March 12, 2012 2.18 pm This story is over 144 months old

The perils of missing council tax payments

Council Tax: With the worst case scenario being prison, Sue Phillips explores the consequences of not paying the bill, how to solve the problem and who is entitled to discounts.

— Sue Phillips from the Citizens Advice Bureau in Lincoln is bringing a four-part series on personal finances for The Lincolnite. This week, with a slight increase in council tax coming next month, she looks at the importance of making regular payments.

If you are having difficulty paying your bills, you might consider ignoring your council tax bill, under the misconception that it is the least of your financial worries.

This is not the case, it is a priority debt, meaning the consequences of not paying can mean legal action through the Magistrate’s Court.

The council can apply to the local magistrates’ court for a liability order, for the full amount owed, plus any court costs.

The court will send you a summons setting out what the council says you owe with the date and time of the hearing. If this happens do not ignore it.

Contact the council and try to make an agreement to pay the debt off before the hearing. The council may be prepared to cancel the court summons, or waive the court costs. You must stick to the terms of the agreement or you will shortly find yourself in the same position.

If a liability order is made, the council can collect the arrears in a number of ways, including:

  • Requesting that deductions are made from your wages or benefit.
  • Bailiffs seizing your belongings (and you will also be liable to pay the bailiff’s costs).
  • Making you bankrupt (if you owe in excess of £750), and very rarely,
  • By applying for a charging order (if you owe £1000 or more). If granted, this means that if you sell your property, you must pay the council any money you owe them out of the proceeds.

As a last resort, the council can apply for a committal warrant to send you to prison. This will only happen if the council strongly believes that you have the money but are refusing to pay.

You will be sent a committal summons and must attend the court hearing, otherwise you risk being arrested.

Solving the problem and who’s eligible for discount

Work out what you can afford by preparing your own detailed budget sheet. Then contact your local council and negotiate an affordable payment plan with them. You usually pay your annual council tax bill in 10 monthly installments, but it may be possible to make weekly or fortnightly payments.

Check if you are entitled to a reduction or discount. If you are an adult living on your own, you are entitled to receive a 25% Single Person discount.

Student nurses and full-time students at college or university do not pay council tax, so your bill will be reduced if you live with any of them.

You may also get a discount if you are disabled or live with someone who is disabled. You can find full details of council tax deductions and exemptions, by referring to the Directgov website, under the heading Home and Community.

You may be able to claim council tax benefit if you are on a low-income, and, or Second Adult Rebate if you live with another adult (not your partner) who is on a low-income and does not pay rent.

If you are entitled to Income Support, Income-based Job Seeker’s Allowance or the ‘guarantee’ element of Pension Credit, you may get council tax benefit in full. This needs to be checked with your local council.

If you find you cannot pay a monthly installment of council tax, act immediately! Contact the council and let them know. You may well save yourself a lot of hassle or even discover, depending on your circumstances, that you are actually entitled to a discount.

— Next week: Sue Phillips looks at prioritising debts. If you have any further questions about this article or personal finance you can get in touch with The Lincolnite via email.

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Sue Phillips works at the Citizens Advice Bureau in Lincoln.