How a missed council tax bill of £167 can end up costing you £2,065

IF you miss your first £167 council tax payment of the financial year you could see the size of your debt balloon to a whopping £2,065 in just nine weeks.

That's according to new figures from Citizens Advice which based its calculations on typical costs in England.

The charity says the problem is that when someone falls behind on their council tax payments they can be forced to pay the rest of their annual bill after only two weeks, which could amount to £1,671.

To make matters worse, two fees are then added on top of the original tax debt: court costs, which are typically £84, and bailiff fees, which are commonly £310.

This leads to a total debt of £2,065 in just nine weeks – a massive 15 times more than the original council tax payment.

Citizens Advice reckons that across England and Wales over £560million in fees was added to people's council tax debt in 2016/17 alone, including £300million of bailiffs' fees.

What is council tax?

HOW much council tax you pay each year depends on how much your property was worth on:

  • 1 April 1991, for England and Scotland
  • 1 April 2003, for Wales

Band A represents the lowest value of a home, while band H in England and Scotland and band I in Wales represents the highest value.

You can check your council tax band here, but a £300,000 house in England or Wales, for instance, would be in band G while in Scotland it would be in band H.

Council tax is different in Northern Ireland.

Last year, the charity helped more than 96,000 people in England and Wales struggling to make their council tax payments.

The charity claims "outdated and punitive" regulations are encouraging local authorities to collect debts aggressively.

It's now calling for an end to people having to stump up their entire bill after one missed payment and instead believes affordable repayment plans are the solution.

The charity also wants to see councils recouping debts without resorting to court – which costs the consumer.

On average, Citizens Advice clients in council tax debt have just £14 a month in disposable income.

Earlier this month, the Government pledged to improve the way council tax is recovered.

The Ministry of Housing, Communities and Local Government (MHCLG) says it will work with charities, debt advice organisations and local authorities on changes to improve the system.

Is anyone exempt from paying council tax?

IF you are over the age of 18 and either own or rent your own home, you must pay council tax.

But if you live on your own, or only live with a child and no other adult, you can get 25 per cent off your bill.

You’ll usually get a 50 per cent discount if no-one living in your home, including you, counts as an adult.

Full-time students and apprentices don't have to pay any council tax.

People with a severe mental disability are also exempt, as are people who are caring for someone with a disability who is not a spouse, partner, or child under 18.

Councils can give furnished second homes or holiday homes a discount of up to 50 per cent.

You’ll usually have to pay council tax on an empty home, but your council can decide to give you a discount.

Gillian Guy, chief executive of Citizens Advice, said: "By forcing local authorities to use rigid and outdated collection processes, council tax regulations make it harder for people to pay their original debts instead of helping them to get their finances back on track.

"Through its council tax collection review, the Government must fundamentally reform the regulations governing how local authorities collect debts.

"Punitive processes such as charging a full year's bill after a single monthly payment is missed show how broken the system is – they both tie the hands of councils and force people into debt."

An MHCLG spokeswoman said: "While council tax collection is essential to running public services, we expect councils to be sympathetic to those in genuine hardship and proportionate in enforcement.

"We are working on making the council tax collection system fairer and more efficient – so people are still treated with compassion while raising funds for public services."

For more information, check out our guide on what’s your council tax band, how to claim a refund, who’s exempt from paying and how you can challenge your band.

Homeowners have seen council tax hikes of more than £100 this financial year.

Plus, here's why YOU could be in line for a huge council tax discount of up to 100 per cent.

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