According to statistics released by the Department for Levelling Up. Housing and Communities, local authorities in the UK collected £32.2 billion as council tax. This amount accounts for a near 2 per cent increase over 2019-2020; mainly due to the economic impact of covid-19 during this time. 

At the onset of the pandemic, extensive lockdowns forced many businesses to shut down; unemployment levels increased, income levels dropped and while reopening of economic activity was intended towards economic stability for households and businesses alike, it lead to inflation; thus increasing the cost of living in the UK.

In response to this and to sustain living standards among households, the UK Government offered increased support to taxpayers through discounts and local council tax support schemes. While low-income households received the financial support they needed, such discounts delayed recoveries and contributed towards reduced council tax collection during 2019-2020 in comparison to previous terms. This was also a time when many authorities paused or suspended recoveries, either due to lockdowns or a general realization of reduced incomes. In certain cases, delays were also caused due to court closures during the pandemic.

Can You Get Evicted For Council Tax Arrears?

Yes, if you keep missing your council tax payments and reminders, eventually you may get evicted for council tax arrears. However, this is not an immediate action; rather it involves a process. When someone is unable to pay their council tax, the first step taken by the council is to send them an official notice asking to clear their dues in the next 7 days. Should they not be able to make up for the missed payment, residents may be asked to pay council tax for the entire year ahead. 

Two such reminders may be sent by the council to encourage council tax payments. However, if the resident does not clear their arrears even after receiving the final notice from their local council, legal action may be taken. This includes possession of valuables and in certain cases eviction from residential premises.

What To Do When You Are Unable to Pay Council Tax?

Once an individual has realized that they may not be able to pay their council tax, they are advised to contact their local council immediately. A simple click on this link may lead you to your local council website Find your local council – GOV.UK (www.gov.uk)

They may also request the local council authorities to spread their bill over 12 months (instead of the usual 10 months duration) so that the amount of tax to be paid per bill is reduced. Sometimes local councils might offer a one-time discount to individuals who have difficulty in making current or clearing past payments.

To confirm if you are eligible for a council tax reduction, click on this link and enter the required details Apply for Council Tax Reduction – GOV.UK (www.gov.uk) 

What Happens If You Miss Council Tax Payments?

If an individual misses their council tax payments, they will receive a written reminder from the local authorities to clear these arrears within 7 days. 

Should they miss another payment, one more reminder will be sent by the local council. Only 2 reminders are sent per financial year. If defaulters are unable to comply with the final notice they will be required to pay the entire tax amount for the year as one payment.

If payments are not made by then, the local council has the authority to take legal action against defaulters. For this purpose, a “magistrate” or liability officer may be appointed by the local council who will then send a legal notice to the defaulters. The cost of hiring the lawyer and any legal fees that the local council is required to pay will be added to the defaulters’ council tax arrears.

If payments are still not cleared, local councils have the authority to demand the arrears directly from the defaulter’s employers who will deduct the amount from their salary.  Furthermore, they may also apply to have the amount deducted from any benefits that the individual is in receipt of. These may include:

  • Income support
  • Employment allowance
  • Support allowance
  • Jobseeker’s allowance
  • Universal credit
  • Pension credit

If the council tax arrears remain unpaid, the local council may send a bailiff to the premises of the defaulters to take possession of their property. The cost of sending a bailiff may be added to the arrears. 

If the bailiff is unable to recover sufficient property to cover the arrears, the local council may take the defaulters to court. It is then at the discretion of the court and the evidence provided by the defaulters that may confirm whether (a) they can afford to pay the bills (b) if they have valid reasons for not being able to make payments earlier. 

If defaulters do not have valid reasons for not making council tax payments or should they refuse to make payments, they may be sentenced up to 3 months in prison by the court.

Can Council Tax Arrears Be Written Off?

While it is certainly possible to have your council tax arrears written off, it is not common practice as local councils are not authorized to make such decisions at their discretion. In case there is a build-up of large amounts of council tax debt, a percentage of these may be written off through the Individual Voluntary Agreement (IVA); a legally binding agreement between debtor and creditor(s) that helps debtors pay off their debts at an affordable rate.

In case of council tax arrears, individuals currently at default will be legally bound to clear their arrears in the next 5 years after the IVA is duly signed as an agreement between the local council and the defaulting party. Should there be any debt remaining after the completion of this term, it would be written off based on the defaulting party’s inability to pay it back.

What Conditions Are To Be Met For Writing Off Council Tax Debt?

One of the basic requirements for IVA to be in place and have council debts written off is that the total value of the debt must be £5000 or above. Additionally, the debtors must have a regular income of £800 or above. Finally, the debtors’ council must be on the list of approved councils.

It must be noted here that while certain councils may allow for a percentage of the total debt to be paid back; others may insist upon full payment. Therefore it may be helpful for individuals to check whether their council is on the list of those who are likely to vote in favour of an IVA proposal. 

Have Council Tax Arrears Increased In 2020-2021?

As per the same statistics released in a report titled Collection rates for Council Tax and non-domestic rates in England, 2020 to 2021 (publishing.service.gov.uk) the total outstanding amount of council tax on March 31 2021 stood at £4.4 billion. It should be noted that this is a cumulative figure, reflecting due and over-due payments over several years.

However, during the same period, local authorities managed to collect £31.7 billion in council tax; marking the national average in year collection rate as 95.7 percent. The total outstanding amount during this time was £33.1 billion. Meanwhile, local authorities wrote 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.

It is expected that as the economy continues to recover from the after-effects of covid-19 and the tax discounts that were earlier granted and revoked, tax collection figures will rise; including those of council taxes.

FAQs: Can You Get Evicted For Council Tax Arrears

How long can you be chased for a council tax debt?

Should an individual be unable to clear their council tax arrears, they will be reminded along with certain strict legal actions taken by the local council. This process may go on for at least six years. 

Does council tax debt go away?

If the debtors can clear payments within 7 days of receiving the first notice from the local council, the debt is cleared and they can revert to their original payment of council tax instalments.

Can bailiff force entry for council tax?

While a bailiff is not able to force entry to claim council tax payments, the local council is authorized to send a bailiff for collection to the debtor’s residence. Before this, they will call the debtor to remind them of the total amount due as council tax arrears, as well as inform them about the bailiff’s visit. 

Do council tax arrears affect credit rating?

Since arrears are recorded on credit reports for around 6 years, any outstanding amount of council tax may harm the credit score of individuals during that period. Even after the council tax debt has been cleared, it will continue to impact one’s credit score. It will only be at the end of the 6-year tenure that any such outstanding amounts cease to affect credit rating.

Is there an ombudsman for council tax?

Ombudsmen are independent and impartial; they do not instruct local councils. However, if an individual has evidence to prove that their claim has not been met appropriately by the local council, they may state a complaint with an ombudsman. However, if a claimant disagrees with the decision of the local council regarding their claim, appeal versus a claim is more advisable.

References: 

Pay Council Tax arrears – GOV.UK (www.gov.uk)

Write off Council Tax Debts | Which 46 Councils let you? – IVA Advice (iva-advice. co)

Collection rates for Council Tax and non-domestic rates in England, 2020 to 2021 (publishing.service.gov.uk)

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.