This blog will answer the question “Can council tax debt be written off?” It will cover the various conditions and their respective processes by which your council tax debt can be written off. It also briefly covers the situations that occur when you don’t pay your debt.

Can council tax debt be written off

Yes, your tax debt can be written off. There are quite a few methods to get so done. You can use an individual voluntary agreement. Your debt can be written off if you have a low income or debt level as stated. All these details are further discussed in the blog. 

When you owe your council

What to expect

If you ignore your council tax arrears and owe a debt to your local council, you can expect the following: 

  • Home visits from any representative of your council
  • Repossession of your goods
  • Removal of goods
  • Enforcement  agents visiting your home with the rights to force entry
  • County  court proceedings

Income deduction

Once legal action has commenced, the council can get money directly deducted from your wages. If you are not employed, money can be taken from other government benefits.

Some of the examples are:

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

What to do

If any one of the above occurs or is a prospective occurrence, you need to repay your council tax debt immediately if you can.

But if you cannot then, 

  • Don’t take the opposite approach. Do not procrastinate or run away from the issue, hoping that it will disappear. 
  • Act quickly so as to be able to restore your right to make monthly instalments.
  • If you can even not do that, then at least show a willingness to the council that you want to pay, and engage with any process that can help you pay the debt later. 

If I cannot pay, or miss my council tax

If you fall behind with your council tax payment your local authority may demand that you make the payment of the full amount of the year at once. To avoid this situation, you should pay back any arrears quickly.

If you don’t pay your council tax, your local authority takes further action to recover the money owed to them. This may involve taking money directly from wages or benefits or getting an order to instruct court-appointed debt collectors.

What happens

If you miss a council tax payment, the councils take the following step in the same order:

  • Send you a reminder letter 14 days after you missed a payment.
  • After the reminder letter, 
    • If you make the payment within seven days of it, you can continue paying your council tax in instalments.
    • If you don’t make the payment within seven days, you can be asked to pay the whole council tax for the rest of the year
      • You get another seven days to pay the whole amount.
      • The council sends you a final notice to pay.
      • If you don’t pay within seven days of the final notice, the local councils may apply for a liability order to be issued so that  the money owed by you can be recovered through court-appointed debt collectors.
      • If that does not work, the councils may send bailiffs to recover their debt through your property.
      • If the bailiff cannot recover enough property to pay the debt, you might be taken to court.
      • The council can issue a court summons for the full balance owed.
      • You need to pay the full amount before the court deadline if you want to avoid going to the court.

Council tax Bailiffs

If you still don’t pay the owed amount, you can get a visit by a bailiff. You receive a 7 days notice and a court order after which the bailiffs arrive. 

Their purpose is to access your property on behalf of the council with the aim of seizing goods, including your vehicles, to pay your debt.

In order to avoid these situations, you can apply for your council tax debt to be written off.

Getting your council tax debt written off

Your council tax bills and debts can be written off by local councils. But there are conditions for if, which usually entail you facing severe hardships. The policies differ by individual councils. It is possible to get your council tax debt written off, although this depends on which council you come under.

If you live in England or Wales, your first option is to get an Individual Voluntary Arrangement.

IVA

An IVA is one of the only two legitimate ways to get your council tax debt be written off. 

An IVA means paying back a percentage of your total debts for a period of 5 years and getting the remainder of your debt completely written off at the end of 5 years.

Therefore, through an IVA, it is completely possible to write off a section of your council tax debt. 

There are certain basic requirements of an IVA to be applicable to you.

Basic requirements for an IVA

These requirements are:

  1. You have a total debt level of £5000 or over, from at least 2 creditors.
  2. You have a regular income of £800 or above.
  3. Your council is on the list of approved councils.

Councils where IVA is accepted

The following council are on the list of approved councils to get your council tax debts be written off: 

  • Bolsover District Council
  • Bolton
  • Brighton & Hove
  • Bristol
  • Bromley
  • Caerphilly
  • Oldham
  • Canterbury
  • Nottingham
  • Newcastle Under Lyme
  • Carmarthenshire
  • Derby
  • Devon
  • East Hampshire
  • East Lindsey
  • Newark & Sherwood
  • Newcastle Under Lyme
  • Hastings
  • Havant
  • Kings Lynn & West Norfolk
  • Kirkless Council (KPMG)
  • Lewes
  • Newport
  • Liverpool
  • Newcastle upon Tyne
  • London Borough of Redbridge
  • Mendip
  • North Kesteven
  • Plymouth
  • Portsmouth
  • Reading
  • Redcar and Cleveland
  • Reigate & Banstead
  • Rochdale Borough Council
  • Rochford
  • Rotherham
  • Rugby Borough Council
  • Rushcliffe
  • South Oxfordshire
  • Stockport
  • Surrey Heath Borough Council
  • Tendring
  • West Lancs Borough Council
  • Wolverhampton
  • North East Lincolnshire
  • Dacorum
  • Rhondda Cynon Taf Council

Despite various conditions, requirements and local variations, there’s a good chance that you may qualify to enter an iva agreement, if you’re struggling with council tax debt.

But you need to apply for your council tax debt to be written off as soon as possible, before bailiffs are appointed and your property is already seized.

DRO

Another method to get your council tax debt written off is through debt solutions that write off council tax. The council tax debts can be written off through bankruptcy or a debt relief order (DRO).

A DRO is a way to have your debts written off if you have a relatively low level of debt and have few assets. It freezes your debt repayments and interest for 12 months. If your financial situation hasn’t changed even at the end of this period then all of the debts included are written off.

Conditions for a DRO to be applicable

You can only get a DRO if you owe less than £30,000 if you live in England or Wales, if you owe less that £20,000 if you live in Northern Ireland.

Section 13A

There is another method to get your council tax debt written off. Local authorities can reduce or write off your council tax debt if you don’t have any money to pay your bills.

  • They can do so under the rule of Section 13A. This section comes into play when your home has been damaged in a flood or fire. It wipes off your bill completely.
  • The amount that can get deducted depends upon your individual circumstances.
  • Some councils offer better help or in an easier way than others.

Making a claim under this provision

  • You have to claim under this rule to get your council tax bill written off.
  • First, you need to fill out a Section 13A application form available from your local council.
  • You have to get in touch with them, or search their website if the form is not in the given name, and ask them what help they have in cases of financial hardship.
  • You need to provide some important documents, such as bank statements or benefit letters, to prove your earnings and savings.

Factors taken into consideration by the councils

Local councils ight take into account the following factors when making their decision about your writing off your council tax debt:

  • Evidence of financial hardship or unforeseen and exceptional circumstances unabling you to pay
  • Pre-existence of a council tax discount.
  • Existence of any other money or assets you can sell to pay your bill
  • Whether you have explored all potential ways of paying your debt
  • Your council tax payment history
  • Whether you are unable to pay or you just don’t want to pay.

Other methods to get council tax debt written off

If you can’t get your council tax debt written off by the above stated means, you can go through the following:

  • 100% council tax discount if you’re on a low income or on benefits, including Universal Credit.
  • 25% council tax discount if you live alone, or you live with one or more dependants.
  • 50% council tax discount if you live with someone who officially doesn’t have to pay council tax, such as a carer, or someone who is severely mentally impaired etc.
  • 100% council tax discount if you live in an all-student household.
  • If any other circumstances are applicable to you making you exempt from paying council tax.

What to do if Council does not help

If you don’t think your council has treated you fairly, to help you with writing off your council tax debt, then you can raise a complaint with the ombudsman services.

The respective services as per your residence are:

  • Local Government Ombudsman In England
  • Public Service Ombudsman for Wales inWales
  • Scottish Public Service Ombudsman in Scotland

Conclusion

This blog answered the question “Can council tax debt be written off?” It covered the various conditions, and their respective processes by which your council tax tax debt can be written off. It also briefly covered the situations that occur when you don’t pay your debt.

FAQs

How long before a council tax debt is written off?

If you have availed an IVA, then your council tax debt can completely be written off at the end of 5 years.

How long can council tax debts be chased in England?

Most of the debts in England can be chased for as long as six years, or in case of debts such as mortgages for twelve years. In the case of council tax debts, it depends on the individual local authorities, because they generally don’t give up on their debts so easily.

Who is liable for council tax debt?

The one who has to pay the council tax is liable for council tax debt. Couples are jointly liable for their debt, as well as individually.

Can I go to jail for not paying council tax?

It is not usual, but yes, you can go to prison for not paying council tax, if you are doing so deliberately. If the court decides that you have no acceptable reason for not paying your council tax, you may go to jail for upto 3 months.

Can bailiffs force entry for council tax debt?

Not generally, but bailiffs can force entry in England or Wales, if they  have previously entered and you have signed a controlled goods agreement.

Citation

https://www.stepchange.org/debt-info/council-tax-arrears.aspx
https://www.gov.uk/council-tax/who-has-to-pay
https://www.stepchange.org/debt-info/liability-order.aspx
https://www.stepchange.org/debt-info/unpaid-council-tax-debt.aspx
https://www.lgo.org.uk/
https://www.spso.org.uk/
https://www.thesun.co.uk/money/16040851/council-tax-debt-written-off-if-struggling/
https://www.citizensadvice.org.uk/debt-and-money/help-with-debt/dealing-with-urgent-debts/dealing-with-council-tax-arrears/
https://www.gov.uk/council-tax-arrears
https://www.nationaldebtline.org/fact-sheet-library/council-tax-arrears-ew/
https://ivaplan.co.uk/types-of-debt/council-tax-debt/
https://www.dealingwithbailiffs.co.uk/CouncilTaxWriteOff.html

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.