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Dealing with council tax arrears

Council tax arrears are when you have missed council tax payments, and you owe money to the council. At Lowell, we know that it can be complicated to understand the many different types of debt. In this guide, we’ll detail what council tax debt is, what happens if you miss a payment and how you can contact the council to discuss your arrears. We’ll also look at where to seek advice. 

In this guide, we'll be covering the following:

This content is intended to be an impartial guide regarding council tax debt. Lowell Financial Ltd does not offer financial advice. You can find out more about the organisations you can contact in our guide on debt help and support.

What does council tax arrears mean?

Council tax is a yearly fee you pay to your council which funds various services such as libraries and rubbish collection. The amount you have to pay will be determined by your local council.

Council tax arrears, which can also be referred to as council tax debt, are when you miss a council tax payment. To be in ‘arrears’ for council tax means that you owe money to your council.

It’s worth noting that in Northern Ireland, taxes are referred to as ‘rates’. Both just refer to the same system of local councils collecting money.

Is council tax a priority debt?

Yes, council tax is classed as a priority debt as local councils can take legal action to recover unpaid amounts.

Priority debts can cause serious problems if you don’t do anything about them. This means that if you have a priority debt, you should focus on paying it off before other non-priority debts like credit cards or catalogue debt. You can learn more about which types of debt are classed as priority and non-priority debts in our guide on clearing and paying off debt.

If you have more than one outstanding priority debt, you can speak to independent organisations such as Citizens Advice for expert advice on working out which debts to deal with first.

What happens if you can't pay your council tax?

If you’re struggling to pay your council tax, get in touch with your local council as soon as possible and explain your situation. They may let you pay in smaller amounts based on what you can realistically afford each month.

Let them know if these payments would leave you unable to afford to cover essential costs each month, like your rent or mortgage. You may also be able to get a reduction in your council tax bill if you’re on a low income.

The most important first step is to speak to your council and be honest about what you can afford. They’re there to help, and the sooner you get in touch, the more options you’re likely to have. 

What happens if you miss a council tax payment?

If you happen to miss a council tax payment, the council will send you a reminder notice around two weeks later. This reminder notice will explain that you have seven days to pay the missed payment.

If you don’t pay the missed payment in full within 7 days (or if it’s the third time you’ve been late with council tax payments within one financial year), you’ll instead be sent a ‘final notice’ explaining that you now owe the full council tax amount for the year and that you have seven days to pay this.

You’ll receive two reminder notices maximum for missed council tax payments each financial year. The financial year, also known as the ‘tax year’, runs from the 1st of April until the 31st of March the following year.

What happens if you don't pay off your council tax debt?

Councils usually try to recover council tax arrears within the same tax year, and they do have legal powers to help them do this. But it’s important to remember that they’ll usually work with you to find a solution if you’re open about your situation.

If you don’t contact your council or fall behind on an agreed payment plan, they may take further action to recover the debt. This could include:

  • Applying for a liability order through the court
  • Arranging for bailiffs (also known as enforcement officers) to visit your property
  • Taking payments directly from your benefits
  • Setting up an ‘attachment of earnings’ (AOE) to take payments straight from your wages
  • Applying for a Charging Order to secure the debt against your home, if you own it
  • In rare cases, applying to declare you bankrupt (only if the debt is over £5,000).

In very serious cases, where someone is found to have deliberately refused to pay and other recovery efforts haven’t worked, a court could issue a prison sentence of up to three months – but this is extremely rare.

The important thing to remember is that there’s help available, and the earlier you speak to your council, the more likely it is you can avoid this kind of action. You’re not alone and taking that first step can make a big difference.  

What is a council tax liability order?

If you don’t pay the whole year’s council tax within seven days of the final notice, your council may take legal action to recover the debt. This involves applying for a liability order from the courts.

A liability order is a legal demand for payment. Having a liability order means that your council can collect any unpaid council tax in several ways, such as the following:

  • Taking money directly from your benefits
  • Deducting money from your earnings
  • Sending bailiffs (enforcement officers) to your property
  • Taking bankruptcy action against you
  • Taking you to court which may lead to being sent to prison for up to three months

Your local council should only look into a liability order as a last resort after exploring all other options. This could include offering you an affordable payment plan or allowing you enough time to apply for a Council Tax Reduction if you’re eligible. We’ll explore these other options further in the next section on ‘help with council tax debt’.

Can bailiffs (also known as enforcement officers) force entry for council tax debt?

No, bailiffs are not allowed to force entry if they’re collecting council tax debt.

However, your council can still send bailiffs, also known as ‘sheriff officers’ in Scotland, to your property to try and collect council tax debt. You will receive letters in advance letting you know that bailiffs will be sent.

To stop bailiffs visiting your property, you can pay out the debt that you owe or contact your council to sort out an alternative payment plan. You can read our guide dealing with bailiffs for more information on this process.

Can council tax debt be taken from Universal Credit?

In short, yes. Council tax debt can be taken from Universal Credit as well as other benefits, including Income-based Jobseeker’s Allowance (JSA), Income-related Employment and Support Allowance (ESA), Income Support, and Pension Credit.

Can the council take money out of my wages to pay council tax arrears?

Yes, a council may use an attachment of earnings order (AOE) to take payments directly from your wage and pay it towards your council tax debt. This will work in a similar way to national insurance as the money will be taken before you receive the rest of your wage.

When it comes to how much can be taken, this will be a fixed percentage based on your earnings. A court will review your current financial situation and work out how much you should pay.

The council should try to arrange a payment plan with you before they send you an AOE. This gives you a chance to pay back what you owe, with a set amount each month. If your council sends you an AOE before offering a payment plan or while you’re following a payment plan, you can make a complaint to the Local Government and Social Care Ombudsman. 

Changing the amount you pay on council tax arrears

If the council is taking money directly from your wages through an AOE, but you don’t have enough money to live on, it’s important to get in touch with them. Let them know what you can realistically afford, and they may agree a payment plan with you that reduces the amount you pay each month. 

If you change or leave your job but are paying council tax arrears from wages

If you leave your job, your AOE will be paused, as you’ll no longer be receiving wages for the council to take payments from. But this doesn’t mean the debt is cancelled or forgotten. The order is still in place and will restart when you begin earning again.

When you get a new job, you have 14 days to let the council know:

  • Your new employer’s details
  • How much you’re earning

The council will use this information to work out the correct percentage to take from your wages under the AOE. Once that’s done, payments will begin again through your new employer.

It’s really important to inform the council within the 14-day timeframe – failing to do so could lead to a fine as it’s a legal requirement.

You may be able to ask the council to cancel the order if you’re out of work for a long time. While this is up to the council, it’s worth discussing with them, especially if your situation has changed significantly.  

Help with council tax debt

When it comes to debt, you don’t have to deal with it alone and there are various ways you can get help with council tax arrears if you’re struggling.

Speak to your local council

If you’re struggling with your finances and can’t afford your council tax payments, you can speak to your local council and explain your situation.

Each council works differently and will have its own processes in place. Once you reach out to them, they’ll be able to discuss potential options directly with you.

Depending on your circumstances, you might be able to pay off your council tax in smaller amounts through a payment plan.

Check if you can pay less on council tax

Alternatively, if you’re on a low income, you may even be able to apply for a reduction, sometimes called council tax support. This means that the amount you owe could be reduced by up to 100%.

There are a number of factors which will affect your eligibility for a council tax reduction. This includes:

  • Where you live
  • Personal circumstances (e.g., your income, number of children, benefits you receive)
  • If other adults or children live with you
  • Your household income which includes savings, pensions, and your partner’s income

You may be eligible for a council tax reduction if:

  • You receive certain benefits
  • You live alone
  • You’re on a low income
  • You’re in full-time education
  • You’re under 18 years old
  • You’re a student nurse
  • You have a learning disability

You can find out more about applying for a council tax reduction on the official GOV.UK website.

Seek expert advice from organisations

We understand that dealing with debt can leave you feeling overwhelmed, and you might be unsure what to do next. However, you don’t need to figure this out on your own.

There are lots of independent organisations out there, such as National Debtline and StepChange, who are ready to offer you free expert advice based on your situation. See our independent debt advice hub for links to all the different organisations you can reach out to.

Once you reach out, they’ll be able to advise you on possible options, including what to do if you’ve got multiple debts in your name. They’ll also be able to explain the different debt solutions that you may be able to apply for. 

Work out your monthly budget

If you’re struggling to keep up with your council tax, it might be that your finances are out of control. This is where creating a budget can help as it will highlight exactly where your money is coming from and going. You might even be able to find areas where you can save money each month.

Whether you’re a Lowell customer or not, you can use our budget calculator tool to get a clear overview of your finances. Once you have this information, you’ll be able to figure out a budget that works better for you going forward.

Once you know your budget, you can make a payment offer to your council before they set up an AOE. They’ll review your offer and decide whether to accept it. 

Tell the council you're getting council tax debt advice

Let your council know as soon as you start getting advice about your council tax debt. Knowing that you’re taking steps to deal with the situation can encourage them to work with you and be more open to any payment offers you make. 

How many years can council tax debt be chased?

Council tax debts are an ‘unsecured debt’. This means that they become ‘statute barred’ or ‘prescribed’ after six years.

Unlike some other debts, simply talking to the council or asking for information won’t restart the six-year clock. You can get advice, make a complaint, or ask questions without affecting the time period.

However, if you acknowledge the debt in writing after the six years have passed – for example, by making a payment or confirming you owe the money - the time period could be restarted.

If you’re unsure whether a council tax debt is still enforceable, it’s a good idea to get independent advice. You can read our guide on statute barred debts to learn more about how this works.

Can council tax debt be written off?

In very rare and specific circumstances, council tax debt can be written off by your council. This is known as ‘discretionary relief’.

There are only certain circumstances in which a council will consider writing off your council tax debt. This includes:

  • Your home can’t be lived in due to fire or flood damage
  • You don’t have any money spare after taking typical living costs into account
  • You have serious ill health, this can include mental health conditions

Alternatively, you may be eligible for a debt solution that can include this type of debt. For example, a debt relief order can include council tax debt. Other potential debt solutions include: 

  • Individual voluntary arrangements (IVAs)
  • Protected trust deed

To find out more about the best next steps for you, you can speak to independent organisations, such as National Debtline and StepChange.

Can you sell a house if you owe council tax?

If you’re planning on selling a house and owe council tax, this might complicate things. This is because you’re still liable for any council tax payments up until the date when you can prove that you’re no longer the property owner.

Whilst you’re still able to sell a house, this doesn’t write off your council tax debt. You’ll still be responsible for this debt, and your local council can still take steps to recover the outstanding balance even after you’ve sold the home.

Do Lowell buy council tax debt?

No, at Lowell we don’t purchase council tax debt.

However, we do purchase other types of debt including loans, overdrafts, credit cards, and catalogue debt. You can read our guide on debt purchasing for more information on how this all works.

We understand that being contacted by Lowell for the first time can be daunting but we’re here to support you and work together. Once we hear from you, we’ll be able to set up an affordable payment plan that you can keep up with. When you set up a payment plan with Lowell, we consider all other debts outside the payment plan – including council tax arrears – to make sure your monthly payments are affordable.

If you’ve got any questions or concerns about your Lowell debt, please get in touch with our friendly team who can help you find the best way forward. Alternatively, you can manage your payments through our very own mobile app.

You can find more helpful guides on debt-related topics like this, as well as information on how we work here at Lowell, over on our Debt Guidance Hub.

First published: 28th March, 2024

Edited: 6th June, 2025