The cost of living is rising, and with it more and more people are finding it harder to pay their bills. Council Tax is no different after Chancellor Jeremy Hunt confirmed in the Autumn Statement that the cap on how much local authorities could raise rates would be relaxed.
Soon local authorities with social care responsibility will be given the flexibility to raise council tax bills by up to 5% (including a 2% social care levy), while others can impose rises of up to 3%. The current limits are 3% and 2% respectively.
So what does that mean for families already struggling to pay their bills? What happens to those who find themselves unable to pay their council tax?
What happens if I don’t pay my council tax?
In the worst-case scenario, councils do have the authority to recover any existing debts for council tax that isn’t paid. They can issue a court summons and a Magistrate’s Court may issue a liability order, allowing the authority to recover the debt.
This can mean they can take deductions straight from your earnings or your benefits, they can forward the debt to an enforcement agent, and in extreme cases, they may apply for a charging order against your property, take bankruptcy action and there is a possibility of a custodial sentence, however, this latter option is usually reserved for people who deliberately do not pay their council tax.
What happens if I can’t afford to pay my council tax?
Citizens Advice says that the first thing you should do if you realise that you cannot pay your council tax is to get in touch with your local authority and tell them. They may be able to alter your monthly payments to something more suitable.
If you are on a low income, benefits, a single person or a student, you may be entitled to discounts or exemptions on your bill. Some adults, for example, those with learning disabilities or mental impairment or live-in carers, don’t count either, meaning you may get up to a 50% reduction.
There is also a discount called a second adult rebate. This is for homes where you live with other adults but you’re the only one responsible for paying council tax.
For people who are experiencing extreme hardship and struggling to pay for essentials but do not qualify for any of the council tax reductions, there is a scheme called discretionary reduction. This means that the local authority is able to reduce or cancel your council tax bill.
To apply for a discretionary reduction, you need to contact your local council directly. They will likely ask for evidence of your circumstances, for example, a budget plan.
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