Statistics released by the Department for Levelling Up, Housing and Communities Collection rates for Council Tax and non-domestic rates in England, 2020 to 2021 (publishing.service.gov.uk) indicate that council tax arrears stand at £4.4 billion at the end of the financial year on March 31, 2021. This amount not only reflects the outstanding amount of council tax collection during the past year but also cumulative payments built up over several years.

Meanwhile, local authorities managed to collect £31.7 billion in council tax during 2020-2021; marking the national average in year collection rate as 95.7 per cent. The total outstanding amount during this time (2020-2021 only) was £33.1 billion. However, local authorities had to write off £134 million as unrecoverable council tax in 2020-2021. This is a cumulative figure and stands at a lower average in comparison to previous years.

One of the reasons for a drop in council tax collections may be the leverage extended by the UK Government during the pandemic and the halt to bailiff visits to the premises of debtors. However, council tax debt is a priority debt and any arrears that one may incur must be cleared as soon as the debtor is able to.

Can I Move To A New House With Council Tax Arrears?

Yes, there is no legal restriction on a council tax debtor to move to new premises with arrears due towards their previous council. 

However, the debt will still remain in their name and will not be transferred to the new owners or tenants. This means that if you have council tax arrears and you move to a new house, you will not only be paying council tax for the new property but will also be obliged to clear your dues concerning the previous premises as well.

The best way to proceed in such a situation would be to inform your local council of your intention to move and work out a mutually agreed payment plan so that after your move to the new premises, the number of your tax bills due do not inflate. 

You can search for your local council’s website by typing your postal code in this weblink Find your local council

For an in-depth understanding of the circumstances that revolve around council tax payments, we will explore the following areas:

  • the reasons for paying council tax
  • eligibility criteria for council tax payments 
  • consequences of council tax arrears

Why Do I Have To Pay Council Tax?

Council tax is a mandatory tax applicable upon residents of properties in England, Scotland and Wales. The amount of tax charged depends upon the value of one’s property as per qualifications assigned by the Valuations Office Agency (VOA). 

Council tax is paid to local council offices to enable them to provide community-based services that improve the overall quality of life for residents. It pays for services including the following:

  • fire protection and police
  • roads and street lights
  • garbage collection and recycling
  • schools and community halls
  • parks and recreational centres
  • elderly care 

Who Has To Pay Council Tax?

Anyone who is above 18 years of age and rents or owns property in England, Scotland or Wales is eligible for council tax payments. However, under the following conditions, the council tax bill becomes due upon the owner of the property and not the individual(s) occupying it:  

  • if the premises are vacant and is considered as an empty home 
  • if the premises are not being used as a residential property but as a nursing home 
  • premises occupied by religious communities 
  • premises with multiple occupants with individual rooms being rented out 
  • premises serves as the residence of staff who live in houses occupied by an employer 
  • premises that are residences of ministers of religion

In case there are multiple members of a household, an “order of liability” ascertains the responsibility for paying council tax. It usually follows the below hierarchy: 

  • the resident who is the freeholder of all or part of the property 
  • the resident who is the leaseholder of all or part of the property 
  • the resident tenant 
  • the resident who is not a tenant but has permission to live in the property 
  • the resident occupying the property 
  • a mortgagee who is in possession of an owner’s interest 
  • the property owner when it is unoccupied

What Happens If Someone Does Not Pay Their Council Tax?

Council tax is a mandatory payment; failure to comply to which might lead to severe consequences; even a jail term of three months.

When a resident is unable to pay their council tax bill, they are advised to contact their local council office immediately and inform them of their situation. There are certain circumstances under which the local council may offer an easy payments plan by allowing the resident to pay the yearly tax in 12 instalments versus the usual 10. They may also offer a one-time discount on the remainder of their dues; depending upon the resident’s financial circumstances.

However, if residents fail to pay their council tax bills on purpose, they are sent a reminder to clear their dues along with the remainder of the yearly tax within 7 days. Two such reminders by the local council office within a financial term; asking for dues to be cleared, but in full. The council tax payment instalments are no longer applicable to tax debtors. Should the debtors not clear their dues within due time, a final notice is sent by the local council office followed by a magistrate court summons.

This means that the local council is now authorised to request the magistrate to issue a Liability Order and recover council tax debt through alternate means. These may include the following:

  • deduction from wages
  • deduction from benefits or allowances
  • sending a bailiff to recover valuables from the property
  • court sentence of a jail term of 3 months

There is a lead time of 14 days between the resident receiving a court summons and the actual court hearing for a liability order to be issued. If the resident contacts their council office and presents evidence of financial hardship, an easy instalment payment plan may be worked out mutually. Failure to do so may result in legal action against the debtor.

Conclusion

Council tax serves as the primary source of revenue for local councils through which they are able to provide community-based services to residents in the area. When they are faced with council tax arrears, they may fall short on this revenue and be forced to take legal action with the help of magistrate courts.

If someone faces financial hardship, they must inform their local council and seek a mutually agreed method of payment. In some cases, individuals may not be aware and they could be eligible for a council tax reduction, especially if they are on low income. 

Failure to make their council tax payments on time without any justified reason would only lead to an increase in their debt as local councils will not only demand a lump sum payment of the remainder of the council tax that is due but will also add any legal fee that they may have incurred during the process.

FAQs: Can I Move To A New House With Council Tax Arrears?

Can council tax arrears be written off?

Yes, council tax arrears are written off after a time-lapse of six years. However, during this time councils would have used all possible debt recovery means including a court summons, liability order, wage deduction, bailiff visit or even jail term for the council tax debtor.

What happens if you have council tax arrears?

If you have council tax arrears due to a change in your income or ill-health, the matter may be considered by the local council to check if you are eligible for council tax reduction. In this case, your dues are recalculated and an easy payment plan with discounted future instalments is made available. 

However, if you have purposely caused council tax debt upon yourself, the local council starts their debt recovery process with reminders, followed up by a legal demand for advance payment of the tax with no instalments options to even arranging a court summons to be issued to the debtor’s name. This is usually followed by a liability order and eventually, the debtor may be sent to jail for three months.

How long can a council tax debt be pursued?

Council tax debt may be pursued by local councils for up to six years.

Does council tax debt get written off after 6 years?

Yes, council tax debt is written off after 6 years. Usually, by this time, the initial due amount has been reduced by a certain percentage and councils have been able to recover partial payment of the dues.

Can bailiffs force entry for council tax arrears?

No, bailiffs are not allowed to force entry for council tax arrears. In fact, prior to their visit, the local council office is supposed to inform the residents of the date and time of the bailiff’s visit to their house. They will also be informed of the total amount due upon them as by now their council tax debt would not only include unpaid instalments, but also bailiff’s fee and any other legal fee that the council has paid for.

References:

Paying council tax – Which?

Change of Tenancy

Dealing with Council Tax arrears

Pay Council Tax arrears

Collection rates for Council Tax and non-domestic rates in England, 2020 to 2021

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