Priority debt advice

Priority debt advice: Council Tax arrears

If you have Council Tax arrears they are a priority debt because, once the council has a Liability Order from the Magistrates’ Court, the council has far reaching powers to collect the debt.  

If you have not already made an arrangement to pay, call the Contact Centre on 020 8430 2000.  

You can make a payment online through My Newham

Also, check whether you may be eligible for a Council Tax Reduction (CTR)

You must tell us if you are disabled, seriously ill or otherwise vulnerable. Contact us even enforcement action is already underway. If you have an appointment to discuss how you will pay, take a copy of your financial statement and any other requested papers, such as proof of income. 

How much should I offer to pay? 

Use your financial statement to work out what you can afford. If you get Income Support, income-related Employment Support Allowance, Pension Credit or income-based Job Seekers’ Allowance, ask the council to request direct deductions from your benefit. 
The most that can be taken from these benefits for Council Tax arrears is currently £3.70 a week. If deductions cannot be made from any benefit, the council usually expects considerably more than this. But do not offer more than you can afford. 

Find out more about council tax enforcement

 My debt is with the bailiffs, what can I do? 

The bailiffs do not have the right to enter your home unless someone invites them in or they have been in before. Offer the bailiffs what you can afford. You may need to show them proof of your income, such as a wage slip, letter from the DWP or bank statement, particularly if your offer is low.  

If the bailiffs cannot collect the debt, they will send it back to the council. You should contact the council immediately to make an arrangement and avoid further action. 

How much can be taken from my earnings? 

This is worked out as a proportion of your earnings. The rates are set nationally and the council does not have the power to decide how much is deducted.  It can be high, depending on how much you earn.  

Read about DEA (Direct Earnings Attachment) on the website

What does it mean if the council gets a charging order? 

This can only happen if you own your own home. The debt is secured against your home and it is unlikely that you will be able to sell it without paying the council tax debt. 

What happens if the council makes me bankrupt? 

Bankruptcy can have serious consequences. If you own your own home, it may be sold to pay your debts and bankruptcy fees. 

Could I go to prison? 

If the debt is returned from the bailiffs unpaid, the council can arrange a means enquiry hearing at the Magistrates’ Court. If this happens, it is important that you go to the hearing. Take a copy of your financial statement and any proof you have of your income since you first owed the money. 
The magistrates look at why you have not paid and whether you could have paid at any time since you had the debt. They also look at what you are offering and how long this would take to clear the debt. 

The magistrates most frequently make an order to pay. This means that, as long as you make the payments ordered, no further action is taken. Or, if the magistrates find that you did not pay despite being able to, they can order your imprisonment. 

What can I do if my circumstances then change? 

If you can no longer afford the payments ordered by the magistrates because, for example, you have lost your job or are not getting paid while off sick, contact the Magistrates’ Court and ask for another hearing. When you go to the hearing, take proof of how your circumstances have changed.