MASSIVE RISE IN COUNCIL TAX ARREARS

FIRST PUBLISHED BY: THE GUARDIAN 

FAILURE TO PAY COUNCIL TAX ARREARS CAN END IN A PRISON SENTENCE.

More people fall behind with Council Tax bills, and average arrears are also up, according to debt counselling charity. The number of people falling behind with their Council Tax rose by more than a quarter in 2011 despite Council Tax freezes across England, a debt counselling charity has warned. 

The Consumer Credit Counselling Service (CCCS) saw a 27% increase in the number of people contacting it for help with Council Tax arrears, from 13,353 in 2010 to 16,958 in 2011. The average amount owed in Council Tax arrears also increased, from £675 in 2010 to £717 in 2011.

The CCCS says much of the increase has been fuelled by the worsening financial position of tenants, with more people who rent than home-owners contacting the charity about Council Tax arrears for the first time. A total of 8,841 renters sought advice on Council Tax debts in 2011, up from 6,084 in 2010.

Tenants and homeowners who fail to pay their Council Tax bills can face repossession and even prison. A 51-year-old woman from Feltham, London, was jailed for 17 days in April for non-payment of Council Tax arrears amounting to £1,985, while five people from the Vale of Glamorgan were jailed for between four days and eight weeks in May.

CCCS director of external affairs Delroy Corinaldi said: "Council Tax is a priority debt and non-payment of it can have very serious consequences. The financial squeeze is causing more and more households to fall behind with their Council Tax bills, and this is a problem we expect to get worse over the coming year.

"Anyone who is struggling to keep up with their Council Tax bills should contact their council to discuss the problem and check that they are receiving any discounts or rebates to which they may be entitled. If you are struggling to cope you should also seek free advice from a debt charity like CCCS as early as possible."

The findings follow warnings from the Institute of Fiscal Studies that coalition plans to scrap the existing Council Tax benefit system, which provides discounts for those on low incomes, and to cut the amount spent on such benefits by 10% could be undermined by giving local authorities the power to decide who should get financial help from 2013.

Council Tax benefits for pensioners will be ring fenced. The IFS said this would result in much higher cuts to benefits for working-age households in areas where there was a high proportion of older claimants. It added that the 10% cut would force councils to choose between making significant cuts to working-age claimants' benefits, cutting services or increasing Council Tax.

Council Tax benefit is claimed by 5.9 million low income families, more than any other means tested benefit or tax credit in the UK. What to do if you are struggling with Council Tax payments Contact your council to discuss the problem – it may let you spread your payments over 12 months instead of 10 to reduce the amount due each month

Check if you qualify for a discount or exemption: a full Council Tax bill is based on at least two adults living in the household, but many people get exemptions, including student nurses, full time college and university students and live-in carers looking after someone who is not their partner, spouse or child. Even if you are not eligible for a regular discount, your council may be able to award you a one-off discount in cases of extreme hardship.

If you have already missed payments, work out how much you of the arrears can afford to repay each month and offer to make regular payments to the council. Only offer what you know you can keep up with: if you renege on these payments or fail to come up with an offer, the council can ask the local magistrates court for a liability order – a demand for the full amount you owe, plus costs.

Do not ignore a liability order – this could lead to deductions from your wages, the use of bailiffs, bankruptcy or repossession of your home. 

In extreme cases, it could even lead to a prison term.

Contact one of the free debt counselling services, including the CCCS, Citizens Advice or National Debtline, for advice.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

ARE YOU PAYING TOO MUCH COUNCIL TAX - CHECK HERE?