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How to Clear Council Tax Arrears & How long do they Last?

council tax

For UK residents, a council tax is levied on anyone who owns or has rented any residential property. It is one of the main sources of revenue at the local level. Stranding council taxes are classified as a priority debt, which means legal action will be taken against you if you don’t pay it. 

The authority of collecting this amount rests with your local council. Failing or refusing to pay can lead you to face legal action. If you’re having trouble clearing your council tax debts, it might be a stressful situation for you. But fortunately, there are certain ways through which you can clear them. But first, you must know how a council tax works and council tax arrears how far back.

On What Basis is Council Tax Levied?

The Council Tax is collected in England, Scotland, and Wales. Your income and the value of your property determines the amount you have to pay every year. The values are divided into bands that are coded from A to H in England and Scotland. Wales has an additional band coded as I. The value of the band differs in these three countries.

For example, in England, band B consists of £40,001 to £52,000, while in Scotland it is £27,001 to £35,000. The tax levied on each of these bands might differ from one country to another, as well. For example, in Wales, you have to pay 131% for a band E property, whereas in Wales, the rate is 122%.

Do to pay Council Tax?

Everybody who is above 18 years of age and is an owner or tenant of a house has to pay the council tax. The tax you have to pay depends on the people who live in your home or whether anybody lives in your home at all. 

If you live alone, you’ll be charged 75% of the assigned bill amount. The same rate is also applicable when you’re the only adult in the house. If your home is vacant, you would still have to pay, but it is 50% of the bill. A full bill would be charged when you’re living with a spouse/ partner. Thus, you must have an idea about council tax arrears how far back.

Are You Exempted from Paying Council Tax?

Even though every owner and tenant has to pay the council tax, you can get exempted, if you fulfil certain conditions. Following are the criteria which can get you exempted from paying council tax:

  • You’re a Full-Time Student

If you’re studying full time, then you will be exempted from paying council tax. If there’s someone living with you, who’s not a student, you can still get a discount. But, first, you have to fulfil some conditions to be recognized by the authorities as a full-time student.

  • If a Person is Mentally Ill

The authorities don’t count people with mental illness as liable for council tax. So, get an idea about council tax arrears how far back. Also, you’ll be exempted, if you’re living with such a person as a caretaker. However, that person must not be your child, spouse, or partner.

How do I get a Discount on my Council Tax?

If you want to reduce your council tax, you need a good reason to get an exemption. Everyone can’t apply for a discount on their service taxes. You have to understand that the authorities will reduce the tax only when it’s necessary and also get to know about council tax arrears how far back. This is mainly because council taxes alone contribute a significant amount for local services such as education, hospitals, police, etc. 

Following are the conditions at which you’ll get a reduced council tax bill:

  • You are Unemployed or have a Low Income

Having a low income or being unemployed would make it difficult for you to pay the council tax. So, in such cases, you can apply for a reduction in it, to the local council. Also, your savings must amount below £16,000 for this.

  • You Live by Yourself

According to the rules, you can get a reduction of up to 25% in your council tax bills, if you’re living alone. You can also avail this discount if you’re living with a mentally impaired person or a full-time student.

  • If there’s a Disabled Person in your House

In case, you have a disabled person in your house, you will get a discount on your council tax. Though there are some conditions for this. Firstly, you must have an additional room for the disabled person. Second, you must have made some modifications to the house, for using a wheelchair.

What if You are Unable to Pay the Council Tax?

You might often face a situation where you can’t pay your arrears. In fact, this problem is faced by many people in places where this tax is applicable. So, there’s no need to be stressed out, just get to know council tax arrears how far back.

In this type of situation, people often make the mistake of ignoring it or waste time in overthinking. You must steer clear such mistakes, as they will get you in serious trouble. If you don’t pay the bills, the authorities can take legal action against you. So, if you’re going through a difficult financial situation, you must inform the council. They can be more helpful than some people might think. All you have to do is convince them to give you some time to clear your arrears. 

Show them proof of your earnings and expenditures for this purpose. You can also make payment arrangements to clear the arrears within a certain period of time. This would help to relieve a lot of stress from your life, being much easier on your pockets.

What are the Consequences of Missing a Payment?

After you get your council tax bill, you’ll get a time of 14 days to make the payment. If you’re unable to make the payment within that time, the council sends you a reminder. This is only to remind you about your due payment and doesn’t contain any threat of legal action. 

It gives you a time of 7 days to clear the instalments. If you pay the bill within the given time, it will continue working like it used to. But, if you fail to do so, the council might demand a year’s payment from you. 

Now, this would be more stressful, if you’re facing a financial problem. So, the best option you have is to make a payment arrangement with the council. If you fail to pay even after the last reminder, there will be a liability order against you, in the case of England and Wales residents. 

According to this, the local authority has the right to take the necessary actions, to recover the debt. If you’re a resident of Scotland, there will be a summary warrant against you. In addition to that, the debt you owe would be increased by 10%.

What Legal Actions You have to Face?

After the liability order or summary warrant is passed, all legal methods of recovering the debt get a nod for the local council. Though they can’t use any of the methods whenever they want. There is a fixed order in which they have to take every step. They can only go to the next level when the previous one has failed. So, you can be assured that they are not going to take any harsh steps at the very beginning.

In the case of England and Wales, you’ll face the following actions:

  • A Visit from an Enforcement Agent

The very first step they generally take is to send an enforcement agent to your property. This agent requests you to clear the arrears. If you refuse or you are unable to pay, these agents can seize a certain portion of your belongings, that is worth equal to the debt you owe. The debt would be recovered by selling these goods. 

In case, your arrears are not cleared even after the sale, you’ll have to pay the rest of the amount anyhow.

  • Direct Recovery from your Earnings and Benefits

They take this step only in case you don’t agree to make the payment in person. But, they can take this step, only after they get the attached earnings order from the court. This authorizes them to take a fixed part of your income, from your employer, through the court. In addition to that, they can also recover the money from your job benefits or allowances, if you have any. Though they’ll inform you before taking this step.

  • Charging Order

This is a method that is not as common as the previous ones. When the court issues a charging order, the council can secure the debt against your home. Now, what does that mean? It signifies that if you sell your domestic property, before settling your debt, you’ll have to contribute the money to clear your arrears first. Whatever amount is left would be rightfully yours.

  • Bankruptcy Petition

If any of the previous steps don’t work, the council can file a bankruptcy petition against you. Even though it means all your arrears will be written off, it would come at a high price. Your credit score would face huge damage, and then a negative implication on your reputation for being bankrupt.

  • Imprisonment

In England, refusing to pay council taxes is punishable by three months of imprisonment. Though the court can sentence you to prison, only if you have expressly refused to pay your debt. If you haven’t been able to pay due to financial problems, you don’t have to worry, there are no terms for imprisonment.

If you’re a Scotland resident, things would work almost the same. There’s a slight difference from the proceedings in England and Wales. In addition to your earnings, the authorities can recover the amount from your bank account as well. 

If these are not possible, the authorities will take over some of your belongings by sending sheriff officers. If none of these measures can be applied, the court will pass a sequestration order, which is equivalent to bankruptcy. Not paying council tax isn’t punishable by imprisonment, in England and Wales.

Can the Enforcement Officer Forcefully Enter Your Residence?

The officers visiting your home are authorized to take over some of your goods/belongings. But, they simply don’t have the right to use any force to enter your home under any circumstance. Moreover, they can’t visit you at any time of the day. You’ll be notified prior to their visit, as well.  If they use any kind of unreasonable force, you can lodge a complaint against them, in the court.

Can the Council Write Off my Debt?

The council will write off the debt only when they’re convinced that you can’t pay it. They will file a bankruptcy or sequestration petition against you if they can’t recover the debt any other way. You also have the option to apply for a debt relief order, in case you reside in England or Wales. In both cases, your debt will be written off. An IVA can also help you clear your arrears by fair means.

You Can include Council Tax Debt in IVA

If you have an IVA, you can include your council tax debt in it. It would be a great option and a way to clear your arrears. Since it is a formal agreement, the terms would be protected by law. An IVA also offers many other benefits and has its own share of risks, as well. So, you must go for it only after carefully considering various aspects.

How long are Council Tax Arrears Chase?

Get to know council tax arrears how far back. The local council can chase your debt arrears for 6 years. Though it doesn’t generally take them that long to do so. They would have taken action against you by that time. Also, even though the time limit is 6 years, in practice the council can chase an arrear for as long as required. So, if you have council tax arrears, it is time to get on with clearing it by legitimate means.