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The ongoing cost of living crisis has meant more people are seeking out ways to save money on their essential household bills, including council tax. From moving back in with parents to temporarily living with a partner, splitting finances can lead to significant savings.
However, the rules around council tax can be quite complicated, and even a slight change in living arrangements can have a big impact on how much you pay towards council tax every month.
In this guide, we’ll outline everything you need to know about paying council tax, including how long someone can stay without paying council tax and how your council tax bill may impacted if your circumstances change.
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Council tax is a monthly fee all adults aged 18 and over in the UK must pay if they live in rented or owned accommodation and have no special circumstances, e.g. are disabled or a student.
Typically, payments are spread over 10 months (April to January), before a payment break in February and March. However, depending on your circumstances, you may be able to lower your monthly payments by spreading them over 12 months instead of 10.
Your council tax payments are based on several factors, including the value your property would have sold for on a specific date (April 1, 1991, for England and Scotland and April 1, 2003, for Wales) and how much your local council needs to fund its services.
There are eight council tax bands in England and Scotland from A (cheapest) to H (most expensive). Wales follows a similar system but has an additional council tax band for homes valued at £424,001 and above.
The Valuation Office Agency (VOA) is responsible for assigning council tax valuation bands for domestic and commercial properties in England and Wales. Scottish Assessors decide the valuation band a property falls under in Scotland.
Council tax pays for a range of local services and amenities, such as:
When you move into a property (rented or owned), you will usually receive a letter from your local council outlining everything you need to know about your council tax payments for the coming year.
This letter will contain information on how and when payment should be made, which valuation band your property falls under, and whether you’re eligible for any discounts or reductions based on your personal circumstances.
However, if you have recently moved to a different council area, you may need to contact both your former and current local authorities to inform them of your change of address. The sooner you do this, you less likely you are to be chased for late or missed payments.
Typically, one person per household over the age of 18 (known as the liable person) is responsible for paying council tax.
Couples living together (whether married, cohabiting, or in a civil partnership) will be jointly liable and severally liable for council tax payments, meaning they are responsible as a couple but also individually, even if there is only one name listed on the bill.
However, while it is usually the responsibility of someone living in the property to pay council tax, the owner of the property will become liable if:
To qualify for a council tax reduction, you must meet one or more of the following conditions:
You will usually qualify for an exemption in your council tax payments if:
Because council tax is based on two or more people living together, your council tax bill shouldn’t change if another adult moves in.
However, if you or someone else you live with receives a discount or reduction, this can change the amount of council tax your household will be required to pay.
For example, if you have a guest staying with you for a few nights but they have a permanent address elsewhere where they live the majority of the time, there is no need for them to pay council tax for your property.
Additionally, if someone has moved in with you temporarily but continues to pay council tax on a rented or owned property they live in the rest of the time, they are not required to pay council tax for your property.
The only time someone else may be eligible to pay council tax for your property is if you receive a 25% discount for living alone but another liable person moves in on a long-term basis. When this happens, you must inform your local council of your change of circumstances as close to their move-in date as possible to give them a chance to amend your council tax payments going forward.
Some people think that by not informing their local council of their change of circumstances, they simply won’t know any different. However, if your local authority was to find out someone else was living at the property while you were still claiming a single-person discount, you could be expected to pay up to £1,000 in backdated underpayment debt.
The rules surrounding council tax payment can be complicated and every case is unique, so here are some common scenarios to help you understand:
Even if your child is over the age of 18, they’ll be exempt from paying council tax as long as they’re still in full-time education and are only staying with you until university resumes.
However, if you’ve finished a course and are waiting to start another, you may be liable for council tax (e.g. if you’ve just completed an undergraduate degree and are waiting to start a postgraduate degree).
Unfortunately, taking in a lodger may lead to you losing your single-person discount. This is because you are no longer the only liable person living at the address.
The only time you may be able to keep your single-person discount is if the lodger is a full-time student, claiming certain benefits, or paying council tax on another property.
Because a typical council tax bill is based on two or more adults living together, the amount due won’t change if another adult lives there and the council tax bill your parents receive won’t change.
However, if more than one family lives at the address or you are moving in with one parent who currently receives a 25% single-person discount, they will lose their discount when you move in.
Just because someone you live with isn’t required to pay council tax, it doesn’t necessarily mean you’re also exempt.
For example, if the other person you live with is exempt due to being a student but you work full-time, you’ll only be eligible for a 25% discount. Similarly, if you live with a student and another person who works full-time, you and the other full-time worker will be responsible for 100% of the council tax bill (unless they qualify as a disregarded person).
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Check if you qualifyIf you have reviewed the criteria and think you are eligible for a council tax reduction or exemption that you are not receiving, you can apply online through your local council’s website here.
If you live with a partner, only one of you needs to make an application.
If you don’t qualify for a 25% discount because you live with another adult, you may still be eligible for a discount in the form of a second adult rebate (also known as an alternative maximum CTR) if the other person you live with is on a low income.
The discount is dependent on the income of the other adult living with you and doesn’t take your income or financial situation into account. The lower the other person’s income, the greater your reduction will be.
To qualify as a second adult, the other person living with you must:
Council tax debt is a priority debt, meaning if you have unpaid council tax bills, you must pay them before paying other debts like credit cards or unsecured loans.
If, for whatever reason, you don’t pay council tax, your local council can force you to make up for missed payments. They may do this by forcibly taking the money from your wages or by hiring debt collectors to recover the money on their behalf.
If you don’t pay, your local authority may collect an unpaid council tax bill by:
Whether you miss a council tax payment or are struggling financially, your local authority will have a strict process for dealing with council tax arrears.
If you miss a payment, you’ll usually receive a reminder from your local council around two weeks after the payment was originally due. This is because, if you make payment within seven days, the council will accept the payment and no further action will be taken.
However, if you don’t make payment within seven days or this is the third time you’ve missed a payment this year, you’ll receive a final notice telling you to pay your full council tax bill for the year within seven days.
If you still don’t pay within seven days of receiving a final notice, your local council will usually seek permission from the court to apply for a Liability Order.
Before resorting to court action, they should attempt to arrange a repayment plan with you or give you time to apply for a council tax reduction if you’re eligible.
If you can’t afford to pay council tax, don’t just stop making payments. Instead, contact your local council as soon as possible and explain your current financial situation.
They may allow you to make your council tax payments in smaller instalments based on what you can comfortably afford after your essential costs (rent, mortgage, utilities etc.) have been covered.
If you’re on a low income, you may also be eligible for a reduction in your council tax payments.
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The statute of limitations for unpaid council tax in England and Wales is six years, meaning your local council can only chase you for any missed payments for six years before the debt becomes legally unenforceable. In Scotland, unpaid council tax can be chased for up to 20 years.
This doesn’t mean the debt is written off or disappears after this time, only that your creditors can no longer take legal action to recover the money owed.
However, local authorities are known for being persistent in their debt collection efforts, and will rarely go this long without taking further action to collect the money they are owed.
During this time, they will be free to collect unpaid council tax in any way they see fit, and this can include sending bailiffs to your home to seize assets or forcibly taking the money directly from your wages.
