What Happens If I Can’t Pay Council Tax in Full?

This blog answers the question “What Happens If I Can’t Pay Council Tax in Full?” It is crucial to inform your local council of your reasons for missing council tax payments so that HMRC does not need to go as far as taking you to court and making you pay off the remaining amount by confiscating your assets. You can avail discounts on your council tax bill by applying for the council tax reduction scheme.

What Happens If I Can’t Pay Council Tax in Full?

If you can’t pay your council tax in full, you must first inform your local council of your circumstances and financial deficiencies immediately. This is essential to ensure that you don’t miss your council tax (monthly) payment, which will trigger a series of actions from your council, starting with a 7-day ultimatum to arrange for the money.

Following this, if you still can’t pay or ignore the notice you might be forced to pay the entire year’s council tax in one go. Beyond this, the Council will ask the magistrate for a liability order and you will need to answer the prosecution in a court case. So to avoid this series of unfortunate circumstances it is best to apply for a council tax reduction with your council or at least let them know of your shortfall in income or financial problems.

Council tax is a priority debt so it must be paid off before you make your other monthly repayments (on credit card debt, mortgages, loans, or even utility bills). In the end, the court or your council will look at evidence of your income and expenses to decide your case.

 If they are unable to discover any proof of you spending your income or savings on other “non-priority” debt payments or other expenses, you might be pardoned for this offense.

What happens if I miss my Council Tax due date?

Firstly you will be served a 7-day reminder notice and at the end of this time, if you still haven’t paid, you will be paying the entire year’s council tax. There are a maximum of 2 such reminders in a year (running from April 1st to March 31st the next year). If you fail to pay the entire year’s tax the council can ask the magistrate for a liability order. You can go to court and explain the reasons for your non payment, if they are acceptable ones.

If this is not the case and the reasons you give to the council for missing the payment are not accepted the council can apply to take money from your Universal Credit, Income Support, Pension Credit, Jobseekers Allowance, and Employment and Support Allowance.

Beyond this, the Council can send bailiffs to seize your property if there is no other way to recover your council tax through legal proceedings.

How much is my monthly council tax bill?

If you live in Bristol Council, your monthly council tax payment is:

  • £123.91 for a property valued in Band A
  • £144.56 for a property valued in Band B
  • £165.21 for a property valued in Band C
  • £185.86 for a property valued in Band D
  • £227.17 for a property valued in Band E
  • £268.47 for a property valued in Band F
  • £309.77 for a property valued in Band G
  • £371.73 for a property valued in Band H

So if you cannot pay 124 for a property in Band A and only have 100, you will be left with 24 of unpaid council tax. Similarly if you cannot arrange for 145 to pay the monthly bill for a property valued in Band B, and only have 105 left over (after deducting essential expenses)  you will be left with 40 of unpaid council tax. 

For a property in Band C, if you have 135 left at the end of the month to pay for council tax instead of the required 165, you will be left with 30 of unpaid council tax. All this amount is considered as debt with HMRC unless you can arrange for getting it added to your future monthly council tax bills. You can also apply for the council tax reduction scheme in your council.

What is the Armed Forces Tax Rebate?

Members of the British Armed Forces are entitled to a council tax refund for covering military expenses such as the following:

  • Travel expenses for overseas postings
  • Military training before and after mobilisation for duty
  • Expenses to obtain enhancing qualifications such as career courses
  • Expenses on necessary food items.
  • Expenses incurred when posted on temporary military duty
  • Training costs of military courses attended at universities

How Can I Benefit from the Council Tax Reduction Scheme?

You can benefit from a discount on your council tax bill if you (or someone living with you) qualify for any of the following categories of the scheme:

  • The Single Person Discount
  • The tax reduction for care providers ( Carer’s Discount)
  • The Council Tax reduction for living with or being an SMI (Severely Mentally Impaired) resident.
  • The Apprenticeship Discount
  • Council Tax reduction for living with prisoners (people who have been detained and are serving an active prison sentence)
  • A Council tax reduction for living in an annexe
  • A Council tax reduction for living with patients (who are currently admitted to hospital).

The Council tax reduction scheme can lower your monthly bill by 25% to 50%, which can bring it within the affordable limit of your income and savings.

What is the Exceptional Hardship Payment benefit and how can I apply to get it?

If you are receiving council tax reduction but despite this, your remaining council tax bill payments are causing you significant financial hardship, you can apply for this Exceptional Hardship Payment benefit. This benefit is only for short-term financial problems and is not intended to be claimed indefinitely. 

You need to inform your council as soon as your circumstances change and you are able to pay your full amount of council tax (with tax reduction incentives) The Exceptional Hardship Payment will be credited to your tax account to reduce the amount you owe

Each case is looked at individually and paid for different periods of time, so make sure you provide full and accurate proof of your current financial situation. You must be receiving Housing Benefit or the Housing Cost Element of Universal Credit to qualify for getting the Exceptional Hardship Payment Benefit and there must be a shortfall between your Housing Benefit and your rent that you cannot afford.

To complete the Exceptional Hardship Payment benefit form you will need your Benefit case reference number or your Council Tax account number or your National Insurance number.

To apply for the Exceptional Hardship Payment benefit in Sefton Council you can fill this form


This blog post addressed the question “What Happens If I Can’t Pay Council Tax in Full?”If you can’t pay council tax in full you can apply for the Exceptional Hardship Payment Benefit to cover your extra council tax. You will need to provide proof of your poor financial circumstances through your income, savings and expenditure information.

Beyond this, to avail most council tax reduction offers you have to be claiming certain benefits demonstrating your special needs for that discount. If you fail to make a complete monthly council tax bill payment, the unpaid amount can be added as an increase to your upcoming monthly payments (If your council allows this).

In most cases, you will have to pay the exact amount mentioned as your monthly council tax installment, and failure to do so will simply add the entire yearly bill to your debt.

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Frequently Asked Questions (FAQs):  What Happens If I Can’t Pay Council Tax in Full?

I paid council tax by Direct Debit last year, do I need to sign a new Direct Debit instruction?

No, you don’t need to sign a new Direct Debit instruction. Your Direct Debit mandate which was signed at the time of your first payment authorizes Council Tax to deduct payments automatically. The DDI is designed in such a way that it authorizes all future payments in one go (you will be provided with advance notice before the money is charged from your account).

You can double-check that your Direct Debit instruction is still active by looking at the payment details on your current bill. The payment section of your council tax bill shows you your chosen mode of payment, and the size and deduction date (from your account) of each installment.

What are Discretionary Housing Payments?

Discretionary Housing Payments are designed to provide you with extra (short-term) support in paying your rent. You must be claiming Housing Benefit or the housing element of Universal Credit first, to be eligible to receive Discretionary Housing Payments. Also, it must be first demonstrated that the financial help provided by Universal Credit and Housing Benefit is insufficient to cover rent payments in your case.

So the requirements to apply for Discretionary Housing Payments are:

  • Being on Housing Benefit or the housing element of Universal Credit
  • Being able to prove the existence of a shortfall between the amount of rent you have to pay and your benefits (plus the income and savings you might have leftover to cover rent payments)

The documentation evidence which will be looked into includes:

  • Your income and savings. This will be your monthly pay slips or income from shares or assets and the level of your current savings
  • Your current bank loans and debts (which could be mortgage debts, council tax debts or credit card debts)
  • Evidence of anyone being disabled or diseased in your family or household. This evidence can become the basis of a Discretionary Housing Payment award.
  • Evidence of you having to receive care at home for a disability.
  • Proof of how and on what you spend your income.

The Discretionary Housing Payment can be applied for online You will need to upload scanned copies of the following documents in your online form:

  • A copy of your most recent payslip. If you are working
  • A copy of your bank account statements from the past 2 months
  • Evidence of any loans you have taken, any credit card repayment agreement or any mortgage repayment agreement.
  • In case you are unwell you will need to provide copies of recent medical evidence from the NHS or your (registered) medical practitioner.
  • Copies of any letters you have received from your landlord about your rent arrears

Discretionary Housing Payment in the UK helps those people who are affected by:

  • The benefit cap ( A limit on benefits)
  • The abolishment of the spare room subsidy in the social rented sector
  • Local Housing Allowance (rent) rates