Council Tax Debt

One of the most important debts which you should try to pay off as soon as possible and always on time is the Council Tax debt. This debt is considered a high priority one, due to the power the local authorities have in regards to debt collection.

The local government has more power and more legal rights than a private company or an individual when it comes to collecting the debt. They can access your bank account and retrieve money from your salary, confiscate assets or even send you an arrest order if you fail to pay your dues.

But how much exactly are you going to pay for your Council Tax?

It all depends on the value of your property and assets as valuated in 1991. Of course, your tax will be higher if your private property is of a higher value. On the other hand, people with lower wages or the elderly can receive a waiver or a tax reduction if they meet the criteria and have the documentation required by the local authorities.

Notice that in case you are unable to pay your council tax or are falling behind in your payment for some reason it is important to get in touch with the local office and ask for a possible time extension, waiver, reduction or a smaller installment arrangement.

When and how is the Council tax paid?

There are two options when it comes to paying the Council Tax. Either you choose to pay it in 12 monthly installments or 10 installments skipping and get a two-months break. In the first option, your payment will be smaller and probably more affordable but in the second option, you get to take a short break before the new bill comes in. This is usually in February and March. You can choose to pay the tax through a direct debit or standing order, or you can even decide to pay over the phone, by bank transfer or by cheque.

Is the Council tax Mandatory? And what happens if you fall behind with your payments?

As already mentioned the Council tax is mandatory and a high priority one. However, there are some legal aspects you can capitalize on to get waivers or reductions to your annual tax debt.

First of all, because the Council tax depends on the value of your house, you can always as for a second valuation which might help you reduce the amount you are paying. Keep in mind also that there are situations where your property will not be considered for taxing at all.

Some of those cases are:

If the owner has passed away or the owner and the property is empty

If the individuals living in the property are students or are young people under 18

The property is owned by a charity

Any residents have severe mental impairments

Don’t lose hope. If you cannot get a tax waiver because you are not in any of the categories above you can still try to reduce the total tax amount. If for example, you live with a family member that belongs to one of the categories above, if you live alone or you are facing financial difficulties you can visit the office in your city council and ask for any documentation needed to get a reduction.

Whether you will pay the tax amount in 10 or 12 installments the local authorities will send you a reminder and you will have approximately 7 days to deposit the payment. If you, however, fail to do so one more reminder will be given to you and the next step the local authorities will take is to proceed with legal action against you.

In any case, they might also deduce the amount from your wage or the benefits you are receiving confiscate your assets or even ask to arrest you. The sentence can lead up to three months of imprisonment if you are unable to justify the fact that you didn’t pay.

If you fail to pay the council tax the local authorities might bring you in the Magistrate’s court, where you are going to get the opportunity to explain your situation and the fact that you didn’t pay the specific bill. Although this might be helpful to some point, note that you will have to pay an extra £40 in your total bill.

How to make sure you are going to pay the Council tax:

Although you might think this is something that will not happen to you, you might be wrong. What happens frequently is that people change address, property or location and miss the Council tax bill or end up paying more than they should due to a wrong valuation of their property.

You can ensure that the payment of the tax is made smoothly if you add this expense in your annual and monthly budget. The installments of the bill are a fixed amount which helps you prepare in advance and even share the cost with other residents in your property. Just make sure to collect the amount from all the tenants before the payment deadline.

It is important though to be ready in case you find out that by the end of the year you are unable to pay the bills. First, make sure to contact your local authorities and ask to spread the installments in 12 instead of 10. Make sure to reevaluate the amount you are paying and see if you can get a reduction or even a waiver.

In any case, you can contact one of our advisors and we will help you work out the debt challenges, find ways to reduce your debt or help you renegotiate the terms of your bill.

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"Become Debt Free" is a trading name of Re10 (Finance) Ltd (company number 4651137) with offices based in Leeds and London. We 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. Re10 is regulated by the Insolvency Practitioners Association.

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. A debt write off amount of between 25% and 75% is realistic, however the debt write off amount for each customer differs depending upon their individual financial circumstances and is subject to the approval of their creditors.

Andrew Bowers FIPA FABRP is authorised by the Insolvency Practitioners
Association to act as a Licensed Insolvency Practitioner.

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