Council Tax Arrears and Discounts

Did you know about council tax discounts?

Council tax is a type of local taxation that is collected by local governments. It is a tax on domestic property, but the rules governing who must pay it are complicated. There are properties that are exempt from council tax because no one lives in them because they are in poor condition, or because the people who live in them are exempt from paying council tax. Some people are exempt from paying council tax. Some people are liable to pay it but get a discount. Discounts can be given to single-person households, disabled people, and students as well as some other groups.

You’ll usually have to pay Council Tax if you’re 18 or over and own or rent a home.

A full Council Tax bill is based on at least 2 adults living in a home. Spouses and partners who live together are jointly responsible for paying the bill.

You’ll get 25% off your bill if you count as an adult for Council Tax and either:

  • you live on your own
  • no-one else in your home counts as an adult

You’ll usually get a 50% discount if no one living in your home, including you, counts as an adult.

You will not have to pay any Council Tax if everyone in your home, including you, is a full-time student.

What are council tax arrears?

The amount of council tax you pay is based on the value of your home and the number of adults that live in it.

Only people over the age of 18 will be forced to pay the bill. If there is more than one person over the age of 18 living in your house, the owner is usually responsible for paying the bill.

If you’re married, live with your partner, or are in a same-sex civil union, you and your partner will be jointly responsible for the entire bill. The legal term for this is ‘joint and several responsibilities.’ Joint tenants, joint owners, or partners are jointly and severally liable if their names appear on the initial council tax bill. If a joint tenant, joint owner, or couple member is not listed on the bill, the council may send out a new bill with their names on it. After the council has completed this, they will request payment from those listed on the bill.

Once you’ve missed a council tax payment, you’re now in arrears meaning you now owe your council money. If you ignore your council tax arrears there’s a good chance that you will be taken to court. You will have to pay any fees that have occurred. This can lead to an increase in your bill by hundreds of pounds.

What if you can’t pay your council tax

If you can not pay your arrears, you can ask your council if they’ll let you pay your council tax in smaller amounts. You will most likely be asked to stick to a monthly payment schedule and if you’re on low income or a reduced wage, you may be eligible for a Council Tax reduction or discount.

If you don’t pay within 7 days of the final notice your council will then take steps to collect the debt from you. This is a liability order. A bailiff could be sent to your door and your wage could be arrested.

The court can also take money from benefits payments like:

  • Universal Credit

  • Jobseeker’s Allowance

  • Income Support

  • Employment and Support Allowance

  • Pension Credit

How a trust deed can help

In Scotland, council tax arrears are used in trust deeds and these debts also appear on people’s creditor lists.  Local authorities are quick to employ aggressive debt collection methods. Dealing with debt can become an urgent priority in this situation as a trust deed can prevent (or stop) council tax debt enforcement. Your money adviser will calculate an affordable repayment amount after essential living costs have been accounted for. This sum will be divided between creditors at the agreed ratio once they’ve accepted the proposal. As long as you keep up this repayment, any debt remaining at the end of the term will be written off, leaving you debt-free. During this time, the creditors included in your trust deed are unable to take legal action to recover their money. You then can focus on improving your financial situation with less pressure.

The benefits of a trust deed are

-You can ultimately become debt-free

up to 81% of your debts can be written off

Don’t need to set up a Protected Trust Deed yourself

You make regular payments which are convenient and easier to budget for

–  You Can generally retain your assets

-Your creditors will ultimately stop contacting you

– The consequences are less far-reaching than bankruptcy or sequestration

– Fees are affordable and regulated

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