To fund local government services, a council tax was enacted in England and Wales. These taxes are based on the value of the property in 1991 and are divided into eight sections in England rated A-H and nine in Wales, rated A-I. Additionally, rates are also based on the number of adults over the age of 18 that live in the home.
Any adults living in the home over the age of 18 may be held accountable to the Council for payment of these taxes, even if they are not the owner of the property. Joint tenants, partners in a civil union, and married people who are not named on the bill may still be held responsible for the payment. Home owners that do not actually user the home as their residence may also be responsible for the taxes that are due on the property.
Credits and Exemptions
It is a misconception to believe that the Council tax is based on two or more adults living in the home. While the Council may assume that this is true, there are no legal standings stating that this is how they base their taxes. It is believed that this notion comes from the fact that discounts for taxes are provided to individuals that live alone.
Single individuals can apply to the local Council for a discount on their tax based on single occupancy. Additionally, some dual residents may still qualify for this discount if their partner or roommate is considered to be disabled or low-income. Paperwork must be submitted to, and approved by, the Council to receive this discount.
It should be noted that certain student and training programs also qualifies a home for credits to their Council Tax. Check with the taxing authority to see what programs qualify for credits.
You may also be able to qualify for a Council Tax rebate if you meet the following qualifications:
• Low Income and have under a specified amount of savings
• Receive Income Support or Pension Credit
• Job Seekers Allowance or Employment Allowance
• Other Government Issued Benefits Programs.
A Second Adult Rebate Program is also available. This program will provide the main taxpayer with a credit if the second adult living in their home is deemed to be low-income, disabled, or a student in one of the qualifying programs. This credit is not as large as the other rebates offered, so it is important to talk with the Council to see which program is more beneficial to your cause.
A Disability Reduction may also be given to any property owner that has augmented their home to accommodate someone with a disability. This includes installing ramps, widening doors or installing lifts.
If you feel that you have been declined a rebate unfairly, or your home has been placed in the wrong bracket, you can make an appeal to the Local Valuation Agency for a redetermination.
Paying Your Council Taxes
Council taxes should be viewed as a priority debt. In most cases, the Council will allow you to make payments on your bill in ten monthly payments. It is important that you meet these guidelines to prevent any problems with the Council. If you cannot make your payments, pay what you can and apply for rebates or credits. If your circumstances have changed, you may qualify for programs that you could not in the past.
If you fail to make your monthly payments, the Council will petition the Magistrate Court to place a “Liability Order” against you. This order will be for the full amount of the taxes that you owe plus the additional court costs. You will receive a notice of the order and a court date to appear within fourteen days.
If, you believe that there are circumstances that should prevent the court from issuing the order, make sure that you appear at the hearing to state your case. Reasons that the order may not apply may include the debt having been paid, the Council issued the debt to the wrong person, you have currently applied for a rebate, or you can show why you are not legally responsible for the debt. The court does not have to delay the order, but under specific conditions, they may delay until the reasons for the dispute are sorted.
If the Council is given the order per their request, it is very important to make payment arrangements with them as soon as possible. The Council has many ways to collect the debt if you are not willing to make payment arrangements.
If you are employed, the Council can demand that your employer set aside a specific amount from your paycheck each payday to be applied to your tax debt. The amount that is taken each pay date will depend on your earnings. However, it should be noted that they can take a significant amount of your pay to cover your debt quickly.
If you owe more than one years’ worth of Council taxes, the Council can attach two orders to your payroll at a time. This could leave you in financial ruins. If there will be too much hardship, you can request that the Council accept smaller voluntary payments.
If you are not employed, the Council can request the Bailiff of the Court to seize your personal belongings and sell them to cover your debt. While the Bailiffs are prohibited from taking some personal goods, almost anything considered “not necessary” or “of considerable value” can be taken to auction, including your car.
If you are collecting benefits, you can contact the benefit office to see if they will take a portion of your checks and contribute it to your Council tax debt. If they are willing to do so, the Council usually stops all other forms of collections.
If you owe more than £1000 for a single year, the Council can attach the debt to your home. Similar to a mortgage, the debt must be paid off before the home can be resold.
If you owe more than £750, or owe for several years, the Council can force you into bankruptcy. You can fight this by filing with your Local Government Ombudsman and demanding that the Council seek other forms of repayment first.
If all else fails, the Council can issue a request to the Courts to have you imprisoned for your debt. This last resort is one that should be avoided at all costs. While it is unlikely that the court will place you in prison because you cannot afford to pay, if they find that you are deliberately or maliciously refusing to pay, you may find yourself in jail.
If you are required to go to court under these circumstances, you will have to provide proof to the court why you have not paid and your current financial situation.
Council tax should always be seen as a priority debt and all efforts should be made to pay this obligation. Remember to take advantage of any discounts and credits that may apply to your situation to keep your bill low. The Council will always be willing to work with you to ensure that your taxes are paid. However, it is important to understand that they will do whatever it takes to collect those taxes if you are unwilling to make arrangements.