Council Tax

Types of Debts
Council Tax

Council Tax

Council Tax/Rates Debt

Council Tax/Rates is a bill that should always be considered a 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.


In this guide, we’ll explore Council Tax/Rates and what you need to know about it, from what is and what it pays for, to what happens if you fall into Council Tax/Rates arrears and where you can get debt advice.

What is Council Tax/Rates?

Council Tax/Rates is a fee you pay to your local authority every year. Your Council Tax/Rates bill is usually taken over the course of the year, in either ten or twelve payments depending on your payment arrangement.

Your money helps the local authority pay for local services like education, leisure, and transport.

How much Council Tax/Rates you pay is dependent on the valuation or ‘band’ of your house. Tax bands range from A-H in the UK or LPS Rating in NI, 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/Rates reduction.

Councils and LPS have extra-legal powers, meaning they can apply to collect unpaid Council Tax/Rates from your wages or salary – and in some cases, you can go to jail for non-payment.

If you fall behind with your payments, it’s vital you contact your Council/LPS right away to clear your arrears.

Who is liable to pay Council Tax/Rates?

All homeowners are due to pay Council Tax/rates.

BTL/Investment Properties

In the UK it is the tenant’s responsibility to maintain these payments and if the tenant leaves it is the owners responsibility.

In NI it is the owners responsibility to ensure these payments are maintained at all times.

Do I have to pay Council Tax/Rates?

Yes. 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/Rates 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/Rates band is too low, and you get asked to pay more!

In certain situations, some properties may be exempt from Council Tax/Rates, 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

How is Council Tax/Rates paid, and when do I pay it?

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/Rates over 12 months you will not receive the two month break, but your installments will be less each month.

People usually pay their Council Tax/Rates through Direct Debit or standing order. However, you can also pay over the phone, by bank transfer or by cheque.

Can I get a Council Tax/Rates reduction?

If you don’t fall into any of the exempt categories, you may be able to apply for a Council Tax/Rates reduction. This is normally available to those who live with someone who is exempt from Council Tax/Rates, as well as those who live alone, claim benefits, are on a low income or are in severe financial hardship.

You may qualify for a reduction in Council Tax/Rates payment if you are on the following benefits:

  • Jobseekers Allowance
  • Income Support
  • Pension Credit
  • Employment and Support Allowance
  • Universal Credit

Even if you’re not on any of the qualifying benefits, you can still apply for a Council Tax/Rates deduction in certain scenarios, including if you’re a student, if you have a disability (or someone you live with does), or you suffer from a severe mental impairment.

To find out whether you qualify for a Council Tax/Rates deduction, check the Government website here.

What happens if I fall into Council Tax/Rates arrears?

Most people choose to pay their Council Tax/Rates 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 instalment.

If you don’t pay within this time, you will be asked to pay all outstanding Council Tax/Rates 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 the unpaid Tax from your wages. If you’re receiving benefits, the council may also deduct unpaid Council Tax/Rates from these.

Councils may also instruct bailiffs to seize your possessions to recover unpaid Tax (remember, if they are visiting for the first time, you don’t have to let them in).

Can you go to jail for Council Tax/Rates arrears?

In the worst cases, non-payment of Council Tax/Rates 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/Rates and you refuse to pay it.

Council Tax/Rates liability order

If you fall into Council Tax/Rates arrears, your local authority can also apply for a liability order – which will add an additional £40 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 do you stay out of Council Tax/Rates debt?

Falling into debt with your Council Tax/Rates 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.

Make a budget

The key to keeping on top of your Council Tax/Rates 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.

Make sure everyone covers their Council Tax/Rates payments

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.

Talk to your local council

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 instalments.

Where can I get debt advice and more information about Council Tax/Rates?

For people living with money problems, paying Council Tax/Rates can be a real challenge, particularly since it’s a priority debt. Failing to repay can come with serious consequences.

If you’re struggling with Council Tax/Rates debt and need debt help, contact Get Help with Debt for a confidential chat, to check if you qualify for debt help.

Our friendly team of advisers are debt experts. They can start to work through your debt problems as soon as you contact us and are trained to give you the best advice for your situation. Contact us on 02895 380906.

Our Work

We work closely with several local debt charities including adviceni.com and ruralsupport.org.uk providing training and support. Linda Wilson, our Voluntary Sector Services Manager works closely to ensure that our services are accessible to those most in need.

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