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What happens if you do not pay your council tax

Overview

We are determined to collect the council tax we are owed. 

We must receive your payments on or before the due date shown on your bill. If payment is not made, the recovery process will begin.

  • The first and second times you are late, you will receive reminders.
  • If you do not pay the reminder or make a new repayment arrangement, you will receive a summons to a magistrates’ court hearing where we will ask for a liability order to be granted. This will result in additional costs being added to the amount you owe.
  • If you are late three times in a row, you will receive a final notice. This means you have lost the right to pay in monthly instalments, and will have to pay the full amount of your remaining council tax for the year.
  • If you do not pay the final notice in full or make a new repayment arrangement, a summons will be issued, including costs. 
  • If the full amount, now including costs, is not paid before the hearing date, we will ask the magistrate to grant a liability order.
  • If a liability order is granted, we will take further recovery actions unless you make an arrangement with us to pay. These recovery actions may include enforcement agents (previously known as bailiffs), attachment to earnings orders, or deductions from benefits.

Reminder

If you receive a reminder, this is because our records show you have not made your monthly payment as shown on your council tax bill, or you have paid late or not paid the full amount. 

If you have forgotten to pay, you should pay the outstanding amount immediately. You cannot pay a late or partial payment using Direct Debit.

If you believe you have paid the full amount, or if you paid the full amount late, the reminder might have been issued before your payment reached us. If this is the case, no further action will be taken. We recommend that you use council tax online to check if your payment has been credited to your account. Payments are recorded on your account when we actually receive the money, so you need to allow time for your payment to reach us.

If a payment has not been credited to your account and you think it should have been, contact us

If you have an outstanding claim for council tax reduction, or an outstanding appeal against your council tax band with the valuation office, you still need to pay your monthly instalments while your claim/appeal is being considered in case it is not successful.

Final notice

Once you have been issued with a final notice, you have lost your right to pay council tax by instalments and the whole outstanding balance is now due. 

If you are unable to pay the balance in full as instructed on the final notice, contact us as soon as possible to discuss an alternative payment arrangement.

Magistrate court summons

A magistrate court summons is issued when you do not pay your outstanding council tax following a final notice. 

Once a summons has been issued you have lost your right to pay council tax by instalments and the whole outstanding balance, including costs incurred by us in issuing the summons, is due immediately. 

If the full balance, including the costs, is paid before the court hearing, no further action will be taken.

Who has to pay

Every person named on the bill will receive a copy of the summons, but only one amount of council tax and court costs needs to be paid. Everybody named on the bill is ‘jointly and severally liable’ for the full amount. This means that we can ask for the full amount owed from anybody named on the bill. 

If you want to split the amount owed, it is your responsibility to make sure that everyone pays their share. 

If payment is not received in full, further action can be taken against anyone named on the bill, even if a partial payment has been received, and further costs may be added onto the bill.

If you receive a summons for the people that used to live at your address, please write 'return to sender' on the envelope and post it back to us.

How to pay

You should pay the outstanding amount immediately. You cannot pay a late or partial payment using Direct Debit.

If you are unable to pay the balance in full as instructed on the summons, contact us as soon as possible to discuss an alternative payment arrangement. If we are able to agree an arrangement, we will ask the magistrate to grant a liability order. If the liability order is granted, £66.50 costs will be added to your bill but no further action will be taken as long as the payments are made as agreed.

If you contact us after the court date, we may make a suitable payment arrangement with you unless we have started any recovery action against you.

Attending court

You can attend court if you want to, but the court is not able to consider your financial situation or discuss payment with you.

You only really need to appear if you have one of the eight legal defences listed below, to put to the magistrate as to why you feel that you do not have to pay.

Legal defences against the issue of a liability order

There are eight legal defences in council tax legislation against the issue of a liability order:

  1. There was no entry in relation to the dwelling in the valuation list effective for the period for which the defendant is alleged to have been liable to pay the council tax.
  2. That the tax had not been properly set.
  3. That the tax had not been demanded in accordance with the statutory provisions or no joint and several taxpayers notice has, where appropriate, been served.
  4. That the amount demanded has been paid.
  5. That more than 6 years have elapsed since the day on which the sum became due.
  6. That the billing authority was in breach of the duty to serve notices “as soon as practicable” in the relevant year in compliance with Reg 19(1) of the Administration and Enforcement Regulations
  7. That bankruptcy or winding up proceedings have been initiated.
  8. That the sum outstanding is in respect of a penalty which is the subject of an appeal or arbitration.
  • £70 first failure to supply, or knowing supply false information.
  • £280 second failure to supply same information.

If you think that you have one of these defences, please contact us as soon as possible.

Liability order

A liability order is amade by the local magistrates court that gives us powers to collect the debt that it is owed. The order is for a fixed amount of money, plus costs. Both of these amounts are payable immediately.

Once a liability order has been granted, we are entitled to request information about your income. If requested, you are required by law to provide this information. Failing to answer, or providing false information is a criminal offence.

Request for information form [PDF]

Once we have received your fully completed form, we will be able to consider our options. Our options to collect the debt might include:

  • deductions from certain state benefits (Universal Credit, Income Support, Job Seeker’s Allowance, Pension Credits or Employment Support Allowance)
  • an attachment of earnings order
  • the use of enforcement agents (bailiffs) to remove goods from your home to be sold to pay the debt
  • starting insolvency proceedings against you
  • placing a charge against any interest you may have in the property and considering forcing the sale of your home where necessary (known as a ‘charging order’​)
  • Committal to prison

Enforcement agents (bailiffs)

If we decide to use an enforcement agent to recover unpaid debt, they will send you a notice to make you aware that they are now collecting council tax on behalf of Walsall Council, in relation to the liability order issued by the magistrates court. You can no longer arrange payment with us.

Their fees will be added to your bill, and you will have to contact the enforcement agent company directly to make arrangements for payment. 

Failing to contact the enforcement agent may lead to them removing your possessions in order for them to be sold to pay off the debt. This will again lead to further costs being added to your bill. They will continue collection until the council tax debt and costs have been paid in full.

Enforcement agent fees

There are fixed fees that an enforcement agent can charge a debtor when collecting a council tax debt.

  • Compliance fee: £75.00

Due as soon as the council passes an unpaid account to the agent for collection. This fee is payable on each liability order.

  • Enforcement fee: £235.00

Due if an arrangement to pay is not made, or if you default on an arrangement you have made with them, and a visit by an enforcement agent is required; this is a one-off fee regardless of the number of outstanding liability orders.

  • Sale or disposal fee: A minimum of £110.00

Due if the case reaches that stage.

  • A further 7.5% fee will also be charged on any additional amount above £1,500, excluding fees. This is only chargeable at the enforcement and/or sale and disposal stages.

Deductions from a qualifying benefit

We may decide that the best way to recover the outstanding council tax is by collecting the balance through your Universal Credit, Income Support, Job Seeker’s Allowance, Pension Credit or Employment Support Allowance.

The current deduction is £3.75 per week.

If we take this action, the Department for Work and Pensions (DWP) will be ordered to make the deductions and pass these directly to us. The DWP will write to you about this. They will tell you the amount that will be deducted each week and when this will start. This will continue until the amount of the order has been paid, or your circumstances mean that they cannot take further deductions.

Attachment to earnings order (AOE)

The AOE places a legal requirement on your employer to deduct money from your wages/salary and pass that payment to us to pay towards your outstanding bill.

A letter will be sent to your employer containing your name, address, payroll number (if known) and council tax reference number. This letter will confirm that you are the person liable for council tax at the address shown, and detail the amount of charge that still has to be paid. Payments will start to be deducted as soon as possible after the letter has been received. You will receive a copy of this letter.

If an AOE is in place, you must tell the revenues and benefits service if you change your employer, or are no longer employed.

We can have an AOE against a maximum of two liability orders at any one time.

How much will be deducted

The percentage of your wages/salary deducted will depend on the amount that you earn and the number of liability orders in place. Your employer will deduct the council tax from your wages or salary until the full balance of the AOE is paid. 

If you have any questions about the exact amount to be deducted, ask your employer.

How to remove the AOE

If you pay the amount shown on the AOE order in full, we will stop the deductions being made from your wages/salary. 

If this is your intention, please contact us once you have paid.  Once we have received the payment and it is showing on your council tax account we will let your employer know that the AOE is paid in full.

Bankruptcy

Bankruptcy is a declaration to your creditors that you cannot afford to repay your debt. If you or your company owe more than £5,000 in council tax, and you have been summonsed, we may start bankruptcy proceedings against you. 

Statutory demand

If we take this action, our solicitors will send you a statutory demand.

A statutory demand gives you 21 days to pay us the full amount. If you receive a statutory demand, you should contact our solicitors immediately.

The bankruptcy process

If you do not settle the statutory demand, we will present a petition for bankruptcy or liquidation to the county court, which can make a bankruptcy order.

A bankruptcy order can be made even if you refuse to acknowledge the proceedings or refuse to agree to them. You should therefore co-operate fully once the bankruptcy proceedings have begun.

If you are declared bankrupt:

  • your bank accounts will be frozen
  • the official receiver will investigate your affairs and will control your spending for three years
  • you will no longer control your assets, and any asset you might acquire during the term of the bankruptcy, such as inheritances, insurance payouts/maturities, will be lost
  • you may not be able to obtain credit for over £500
  • your home could be sold to pay your debts

Certain employment situations will be prejudiced by being declared bankrupt, and professional and business status will be lost. Membership of some associations and societies may also be lost.

Your trustee may apply to court for an Income Payments Order (IPO), which requires you to make contributions towards the bankruptcy debts from your income. The court will not make an IPO, if it would leave you without enough income to meet the reasonable domestic needs of you and your family. If you have an increase or decrease in income, the IPO can be changed.

The role of the official receiver

The official receiver is responsible for looking into your financial affairs for the period before and during your bankruptcy. They have to report to your creditors and may report to the court. They must also report any matters which indicate that you may have committed criminal offences in connection with your bankruptcy, or that your behaviour has been dishonest or you have been in some way to blame for your bankruptcy.

All the following items must be disclosed to the official receiver who will then decide whether you can keep them:

  • tools
  • books
  • vehicles
  • clothing, bedding, furniture, household equipment and other basic items you and your family need in the home
  • equipment which you need to use personally in your employment, business or vocation

You can usually keep the above items unless their individual value is more than the cost of a reasonable replacement.

The official receiver will take your home unless you have a partner who can prove they have an interest in the property. If this is the case, the official receiver will allow your partner to purchase your share of the equity. If they are unable to do this, the trustee in bankruptcy will, after 12 months, have the right to obtain possession and subsequently issue an eviction order.

Charging order

Where more than £1,000 is outstanding under liability order(s) and the council tax payer has a legal interest in a property, the council may apply to the county court for a charging order on that property.

If a charging order is granted, it means that if the property is sold, you will have to pay that debt off first before any of the proceeds are given to you. You do not have to sell your property once the final charging order is in place. There are some circumstances where we may apply to a court for force of sale, but this is rare.

A charging order only applies to the share of the property owned by the person who owes the council tax.

How to remove a charging order

If you pay off the amount you owe under the charging order, the order will be discharged. The amount you have to pay will include court fees and costs that have been added to the debt, on which you may also have been charged interest.

Committal

If we have tried all other options, we may ask the magistrate to issue a summons for you to appear before them to explain why you have not paid your debt, and to enquire into your means.

If the court are satisfied that you could have paid the debt and that you have either refused to or  have been culpably negligent in not paying the debt, you may be imprisoned for a period of no more than 3 months for each debt.

The court may decide to postpone the imprisonment upon the payment of an agreed amount until the debt is paid.

The court has the power to remit the debt or part of the debt, if it sees fit.