good reason not to pay your council tax and you refuse to pay it.
If you fall into council tax arrears your local authority can also apply for a liability order – which will add an additional £40 on to your total bill and you will be summoned to appear before the magistrate’s court. You don’t have to attend but it’s an opportunity for you to explain the circumstances surrounding why you are unable to pay.
How to keep on top of council tax debt
Falling into debt with your council tax is actually an easy mistake to make. Moving homes or misplaced post can mean not receiving your final bill, which in turn can mean you end up paying the wrong amount.
The key to keeping on top of your council tax is to make sure you budget for it each month. Your payments will be a fixed amount, so set it aside to guaranteed it always gets paid.
If you share the bill with other residents of the property, make sure they’ve also paid their share before the payment is due to make sure that you’re not left short.
If you are unable to pay the arrears by the end of the year you need to realistically work out what you can afford and contact your local authority. You can ask to spread the cost over 12 months rather than the usual ten, either in weekly or monthly installments.
If you’re struggling with council tax debt and need debt help, call us now for a confidential chat or complete the form on our page. We can start to work through your debt problems as soon as you contact us. Our advisors are trained to give you the best advice for your situation.