Council tax bills: what to do if you're struggling
Local councils should stop 'aggressively' chasing council tax debt from those who can least afford to pay, a cross-party group of MPs has said.
The Levelling Up, Housing and Communities (LUHC) committee told the government to remind councils they don't have to demand immediate full payment from people who are in arrears.
Clive Betts, the LUHC committee's chair, said: 'Councils should not rush to escalate collection activity but consider the ability of the individual to pay, avoid causing distress, and signpost suitable debt advice.'
He added: 'Some people may feel pushed into putting their council tax payments ahead of heating and eating – this is deeply concerning and highlights the need for local councils to act responsibly when trying to recover unpaid council tax.'
If you're struggling with your council tax bill yourself, read on to find out what to do.
What happens if you miss a council tax payment
Depending on where you live, council tax could be one of your biggest monthly expenses.
The average annual Band D council tax bill in England for 2023-24 is £2,065 – a £99 increase on the previous year. That's more than £200 a month if paid in 10 monthly installments across the year.
Council tax is considered a 'priority payment', as failing to pay on time can have serious consequences.
If you miss one payment, you'll receive a reminder to pay it within seven days. You'll get the same if you miss a second payment.
After the third missed payment, you'll be asked to pay all outstanding council tax for the year within seven days. If you fail to do this, councils can take what the LUHC committee has called 'aggressive' action, such as sending bailiffs to seize your belongings and sell them to cover the debt. You could even face time in prison if your council takes legal action.
- Find out more: free debt advice contacts
What to do if you're struggling to afford council tax
Naturally, you'll want to avoid this. And there are a few things you can do if you're struggling.
- First, you can contact your local authority to ask about reducing or rescheduling payments. You'll probably need to provide evidence that your savings, earnings or other assets can't cover what you owe.
- You might also be eligible for hardship relief if you're experiencing 'exceptional hardship' beyond your control.
- Finally, you could apply for council tax reduction. The way this works depends on where you live, but you could be eligible if you're on a low income or receive benefits.
In all cases, it's worth contacting your council and checking its website to explore your options.
- Find out more: how to reduce your council tax bill
Could you challenge your council tax band?
There's another way to reduce your council tax bill: challenging your band.
Last year, more than 50,000 people applied to lower their council tax band, and nearly a third of them (28%) were successful. Appealing only backfired for a minuscule 0.1% who ended up in a higher band.
In England and Scotland, your home's band is based on its value in April 1991. In Wales it's April 2003, and Northern Ireland uses the old 'domestic rates' system.
Your tax band could be lowered if your home's original valuation was wrong, or if changes that might alter its band have been made since its valuation. Perhaps it was converted into flats or part of it was demolished.
- Find out more: council tax bands explained
How much council tax will you pay next year?
If you're paying across 10 installments, your final 2023-24 council tax bill will be due in January 2024.
You'll then have a two-month break in paying council tax and you'll find out what you owe for 2024-25 when you receive your new bill in March.
If you live in Scotland, your council tax bill will remain the same until April 2025, after First Minister Humza Yousaf announced a freeze in October.
Last year, the average Band D council tax in England increased by 5.1%. That worked out at an extra £99 over the year, or £9.90 per installment, if paying monthly for 10 months. Figures for 2024-25 increases across all councils will be available in March. But it makes sense to brace yourself for a similar increase regardless.
