Can Council Tax Debt be Written Off – What You Need to Know!

Can Council Tax Debt be Written Off

In the post Covid-19 world and with inflation currently running rampant at over 10% (food inflation is even higher at almost 20%) an increasing number of people are beginning to struggle to pay their monthly bills. With many councils increasing rates by 5% this year, it is anticipated that there will be an increase in the number of people in council tax arrears. But can council tax debt be written off? Here’s what you need to know

What is Council Tax?

Council tax is a type of tax levied by the local authorities in England, Wales, and Scotland. It is a tax on domestic property and is used to fund local services such as rubbish collection, road maintenance, and the police force. The amount of council tax payment is based on the value of the property and the number of people living in it.

The tax was introduced in 1993 under the Local Government Finance Act, which also set out the rules for calculating and collecting the tax. Failure to pay the outstanding tax can result in legal enforcement action being taken against the individual, including the issuing of a final notice and potentially court proceedings which could mean you incur additional court costs.

It is important to ensure that council tax payments are made on time to avoid any potential consequences

Understanding Council Tax Debts

Council tax is an essential payment that you make to your local council on a monthly or annual basis. It is important to keep up with the agreed payment plan, as missing payments or falling behind could result in council tax arrears.

If you do find yourself in arrears, the council will likely send you reminders and a final notice before taking legal action to recover the debt. If the debt remains unpaid, the local authority may apply for a council tax liability order through a magistrates’ court to enforce payment.

Continued failure to pay council tax could then result in further enforcement action being taken, including the involvement of council tax bailiffs. It is crucial to make the payments on time to avoid falling into arrears and facing potential consequences.

Can You Have Unpaid Council Tax Debt Written Off?

Can Council Tax Debt be Written Off

Council tax arrears cannot be written off in the same way as other debts such as credit card debt or personal loans. However, there are some circumstances in which council tax debts may be reduced or written off entirely. These include:


If you declare bankruptcy, your outstanding council tax bills will be included in your bankruptcy order and may be written off. However, it’s important to note that bankruptcy should be seen as a last resort and can have serious consequences, including damage to your credit rating and potential loss of assets.

Debt Relief Orders (DROs)

If you meet the criteria for a DRO your council debt may be included and written off after a year. To be eligible for a DRO, you need to have unsecured debts that total less than £30,000, have a vehicle or other significant assets worth no more than £2,000 and a disposable income of less than £75 per month after accounting for household expenditure.

Debt Relief Orders can be proposed through the debt charity Step Change or through contacting your local Citizens Advice Bureau.

Council Tax Reduction

This is another avenue for reducing or even writing off council tax debt. If you are eligible for council tax reduction, your council tax bill may be reduced or even written off entirely. The eligibility criteria for a reduction in your council tax can vary depending on your circumstances, such as your income, age, and whether you have any disabilities or dependents.

Please check your local council’s website to for eligibility criteria.

Individual Voluntary Arrangements (IVAs)

An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors to pay off your debts over a set period of time. If your IVA is accepted, your council tax debt may be included, and you may be able to write off a portion of the debt. However, it’s important to note that an IVA can have a significant impact on your credit rating, and it’s important to seek professional advice before proceeding with this option.

It’s worth noting that these options may not be available to everyone and should only be considered after seeking advice from a debt advisor.

Paying Council Tax Debt

If you have outstanding council tax it’s crucial to act fast to prevent further consequences. Here are some practical steps you can take to clear your overdue council tax:

Talk to your local council: If you’re struggling to pay your council tax bill, consider contacting your council to see if they can work out a payment plan that suits your current financial situation.

Get advice on unmanageable debts: If you are struggling to maintain payments to the council or any of your other creditors, you should seek advice from a debt advice company or an insolvency practice on the best way forward. Here at Become Debt Free, our team of experts can provide advice on whether an IVA is right for you or whether an alternative debt solution is the best way forward.

Pay off priority debts first: Council tax is a priority debt. This means you should try to pay it off before other debts like credit card debt or personal loans as the consequences for not doing so can be more severe.

It’s crucial to remember that neglecting council tax arrears can have to serious repercussions such as bailiffs being sent to recover the debt or even imprisonment. Thus, it’s vital to take action to resolve the issue as soon as possible.


In conclusion, council tax debts cannot be written off in the same way as other debts, but there are several options available to reduce or even write off the debt entirely.

An IVA is one of these options that may be considered. If you’re struggling with council tax debt, contact us here at Become Debt Free and speak with one of our professional advisors and we can help you look at viable solutions to your needs. call us today on 0113 237 9500.

Remember, council tax is a debt that you should prioritise paying off before other unsecured debts.

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Customers can get free debt advice from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt. For more information from the Money Advice Service visit MAS is part of the Money & Pensions Service. We are not affiliated with MAS in any way.

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Become Debt Free specialise in providing and administering Individual Voluntary Arrangement (“IVA”) solutions to individuals based in England, Wales and Northern Ireland.  We do not administer Debt Management Plans, Debt Relief Orders, or any other debt solutions.  We only provide advice after completing or receiving an initial fact find where the individual(s) concerned meets the criteria for an IVA, therefore, all advice is given in reasonable contemplation of an insolvency appointment.

* To qualify for debt write off in an IVA with us, you must have a minimum of £7,000 of qualifying unsecured debt owed to two or more creditors.  The amount of debt write off is based on your own personal circumstances – typically this could be up to 85% of what you owe; and this has been achieved by over 10% of our customers who have successfully completed their IVA’s in the last 12 months.  The amount of debt write off differs for each customer and is dependent upon their individual financial circumstances and subject to the approval of their creditors.

Andrew Bowers is authorised in the UK to act as Insolvency Practitioner by the Insolvency Practitioners Association.


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