Council Tax Debt Advice In Scotland

May not be suitable in all circumstances. Fees apply. Your credit rating may be affected.

Free debt counselling, debt adjusting and providing of credit information services is available to customers by contacting MoneyHelper.

I Live in Scotland. How should I deal with Council Tax Arrears?

Missing payments? Worried about falling further into council tax debt arrears? Here’s our guide.

Council Tax debt is a big and growing problem causing more people to seek Debt Help In Scotland. According to the Joseph Roundtree Foundation, two million families struggle to pay Council Tax.

In recent years, Council Tax debt has soared by 40%. And with bills increasing by as much as 15.4% in some areas this year (and by an average of 3.9%) the problems are only set to get worse.

So if you are struggling to pay your bills including Council Tax, what are your options?

Do I have to pay Council Tax Arrears in Scotland?

Yes. Your council tax whether up to date or not, is always classed as a priority debt, which means that the consequences of not paying are serious.

You have to pay Council Tax if you are over 18 and rent or own a home. The bill is based on two adults living together, so there are discounts if you are the only adult in your home. You may also be entitled to a discount or exemption if you are in full-time education, on certain types of apprenticeship scheme, are a student nurse, above pension age or are receiving some benefits.

You can find a full list of Council Tax exemptions here.

I’m disputing my Council Tax banding. Can I refuse to pay?

Martin Lewis has been encouraging people to challenge their Council Tax assessment on the basis that around 40,000 homes are in the wrong band.

You can find out whether challenging your band is possible – and whether it’s a good idea – on the Money Saving Expert site.

But whether you challenge your band or not, it’s important to maintain payments until a decision is made. If your band is subsequently changed, you’ll get any overpayments refunded.

What happens if I miss a Council Tax payment?

In the first few days, nothing. If you’ve missed a payment because you simply forgot, or you briefly went over your overdraft limit but can now make the payment, you shouldn’t face any fines or penalties providing you pay quickly.

14 days after your missed payment your council will send you a letter asking for the money. Providing you pay within seven days of that letter, your monthly instalments should continue as normal, without fines or other penalties, although there may be a temporary impact on your credit rating.

If you don’t pay within the seven days, however, things get trickier.

What happens if I don’t pay my Council Tax?

After the seven days have elapsed, you run the risk of losing your option to pay in instalments. Instead, the council can ask for the entire Council Tax bill for the year to be paid in one payment. You will be given a ‘final notice’ of seven more days to make that payment.

If you still can’t pay – and for most of the people we work with, if you can’t pay one instalment you’re unlikely to be able to find the money to pay the entire year’s bill – you may be taken to court.

Council Tax debt in Scotland – what happens next?

If you can’t pay your bill, the local authority will refer the matter to the sheriff court. The court will send you a letter asking to pay the amount due within 14 days. They’ll also add a 10% fee to your bill.

With the letter you should also receive a ‘time to pay’ form. This is your opportunity to reach an agreement with the court. If you can pay anything towards your bill, you should lay out the possibilities on the form.

• If your offer is accepted the local authority will cease its action (providing you make the payments as agreed)
• If they don’t accept your offer (or if you didn’t respond to the court’s letter) the court will use an ‘arrestment’ to take the money directly from your bank or earnings. Money could also be deducted from benefits
• If those options aren’t viable, the court could order that goods to the value of the debt be taken from your home by sheriff officers (bailiffs). At this point, the sheriff officers’ fees will also be added to your debt.
• If the total debt is more than £3,000, you could be made bankrupt under an order for sequestration

Can I be sent to prison for not paying my Council Tax?

In England you can be sent to prison for non-payment of Council Tax. Although often highly publicised, instances of imprisonment are rare – just 305 people have been imprisoned in the past 6 years.

In Scotland, Wales and NI however, you can’t be imprisoned for non-payment of Council Tax.

I can’t pay. Should I just wait for the inevitable?

No. Doing nothing and waiting for the demand letters (or worse) to arrive is the worst possible choice. If you can’t pay, do the following:

1. Talk to your local council. It’s possible you may be entitled to a reduction you weren’t aware of.
2. Explore any options your council may have to help you. During the height of the coronavirus outbreak in particular, some councils were able to offer payment holidays or payment plans. Some councils may continue to offer this sort of help. Even where no practical help is available, if you believe you’ll be able to put things back on track within a matter of weeks, talking to your council may enable you to avoid court action and retain your ability to pay in instalments.
3. Explore your debt management options – see below.

How can I stop bailiffs from taking my stuff?

Despite what you may have heard, in Scotland sheriff officers with the authority of a court order can force their way into your property if you refuse entry, provided their actions are ‘reasonable’. They could, for example, break down a door or smash a window and if you obstruct a sheriff officer you could be committing a criminal offence.

The only exception to this is where no one in the house is 16 or older, understands English or understands the situation (because, for example, of mental disability). In these circumstances, the officers should return at another time.

Clearly, these situations are extremely stressful. Before sheriff officers arrive at your door you will have faced numerous letters and demands, all of them likely to increase your level of worry.

But you can stop the letters – and the interest payments and fees – by seeking debt advice. And the earlier you do it, the easier things will be.

Can I use a Scottish Trust Deed for Council Tax debt?

Yes. Like a sort of Scottish IVA, a Protected Trust Deed is suitable for all types of unsecured debt, which means you can clear a wide range of outstanding arrears – from credit cards to loans and Council Tax arrears with one low monthly payment.

A trust deed typically lasts four years. Once granted, your creditors can no longer chase you for payment and all interest and penalty payments are frozen, so the debt cannot continue to increase. As long as you continue to meet your single, affordable monthly payment, your remaining debts covered by the trust deed will be written off once the trust deed comes to an end. On average, you could reduce your monthly payments by 60%.

Will my council agree to a Scottish Trust Deed or an IVA?

They don’t have to, but all creditors would prefer to receive something rather than nothing. Even if they refuse, provided half of your creditors (in number) or two thirds of them (in terms of debt value) agree, the trust deed will become protected and even those creditors who didn’t agree to it will be bound by it.

How do I arrange a Scottish Trust Deed or an IVA?

You’ll need to talk to a licensed insolvency practitioner like ScottishTrustDeed.co.uk. An advisor will talk to you about your Council Tax (and other) debt to establish whether a Scottish Trust Deed is the best debt management solution for you.

What other debt options do I have?

A protected trust deed isn’t your only option. You could look at a debt management plan or the debt arrangement scheme (DAS).

In some circumstances, sequestration might be your best or only option.

To find out which option would be right for you, talk to us now.

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