What to do if you have problems paying your Council Tax

In 2021, National Debtline has found that greater than 7 million other people in Britain are nervous that they gained’t be ready to find the money for their council tax expenses over the approaching yr.

So if you are having problems paying your council tax, you aren’t by myself. But what can you do if you have arrears?

This drawback has been expanding for a few years. In the last decade between 2009 and 2019, the percentage of callers to National Debtline with council tax arrears doubled from 15% to 29%.

And this yr, when thousands and thousands are nonetheless affected by the monetary results of Covid-19, council tax rises across the country have been high. 83 councils have raised their fees by way of greater than the 5% cap really useful by way of the federal government.

how council tax has increased in 2021 - do you have council tax arrears? what if you can't afford to pay it?

It’s a “priority debt”

Council tax arrears build up dramatically if you forget about them. Local government are quicker to cross to courtroom and ship in bailiffs than industrial collectors akin to payday lenders, bank cards and cellphones.  This provides a large number of further prices.

This could also be a precedence debt as a result of you can also be despatched to jail for now not paying it if you reside in England.  This may be very uncommon nevertheless it does occur.

So what will have to you do if you can’t find the money for it?

Can you get any council tax reductions?

Take a couple of mins to test you are being billed for the correct amount.

Single other people will have to get a 25% cut price.

You too can get the 25% cut price if the opposite adults in your space are exempt from council tax, eg they’re scholars or have a critical psychological incapacity akin to Alzheimer’s, Parkinson’s, or psychological problems after a stroke.

If you are on advantages or a low source of revenue you is also entitled to Council Tax Support – practice on your council’s web page. You have to practice one after the other to your native council for Council Tax Support if you are on Universal Credit, it isn’t performed as a part of your UC utility,

Pensioners who get Pension Credit don’t have to pay any Council Tax. So if you are a pensioner with an source of revenue beneath £177.10 every week (or £270.30 for a pair), test this Pension Credit calculator.

Is the council tax band proper?  Check to see if your neighbours are in a lower band, and if they’re, learn MoneySavingExpert’s information on how to challenge your banding. The Valuation Office Agency’s statistics display just about 30% of band demanding situations in England and Wales in 2019-20 led to a lower within the band.

If any individual in your family is disabled and calls for further house or amenities, your council tax may be reduced.

Priority money owed have to be paid first!

When I mentioned council tax arrears are a concern, you would possibly simply have idea I simply intended they have been necessary…

But they actually have to be paid first.

If you don’t have sufficient cash to pay your Council Tax and all your non precedence money owed, make an association to pay the council tax and what’s left has to be divided between your bank cards, catalogues and loans.

A Debt Management Plan can assist you care for your bank cards, catalogues and loans. If important, you could make token bills of £1 a month to non-priority money owed.

Your different collectors will settle for that you have to pay precedence money owed akin to council tax first.

If this turns out inconceivable, communicate to a debt adviser.

There is also choices akin to a Debt Relief Order (DRO)  or chapter that may give you a blank get started. They can wipe council tax arrears for earlier years and this yr ,as smartly maximum different varieties of money owed.

If you have council tax arrears

If you get at the back of at the per month bills,  telephone your council and take a look at to make an association to pay.

The letter from the council would possibly say you have to pay the entire years tax in an instant. Don’t let that put you off – telephone the council and be offering per month bills.

It can assist to get those authorized if you say you will arrange an instantaneous debit.

If you forget about the issue maximum native government are fast to cross to courtroom for a Liability Order which will upload £100 or extra to your debt right away.

Councils are then fast to cross on Liability Orders to the bailiffs – yearly greater than 1,000,000 council tax money owed are despatched to bailiffs for assortment. Bailiffs charges then make your debt even higher in no time, as the next instance presentations:

council tax arrears £95
value of summons & legal responsibility order £120
First letter from bailiff £75
First discuss with from bailiff £235
Total £525

If you can’t find the money for up to the council is looking, the most efficient puts to opt for assist are native services and products akin to your local Citizens Advice or a Law Centre.

Liability orders and bailiffs

Don’t forget about a letter pronouncing {that a} Liability Order has been granted – if you do the debt can be handed to bailiffs and will get so much higher. Instead, telephone the council right away even if you can’t pay it in complete.

Make an association to pay

If you get an association to pay arrange, the council gained’t ship the debt to the bailiffs.

When you make an association to pay, pay the precise quantity by way of the precise date agreed. A status order or direct debit is one of the best ways.

If you pay a little bit extra, the council would possibly assume this as a cost to every other arrears for a unique yr and your cost association would possibly fail.

Deductions from advantages

You is also ready to pay it by way of deductions from your advantages:

  • if you are on JSA  ESA or Income Support, ask for your council tax debt to be repaid by way of deduction from your advantages of £3.75 every week;
  • if you are on Universal Credit, 5% of your “Standard Allowance” can also be deducted. The cash you get for your housing prices is probably not affected.

It’s already been despatched to a bailiff

If the debt is shipped to the bailiffs, learn Bailiffs – what you want to know.  That seems to be at whether or not you have to allow them to in (for council tax arrears the solution is NO!) and what to do to prevent your automobile being taken.

You would possibly want assist to care for bailiffs – cross to your native Citizens Advice or Law Centre.

Do now not google for assist with bailiffs and finally end up speaking to a company that claims they may be able to get 80% of your debt written off. These are NOT bailiff experts. They won’t communicate to the bailiffs or your council. They are unscrupulous companies which might be making an attempt to get you to join to an IVA.

IVAs are best proper for a small choice of other people, however they have huge charges so they’re continuously mis-sold.

Tip – test earlier tax years

Councils paintings in tax years which run from April to March. A letter would possibly say you owe £230 for the tax yr 2020-21. But you might also have different arrears for earlier years as smartly.

This can also be very complicated. You would possibly assume you have made a cost association and the whole thing is OK. Then bailiffs ship you a letter for a unique tax yr debt.

So every time you communicate to the council, don’t simply ask in regards to the letter you have simply had. Always ask if you have any money owed from earlier tax years as smartly.

Don’t borrow extra!

Taking out any other mortgage isn’t a just right resolution for a council tax drawback. Getting deeper into debt makes your state of affairs worse, particularly if the rates of interest are top.

It’s higher to get debt recommendation now. If you check out to borrow your method out, you will simply have a bigger drawback in a couple of months.

More Debt Camel articles:

Can you in reality be offering simply £1 to a debt?

Are you suffering to pay automobile finance?

Divide your debts into priority and non-priority

what money owed are NOT a concern

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