Menu Close

Dealing with a Council Tax Liability Order

Council Tax

As a taxpayer, there are many kinds of taxes that you have to keep up with, and not doing so can bring negative consequences on your reputation. So, you must always try to stay clear of any arrears in them. However, that is not always in your hands. There are many kinds of situations where you are understandably unable to pay your taxes. But, you have to clear taxes like council tax in any case, even if it takes some time. As a result, you might feel helpless. 

However, you need not worry as there are still some ways out of this situation. Before moving on to that, there is some essential information on the council tax liability order that you need to pay attention to it at first.

Are you Liable to Pay?

First, you must know whether council tax applies to you; only then will you be able to take measures to deal with them. It must be noted here that it is a very important source of revenue for the local administration. All your nearby services provided by the government are funded by it. And, it goes to paying for the maintenance and salaries. That’s why you must give it utmost importance. In case of any arrears, you have to give more priority to clear it as compared to other debts.

As for the minimum age requirement, you have to be at least 18 years old. Nobody below that age has to pay anything. In addition to that, you have to own a home or live as a tenant. If you fulfill both these conditions, you’ll have to pay a tax to your local council annually.

How much do you have to pay?

Not all people have the same financial condition. After all, it is something that keeps changing even for one person with time. Also, the value of everyone’s home is obviously not the same as well. So, if you’re wondering, the amount you’re liable for is not a fixed one; you can be charged higher or lower as compared to your neighbors. 

This tax is mainly concerned with the property you live in. So, it is the value of our home that mainly determines how much you’ll have to pay. The higher the value, the more you’ll be taxed. Also, you must keep in mind that this tax is applicable for residential properties only.

Now, the amount to be paid by each person is divided into multiple bands. Each of them consists of a different range of values, and you have to pay the amount that is fixed for the band that you fall in. Also, like other taxes, this one too may keep rising and falling.

How do you make the payments?

Even though it is an annual tax, it doesn’t mean you pay it all at once. You can pay it in installments throughout the year. After all, that’s an easier and more comfortable way for you. This is the method that people generally use. However, try not to miss a single payment. Otherwise, they’ll ask you for an entire years’ payment.

What happens when you have arrears in payment?

As we have seen, you have to keep up with the installments; otherwise, you’ll be facing the trouble that is being mentioned. Your local council might consider if you convince them and inform them about your financial problems. They will even reach out to you and discuss the payment before they decide to take any action. So, it’s not that you won’t get a chance.

Now, if you don’t utilize that, the council will take you to court. As you know by now, it’s a very important debt that they must recover. Therefore, the court will pass a council tax liability order against you. This will open up many options for them as to how they recover the money. So, it is best to avoid this situation in the first place. However, once you have fallen into it, you have to remain calm and look for a way out.

How will the court proceed with your case in that situation?

Once they have passed a council tax liability order, it is time for them to decide how to recover the amount. Luckily, they can’t do just anything about it on their whims. They have to assess the situation of the individual taxpayer and take the rightful action in their case. This is to ensure that you don’t face hardships due to the recovery. So, you can be assured that they won’t leave you in a situation where you cannot take care of your basic needs. However, they will take away something after all.

Now, they will ask for some information to determine what action should be taken against you. This includes your earnings and expenditure at the foremost. Apart from that, you also have to let them know where you work. Do you have any other sources of income? This can include various benefits that you get from the government. You have to inform the court about that as well. Not only that, but they would also want to know whether you owe any other person or institution.

What actions will you have to face?

Once you’ve given all the essential details to them, they’ll decide on what action they should take. Under the current rules, they have various options that are suitable for the different types of cases. You’ll have to face either of the following actions:-

  • Your goods will be seized

This is always the first action they would consider taking against you. All people have some personal belongings; they can be taken away and auctioned off to raise the money owed. That’s precisely what they’ll do in your case. To enforce the council tax liability order, they use enforcement agents. 

These people have special powers and are authorized to take control of your goods. To stop that from happening, you can discuss with them and make a payment plan. There is still a chance for you to do that before they proceed with the enforcement action.

However, it must be pointed out that they don’t sell the goods right away. If you succeed in making the payment soon enough, you can still get them back.

  • The money would be withdrawn from your savings

Refused to let the enforcement agents enter your home? You have the right to do that, after all. However, you must not think they would just give up after this. With a council tax liability order, they can also take the money you owe from your savings account. They’ll do this only when they can’t reach you. 

Also, they would have to make sure that you don’t face trouble paying for your necessities after this action. There should be sufficient money left in your account for that; otherwise, they can’t take this measure.

  • They will deduct it from your income

As we have seen, they will ask for your financial details such as earnings and employer. If any of the previous steps don’t work, they’ll look up your various sources of income, be it a job or benefits. If they find that withdrawing money from these won’t affect your condition, they’ll go with it. That’ll be done before you receive the payment. 

They’ll keep doing this with subsequent incomes as long as your arrears are not cleared. They’ll do this only after informing you, of course, just like in the case of all other actions.

  • Take control of your property

The court might not find the other actions suitable to enforce the council tax liability order in your case. In that situation, they still have alternatives to choose from, and one of them is taking control of your property. In this case, you will stand to lose your home. That’s why it’s important to avoid falling into arrears in the first place.

  • They’ll file you for bankruptcy

This option is available to them only if you have to pay over a certain amount, provided that you fulfill the conditions, they’ll take this dreaded measure. As you probably know, this can drastically change your life for the worse. You’ll be facing its effects for quite a long time. However, rather than being too worried about it, you must see it as a motivation to get rid of the arrears. You can be saved from it even if you show some commitment to clear your debt.

Can you get imprisoned?

You might wonder if a council tax liability order can get you imprisoned. Now, there are different laws regarding that in different countries of the UK. Out of them, only in England is it a punishable offense, with imprisonment, and that too if you have deliberately refused to pay. That’s a very rare case, from what it seems.

What should you do when you have financial problems?

Due to the Coronavirus pandemic, millions of people are facing the same situation as you. As a result, such cases are handled in a considerate manner by the authorities. To buy some time, you have to just explain your situation completely and in detail to them. However, you can’t just have it cleared off, and you have to pay it in full at some point. Thus, consult a debt adviser, if necessary.