Council tax is mandatory upon all adult homeowners and tenants; non-payment of which leads to a more difficult financial situation for the debtors when the local council office demands upfront payment from council tax defaulters. 

There are some exceptional cases where council tax may be written off due to the debtor’s personal or financial circumstances, ill-health or may be reduced due to changes in the structure or value of the property in question or a change in income level of the resident.   

There is no willful evasion of council tax payment, neither can an individual claim exemption from council tax payments simply because they have not been able to budget their monthly instalments. 

Yet, there are many who deliberately stop paying their council tax bills without knowing that certain conditions may qualify them for a council reduction or even exemptions. 

By taking their local council authorities in confidence and sharing their personal circumstances, they may be able to save themselves from being registered as a council tax debtor and any counteraction taken by the local councils to recover the amount that is being owed.

Is Non-Payment Of Council Tax A Criminal Offence?

No, non-payment of council tax is not a criminal offence but in extreme cases, debtors may be sentenced to up to three months in prison. However, this usually happens when the debtor has not responded to the payment reminders sent by the local council office or any other recovery method has proven to be unproductive.

If an individual is unable to make council tax payments, they are advised to inform their local council office immediately. The authorities may be able to redesign the instalments so that instead of 10 monthly payments, the applicant can pay their council tax bills over a 12 month period. This will reduce the amount of council tax to be paid each month, making the payments more convenient. 

In certain situations, council authorities may offer a one-time discount to residents so that they may be able to manage future payments regularly. 

Find your local council to learn more about the options available in your area as each council maintains its own council tax scheme.

Through this article, we will explore the following areas to have a better understanding of council tax payments:

  • What Happens When Someone Misses Their Council Tax Payments?
  • How Do I Know How Much Council Tax To Pay?
  • How Does Council Tax Debt Get Written Off?

What Happens When Someone Misses Their Council Tax Payments?

While it is best that individuals expecting to be unable to pay their council tax bills inform the local authorities in advance so that if there is any leverage possible from the council’s side, it may be extended in time. However, if a resident chooses to stop making payments, the following order of events would take place as a reaction from the council office:

Step 1: When a resident has misses their council tax payment for the first time, the council office sends them a reminder to clear their dues in the next 7 days. They are informed that if they fail to do so, the remainder of the year’s council tax dues will be enforced as a one-time payment and they will lose the option to continue paying in instalments. 

Step 2: If the resident continues the defer council tax payments twice in a row, a second reminder will be sent by the local council office, asking them to clear their dues. Within one financial year, there will only be 2 such reminders sent. The next communication will be a final notice from the council’s side, which serves as a legal demand for council tax debt to be cleared. All legal fees incurred for the debt recovery process will also be added to the council tax dues to be paid by the debtor.

Step 3: After the final notice, the council can now apply for a Liability Order to be drawn up upon the debtor. The next communication between that of the council and the debtor would be magistrate court summons which demands clearance of dues on an immediate basis or court appearance in the next 14 days. Should the resident clear their due before the court hearing, there will be no hearing or Liability Order.

Step 4: If council tax dues are not cleared by the debtor and the date of the court hearing arrives, a Liability Order will be issued in their name (irrespective of whether or not the debtor appears in court). Should the debtor be in any form of financial hardship or facing a severe health condition, they must seek advice from a reliable consultant or their local Citizens Advice bureau. Should the debtor’s circumstances qualify them for a council tax reduction or exemption, they may be able to defend themselves during the hearing.

Step 5: In case of a lack of defence from the debtor’s side, the Liability Order will now be issued. This authorises the council for the following:

  • deduction of dues from debtor’s wages through contact with the employer
  • deduction from any benefits that they may be receiving such as Income Support, Job Seeker’s Allowance, Pension Credit, Universal Credit, Employment and Support Allowance
  • visit by bailiff’s to seize valuables amounting to the council tax dues from the debtor’s property
  • court proceedings that usually lead to jail time of 3 months if they decide that the debtor has no valid reason not to make payments 

How Do I Know How Much Council Tax To Pay?

Anyone who owns or rents a property in England, Scotland and Wales and is above 18 years of age is eligible to pay a council tax. A full council tax is applicable on properties occupied by two or more adults. However, it is not just the number of residents that determine the amount of council tax due on the property. 

Houses are assigned bands based on their market value by the Valuation Office Agency (VOA) with Band A indicating the least market price and Band H indicating the highest market price. 

Based on these bands, the local council office calculates the yearly amount of council tax due on individual properties. Then, they break it down into 10 monthly instalments due for payment between April and January. February and March are tax-free months in which no council tax instalments are issued (unless a resident has requested 12 monthly instalments as compared to 10)

If a property is occupied by a single adult who lives on their own or is the only adult in the house (the other residents must be younger than 18 years of age), they qualify for a 25 per cent on their council tax bill.

If all the residents of a property are younger than 18 years of age, they will become eligible for a 50 per cent discount on their council tax bill. If all the residents are full-time students, they will be completely exempted from paying council tax at all.

If someone receives a council tax bill by mistake, they must inform their local council office immediately Find your local council

How Does Council Tax Debt Get Written Off?

Council tax is a mandatory payment and if someone is under council tax debt, they must consider it as a priority debt. This means that neither can one evade payment nor can they refuse payment of arrears.

However, if more than 6 years have passed from the time of the debt and there is still an unrecovered amount, it gets written off. In most cases though, local councils make sure that all debt recovery means are used to collect as many council tax arrears as possible.

If a council tax debtor applies for an Individual Voluntary Agreement, they may get help in paying their debts; or at least a percentage of them, while the rest gets written off. 

Conclusion:

While non-payment of council tax may not be a criminal offence, it may lead to a prison time of up to 3 months if debtors refuse to clear their council tax dues despite being able to. 

Other than this, non-payment of council tax may also lead to cancellation of the option to pay the tax instalments and debtors may be asked to pay the annual amount in full. Councils may also, be authorised to issue a liability order through a magistrate court. This empowers local councils to contact the debtor’s employers and have the dues deducted from their wages. Similarly, they may also contact the Department for Work and Pensions and have their dues cleared deductions from any allowances or benefits that the debtor may be receiving.   

FAQs: Is Non-Payment Of Council Tax A Criminal Offence?

What happens if you get caught not paying council tax?

If someone does not pay their council tax bills, they may face severe consequences through legal action taken up by local councils. From having to pay the yearly tax in full to a court summons to deductions from wages, benefits and allowances to even a jail term of up to 3 months, council tax debtors are worse off not paying their dues.

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

Usually, it takes a few missed payments for councils to apply for a liability order. However, despite using all their methods of debt recovery, council tax dues (or a part of them) may remain unrecovered. They may be able to pursue recovery of these up to 6 years, after which council tax dues get written off. 

Can council tax be enforced?

Council tax is a mandatory payment and its debt is a priority debt. Despite this, if a resident chooses not to pay their council tax bills, the local council office is authorised to send bailiffs to their property to claim valuables equal to the amount of the dues. 

Can bailiff force entry for council tax?

Bailiff visits are announced by local council offices and usually, a lead time of 7 days is given to debtors to make arrangements for payments. Debtors are also reminded of their council tax dues with the addition of bailiff visit fees as well. 

Does council tax debt get written off after 6 years?

Yes, council tax debt gets written off after 6 years. However, during this time, the local office would have tried other debt recovery methods to collect as much of the debt as possible.

References:

Pay Council Tax arrears

Hundreds jailed for unpaid council tax

Dealing with Council Tax arrears

Summons to Court | What happens if you don’t pay your Council Tax

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.