Need help? Advice during COVID-19 crisis Benefits Advice and Financial Support Council Tax Debt This guidance is also available in PDF form If you have council tax debt, there are various steps you can take to make your debt more manageable. Being in council tax debt can feel overwhelming but it is important to manage your council tax debt because not doing so can have serious consequences. This resource will explain some of the things you can do to manage your debts, which will make it easier to stay on top of payments. It is important to remember that no matter which stage you are at in the process, you can contact the council to discuss ways to pay. For example, if you have received a court summons, you can still contact the council to discuss your situation. This first section will explain some of the steps you can take in order to deal with your council tax debt. Some will be available automatically while others will depend on your situation. The steps explained here are: 12-month instalments Changing the payment date Applying for discounts Ensuring payments are made correctly Change payment method This is followed by a section which focuses practical tips for talking to and dealing with the council. 1. 12-Month instalments You have the right to ask for your council tax bill to be spread across 12 months. The council will ask you to pay your council tax bill in 10-month instalments. For example, if your council tax bill is £1000, they will ask you to pay £100 every month for 10 months. You can ask them to change this to 12 months. By spreading your bill across 12 months, each monthly instalment will be less. For example, if your council tax bill is £1000, you will pay £83.3 each month for 12 months. While the yearly amount is the same (£1000), reducing the monthly payment can make your bill more manageable. The 12-month instalment is available regardless of your income, size of property and other factors. 2. Changing the payment date You also have the right to change when your council tax is due each month. The starting point is that each monthly payment is due on the first of each month, for example the 1st of April. You can change this to a date which suits you better, for example if you get paid in the middle of the month. For example, you can change the payment dates from the 1st to the 30th. Changing the payment date can also be useful if you have to make payments towards previous council tax debts, which are due towards the end of the month. Having to pay off council tax debts on the 30th of March, and then to pay your current council tax bill on the 1st of April can be difficult or even impossible. Changing your payment date to for example 31st of April means you have time to arrange your budget. You have the right to change when you have to pay council tax. If it is easier to pay on the 10th or 25th of each month, instead of the 1st, contact the council. Case Example Lucas just received his council tax bill for the year 2019/2020. The bill says he has to make payments by the 1st of each month. Lucas also has to pay £20 by the 30th of each month to pay off previous council tax debt. To avoid having to pay £20 on the 30th of March and then council tax on the 1st of April, Lucas contacts the council to change the council tax payment date from the 1st to the 10th of each month. Your situation, for example when you get paid or receive benefits, will determine when it is most manageable to pay council tax. It can be helpful to make an overview of your budget for each month, listing income and expenses. 3. Applying for discounts/exemptions There are a wide range of discounts and exemptions available, which can reduce your current council tax bill significantly. Whether you are eligible for these discounts depends on your situation, for example your income, the size of your property, whether you receive benefits like Universal Credit or Job Seeker’s Allowance, whether you live alone or with others. Some of the discounts/exemptions available are: Council tax support Single Occupier’s Allowance Disabled Person’s Relief The discounts/exemptions will only reduce your current council tax bill, and not your debt. But, if you should have received a discount or exemption before you apply for it, for example if you have received benefits for several years, you can have the Council Tax Support backdated. Central England Law Centre has a separate guide to council tax deductions and exemptions 4. New payment arrangements If you have council tax debt, you can talk to the council about how much and how often you are able to pay off your debt. Paying something off your debt each week or month is better than paying nothing. The council also prefers that you pay something rather than nothing and will be willing to discuss alternative payment arrangements with you. Please refer to the practical section of this resource below for more guidance on how to talk to the council about this. When talking to the council, it is important to clearly explain your situation to them and be clear about how much you can pay. Again, it is better to pay something than nothing. So, for example, if you figure out that you can pay £5 a week towards your council tax debt, tell the council this. Don’t agree to payment arrangements that you won’t be able to follow. This can lead to further debts. If the council suggests a payment plan which requires too high payments, explain your situation to the council and suggest an amount you will be able to pay. You can contact the council to discuss payment arrangements at any stage of the process. 5. Make payments correctly If you are paying for council tax arrears and have agreed a payment plan with the council, it is very important to make council tax payments and payment plan payments correctly. If you don’t pay the right amounts, you could risk not paying towards your current council tax bill at all. If you have agreed a payment plan with the council to pay off council tax arrears, you need to make this payment separately from the payment towards your council tax bill. If you pay them together, everything will go towards your arrears and nothing towards your council tax bill. For example, if your council tax bill is £20 and you pay £25, wanting £5 to go towards your arrears, actually the whole £25 will go towards your arrears and nothing towards your council tax bill. This can lead to further debt. If you want to make payments towards your arrears, you must agree this with the council. The easiest way to do this is to make separate payments for arrears and council tax. You can also contact the council each month and tell them that you intend to pay towards your arrears AND council tax in the same transaction. If you don’t tell them, the council will assume that the whole payment is for your arrears. Case Example Tony has £200 in council tax arrears. His current council tax bill is £20 each month. In May, he pays £30 to the council, intending £20 to go towards his council tax bill and £10 to go towards his arrears. After a short while he receives a council tax reminder from the council which says he hasn’t paid council tax. This is because he made payments for council tax and council tax arrears together and everything went towards his arrears. He has therefore not paid council tax for May. If you have council tax arrears, pay towards these separately from council tax bill payments. If you pay them together, you risk not paying for your council tax bill because the council assumes everything goes towards your arrears. If you are unable to pay both your council tax bill and the payment plan for your debts, paying your current council tax bill will prevent further debt. If you are struggling to pay off your debt, contact the council to arrange a new payment plan. Practical tips Much of your communication with the council might be via the telephone and you might find there is a long wait when you try to call the council. It is good therefore to prepare for the call in order to make the most of your time talking to an advisor. This section will provide you with some handy tips for the different stages of making the phone call. Before the call Making the call After the call Before the call You have a really good opportunity to prepare for the call before you make it. You can best prepare by doing the following: Find a council tax letter with all your details on so you can quickly provide these during the phone call. You will need to provide the council with details such as your customer reference number/your address. Think about why you are calling and rehearse your opening line to them. This is the first thing you will say to them and being clear will help the council to understand why you are calling. See the section below for an example of an opening line. Rehearse explaining your circumstances. Explaining your circumstances effectively will help the council to understand your financial situation. See the next section below for an example of how to explain your circumstances. See Citizen's Advice for a good budgeting tool: You can enter your earnings and all expenses you have. It will prompt you to think of all possible expenses from bills to birthday presents. When you have finished entering all your finances it will show you exactly how much you are spending each month. It also provides you with some handy tips of how you can cut costs in your household. Write down your income and your budget of how you plan to spend your money if you are calling regarding debt repayment. This will allow you to have a figure in mind of what you can repay each month and you can even break your budget down to the council by reading aloud your budget to them. Rehearse what you will do if the council are not understanding your situation. Practice what you will say if you are feeling flustered at any point during the call so that you can take some time to think clearly. See below for how to deal with this kind of situation. 2. Making the call A. Opening: Firstly, try to catch the person’s name who you are speaking to and write this down as you listen. This is in case you need to reference the call in future. Make a strong start to the call by having a clear opening line. Example: If you are asked by the council “How can we help?”, you might respond: “I would like to lower the payments for my council tax arrears as I am struggling to pay my debt at the moment”. Or “I would like to apply for a council tax reduction as I am a single person occupier”. (See the council tax deductions and exemptions leaflet for more information on reductions in council tax) B. Explaining your circumstances: Whatever your personal circumstances are, it is a good idea to explain these to the council so they can see the bigger picture for you. If you are struggling financially, do not be afraid to tell the council. Example: If you are asked “How much can you afford to pay?” you might respond: “I can only pay £10 per week at the moment, I am on a low income and have to pay for rent, gas, electric, water. Anything left over must go towards my bus travel to work, food shopping for 3 children and myself as well as buying anything the children need, money is really tight.” If you can give figures to illustrate this could be good for the council to best understand your financial situation. You might not always be prompted by the council to explain your circumstances, but you should do so anyway. Example: The council might tell you that you need to pay them a certain amount per month. If you do not feel like you can afford the amount they are suggesting, try explaining your circumstances to them like in the above example. C. What to do if they do not understand your side: If the person you are talking to does not wish to adjust the payments to suit your needs, it might be best to tell them you will call back another time. Make it clear that you are not agreeing to anything until you have thought your finances through. Example: “I’m sorry, I do not think I can afford to pay the amount you are suggesting. I will think through my budget, seek advice and call back another time”. You can then take time to think about your budget again and see if there is anyway you can afford to pay. D. Ending the call: If you have agreed a payment plan and are happy you may wish to ask for a quick summary to clarify everything you have agreed. If you plan to call them back another time, explain this to them. It could be a good idea to ask for the person’s name who you spoke with if you did not catch this at the start of the call. Example: “To clarify, you are willing to accept £45 per month from me for the next 10 months to clear my debts?” “Please could you remind me of your name?” 3. After the call After the call it is best to make a note of who you spoke to, the date, time and what you spoke about/agreed. Write this down in a safe place in case you need to reference the call in future. You should be able to say I spoke to [name] about [what you spoke about/agreed] on [date] at [time]. Example: I spoke to Regina on the phone and agreed a payment plan of £45 per month for my council tax arrears on 12th August 2019 at 3pm. Remember to note: Who, What, When Where to get help If you are struggling with council tax debt, there are a number of organisations you can contact to get help with budgeting, contacting the council and general advice. These can offer free and confidential advice. Central England Law Centre (https://www.centralenglandlc.org.uk/, 02476 223 053) Coventry Independent Advice Service (covadvice.org.uk, 0247 652 1100) Citizens’ Advice (https://www.coventrycitizensadvice.org.uk/, 0344 411 1444) Money Advice Service (moneyadviceservice.org.uk, 0800 138 7777) It is natural for debt to be on your mind and cause worries. However, if it is negatively impacting your mental health you should seek the appropriate help. You can visit your GP or you can contact a help line who will listen to what you are going through. SANE(http://www.sane.org.uk/support call 0300 304 7000 open 4.30pm-10.30pm all year round) SANE provide emotional support for anyone who is affected by mental illness. Samaritans (https://www.samaritans.org/ call 116 123- open 24 hours, all year round) They will listen to your situation and try to work with you to help you through it. CALM (https://www.thecalmzone.net/ call 0800 58 58 58- open 5pm-midnight all year round) The Campaign Against Living Miserably is aimed at men who are in need of support on any matter. MIND (https://www.mind.org.uk/ call 0300 123 3393 open 9am-7pm (except bank holidays) Mind provide information on dealing with mental health issues.