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Council tax has become something of a financial burden for many households, especially after bills across the majority of England increased by almost 6% in April.

As a ‘priority debt’, there can be serious consequences if you can’t pay your arrears on council tax.

Failure to pay your council tax can have consequences including fines, court summons or even being made bankrupt.

It’s no surprise then that a report from the Resolution Foundation earlier this year urged the government to scrap ‘outdated and regressive’ council tax and replace it with a more progressive alternative tax on property.

If you fall behind with your council tax it’s important to contact the council and try to make arrangements to clear your arrears. It is also helpful to obtain professional financial advice at the same time.

Together, you can agree on a plan of regular payments that you can afford, either at a reduced rate or over a longer period of the year (12 months instead of 10).

How is council tax paid?

Each March you are sent an annual bill explaining how much you need to pay.

Council tax bills usually show the payments over a 10 month period but you can spread the payment plan across 12 months and your local authority must let you pay over 12 months if you ask.

If your council tax bill was sent out later because you’ve moved house, you’ll have a shorter time to pay it and the bill will have to be paid off in full before the end of the following March.

How much you pay will depend on which band you’re in; council tax is charged in bands based on the value of your house in 1991.

More expensive houses are in a higher band and pay a higher annual council tax bill. Band A is the cheapest and band H or I is the most expensive. Your brand will be shown on your council tax bill.

If you think your house has been put in the wrong band, you can ask for it to be reassessed. Thousands did just that last year and were successful but be aware that there is always the slim chance that the band could go up.

Can I reduce my council tax bill?

There are some ways to reduce your council tax bill and in certain circumstances you may qualify for council tax relief.

If you live alone, you are entitled to a 25% single person discount. You may also qualify if you live with a full-time student, apprentice or someone who is ‘severely mentally impaired’.

If you’re on a low income, you may qualify for council tax reduction based on how much you earn, although each local authority has different rules for who qualifies.

If you’re above pension age, you qualify for extra council tax reduction.

If someone in your house is disabled and the property has been adapted, you may also qualify to have your council tax reduced by one band.

If your circumstances change at any time during the year, you should tell your local authority so they can send you an updated bill.

What happens if I am in arrears or miss payments?

If you’re more than 14 days late paying a council tax instalment you’ll be sent a reminder letter.

At that point, you have seven days to pay the outstanding amount and you’ll be able to continue paying your council tax in instalments.

However, if you don’t make the payment within seven days, your local authority can ask you to pay the whole council tax for the rest of the year.

At that stage, you have another seven days to pay the whole amount, then the local authority can take you to court.

At the hearing, a magistrate will issue a liability order. This order gives the local authority permission to take further action to collect the unpaid council tax.

Once a liability order has been issued, your local authority has several options to collect the unpaid council tax. The most common ways are using bailiffs or taking payments straight from your wages using an attachment of earnings.

It is also possible for your council to apply to take money from benefits such as:

• Employment and Support Allowance
• Income Support
• Jobseeker’s Allowance
• Pension Credit
• Universal Credit

In rare cases, they may secure the debt to your home using a charging order if you owe more than £1,000 or make you bankrupt if you owe more than £5,000 in England (£750 in Northern Ireland).

In extremely rare instances, they may send you to prison for three months. However, this is only a last resort when someone is steadfastly refusing to pay their council tax. The local authority can’t send you to prison if any of the other methods above could be used instead.

You can attend the court hearing and tell the magistrate if a mistake has been made, or if your council tax has been paid in full before the hearing date, which would prevent any of the above options being taken.

Can I complain if I think my council tax bill is wrong?

If you believe there are issues with your council tax bill, you should contact your local authority. You can make a complaint if you think you’ve been treated unfairly or your bill is wrong.

You must give your local authority eight weeks to reply to your complaint. If you’re not happy with their reply, you can contact the Ombudsman who can give you more help and investigate your complaint.

• In England – Local Government Ombudsman
• In Wales – Public Service Ombudsman for Wales
• In Scotland – Scottish Public Service Ombudsman

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