In the UK, most individuals who are over the age of 18 and live in a residential property must pay a fee to their local authority for the use of shared services, such as cleaning, lighting, and rubbish collection.
However, the rules can get a little complex when you live alone or with ‘disregarded’ people, making it difficult to know how much you should be paying and, more importantly, if you’re currently paying the right amount.
What is council tax?
Council tax is a payment millions of people are responsible for every year, but many still don’t know where the money goes or what it pays for.
Put simply, council tax is an annual fee you pay directly to your local council for the funding of a range of local services, from libraries and parks to transport and education.
The amount you pay depends on the price your property would have sold for at a specific point in time, the size of your property in relation to others in the area, and the circumstances of the people living at the address.
However, because council tax is based on two adults living at a property, you may be eligible for a discount or exemption if you live alone or with an individual that is not counted for council tax purposes or ‘disregarded’.
How much debt do you have?
How does council tax work?
Every domestic property in the UK falls into a certain council tax band or valuation band that governs how much council tax should be paid by the eligible individuals living there.
In England and Scotland, there are eight council tax bands ranging from A (lowest) to H (highest). In Wales, properties worth over £424,000 are placed into an additional council tax band (I).
These bands were set several years ago with properties allocated based on how much they would have sold for on April 1, 1999 (England and Scotland) and 1 April, 2003 (Wales).
When you move into a property, you will usually be sent a letter outlining your full council tax bill for the year and when payments should be made. Typically, payments are spread across ten months beginning in April before a period of non-payment in February and March.
What can happen if I don’t pay council tax?
Council tax debt is a priority debt, meaning any missed payments should be addressed promptly and before any other debts to avoid serious consequences.
When you don’t pay council tax, your local council will usually give you the benefit of the doubt and send you a reminder notice giving you seven days to make up for the missed payment.
However, you will only receive a maximum of two reminder notices in a financial year. This means that, if you have another late or missed payment, you will be sent a final notice ordering you to pay the whole year’s council tax within seven days.
Failure to make up for missed council tax payments within this time will result in further legal action and your local council can apply to forcibly take the money from your wages or benefits or send bailiffs to your address to seize goods.
Am I eligible for a council tax reduction?
Depending on your financial circumstances, you may be eligible for a council tax discount. Most council tax discounts are automatically applied, but you may still be entitled to a reduction if your financial circumstances have suddenly changed or you recently started living alone, for example.
As previously mentioned, council tax bills are based on two adults living at a property. This means you don’t have to pay as much council tax when you live alone and could be eligible for a single person discount of 25%. Even if someone you lived with moved out several months ago, you will qualify for a discount on your paid council tax from the date they moved out.
Furthermore, some individuals are not counted for council tax purposes even if they live at the property because they are classed as ‘disregarded’ persons. If everyone else you live with is disregarded, you’ll qualify for a 50% discount (unless you’re also disregarded in which case there will be no council tax to pay).
You may be eligible for a council tax reduction if:
- You live alone
- You live with a disabled person
- You live with a student
- You provide at least 35 hours of care per week for someone who is not your partner, spouse, or child
- You live with someone with a severe mental impairment
- You are an apprentice
- You live with someone who is currently in prison
- You are on a low income
“No fuss, just simple, honest advice. Communication is good and they make the process as easy as they can.”
Am I eligible for a council tax exemption?
If you are classed as a disregarded person and live alone, you will usually be eligible for a council tax exemption. This means you don’t have to pay any council tax.
You may be eligible for a council tax exemption if:
- You are under 18
- You are in full-time education
- You are a foreign diplomat
- You are a prisoner
- You are moving into a care home, hospital, or hospice
- You have a severe mental impairment
- You are a member of a visiting armed force
- You are a member of a religious community with no income source of your own (e.g. a nun or a monk)
How long can someone stay without paying council tax?
Because you can get a discount for living alone or with a disregarded person, you might be wondering how long someone can stay without paying council tax.
If someone moves in
If you usually live alone and receive a 25% single person discount, would you still be eligible for a discount if someone moved in on a temporary or permanent basis? The answer depends on who is staying with you and for how long.
For example, if you currently benefit from a reduced rate for living alone but another adult moves in, the single person discount will no longer apply and you must inform your local council as soon as possible. Failure to inform your local council can not only result in council tax debt but also a fine of up to £1,000.
The only exception to this rule if is the lodger is disregarded or usually lives at another property and currently pays council tax on that property. In this case, it’s not likely to affect your single person discount and you can continue making reduced payments as normal.
If you stop paying
If you stop paying council tax but continue living at the property, there can be serious consequences.
Most local authorities will give you a chance to make up for missed payments before taking legal action against you. This will usually involve applying to the court for a liability order which gives them additional powers for collecting the debt. When this happens, you can be visited by debt collection agencies, the court can order you to make payments, and money can be forcibly taken from your wages.
There is help available if you can’t afford your council tax payments. Whether you don’t want to pay or don’t have the funds to pay, stopping your payments will result in further legal action and, in most cases, extra fees added to your total balance.
If you’re a landlord
If you’re a landlord and rent out your home, the rules surrounding council tax are a little different.
For example, if a tenant has moved out of your property but left behind an unpaid council tax bill, you must inform your local council as soon as possible. They will then reach out to the tenant and serve them with a final notice. Failure to inform your local council can result in you being pursued for the debt.
Furthermore, bailiffs will usually visit the last known address of a tenant to recover council tax arrears. So even if you inform your local council that the tenant has moved out, there is still a chance that your new tenant could be visited by bailiffs.
What is the second adult rebate?
If you are solely responsible for paying council tax for your property but live with another adult, you may be eligible for a second adult rebate. This is a form of council tax reduction which can reduce your council tax bill by up to 25%.
Even if your income and savings don’t make you eligible for a standard council tax discount, you could still be eligible for a discount under the second adult rebate scheme.
When you apply for a second adult rebate, your income and capital are not taken into consideration – only the income and capital of the other adult living at the property are considered.
- If their income is less than £191 a week, you will be eligible for a 15% discount
- If their income is between £191 and £248.99 a week, you will be eligible for a 7.5% discount
- If their income is over £249 a week, you won’t be eligible for a discount
- If they receive Income Support, Jobseekers Allowance (income-based), Pension Credit, or Employment Support Allowance (income-related), you will be eligible for a 25% discount
The other adult living with you must also meet the following criteria to allow you to qualify for a second adult rebate:
- Is not liable to pay rent for your home
- Is not responsible for paying council tax on your home
- Is not your spouse or partner
- Is on a low income and is not a disregarded person (e.g. a student or someone with a severe mental impairment)
Debt help tailored to you
From writing off a large portion of your debt, to readjusting your budget, we’ll find a solution that suits you.
How long can I be chased for council tax arrears?
The Limitation Act (1980) outlines how long a debt can be chased in the UK before it becomes unenforceable or ‘statute barred. This essentially means the creditor has run out of time to take legal action against you to get you to pay it.
For most unsecured debts, including council tax, the limitation period is six years. So as long as your local council doesn’t take legal action against you and you don’t acknowledge or pay the debt in six years, you’ll no longer be required to pay it.
However, unlike other unsecured debts, local councils rarely let unpaid council tax slide and will almost always take legal action against you to recover the money owed after a few missed payments. This usually involves your local council applying for a liability order which is a legal demand for payment.
Because of this, you are advised to deal with council tax arrears as soon as possible. Even if you can’t afford to pay what you owe, simply explaining your situation can help you negotiate an alternative repayment plan that both parties are happy with.
What should I do if I think my council tax band is wrong?
The Valuation Office Agency (VOA) is responsible for assessing all domestic properties in England and Wales to ensure they are subject to the correct council tax band.
However, while extra care is taken to ensure individuals are placed in the right valuation band and paying the right amount of council tax, mistakes still happen.
If you think your council tax band is wrong, has been unfairly changed, or there has been a change that affects your property, you must contact the VOA as soon as possible on 0300 050 1501. Most problems can be sorted out over the phone but, in some cases, your valuation band will be reviewed.
Once the VOA has reached a verdict – which can take up to two months – they will contact you with the outcome of their investigation. Sometimes, your home will be placed into a lower valuation band that better reflects its value or your personal circumstances.
However, it is worth noting that if your home is already in band A – the lowest band – the VOA can’t place your home into a lower band and you’ll have to continue making your current council tax payments as normal.
The VOA will also never reach out to you and charge you to change your council tax band so if you are being asked to pay for this service, it is likely a scam.
Common council tax questions
The rules surrounding council tax can be complex to understand, making it difficult to get a straightforward answer to a specific question you may have.
We’ve answered some common questions to help put your mind at ease:
My partner stays over regularly, should they be paying council tax for my property?
If your partner stays over a few nights a week but pays council tax on their own property, they don’t need to contribute towards your council tax payments and your 25% single person discount won’t be affected.
However, if your partner stays over frequently, doesn’t pay council tax on another property, and you share rent, bills, and a bank account, they may be liable for council tax for your property. This also means you will lose your 25% single person discount.
Does my child have to pay council tax if they move home between university terms?
If your child moves back home between university terms, they don’t need to pay council tax as they will still be classed as a full-time student (even if they are over the age of 18).
However, if they have finished a course and are waiting to start another (e.g. after an undergraduate degree but before a postgraduate degree), they may be liable for council tax if they move home on a permanent basis.
Does my child have to pay council tax if they are over 18, earn an income, and live at home?
If your child lives with you and your spouse but is over 18 and earns an income, they will be classed as a third adult living at the property.
However, because council tax is based on two adults living at a property, the amount you are charged won’t change and it will be up to you whether you want to ask for a contribution.
The only time this will impact your existing council tax payments is if you are a single parent and receive a single person discount. When this happens, you will lose your single person discount and you will each become responsible for 50% of the council tax bill.
Conclusion
Council tax is an important consideration for all homeowners and renters in the UK and there can be serious consequences for late or missed payments.
Each property falls into a certain council tax band depending on how much it would have sold for on a certain date. Typically, higher-value properties pay more council tax than lower-value properties.
Depending on your circumstances, you may be eligible for a council tax discount or exemption. Most discounts and exemptions are automatically applied but it is worth checking if you are entitled to a reduction that you are currently missing out on.
Dealing with council tax debt can be daunting, but there is help available. Whether you’re already in arrears or are just worried about future payments, you must inform your local council of any financial difficulties as soon as possible. They may agree to an alternative repayment plan or spread your payments over 12 months instead of 10.
