Council tax arrears (Scotland)

Use this fact sheet to:

• understand what a council can do to recover a council tax debt;

• deal with enforcement action; and

• help you negotiate with the council about the debt.

Council tax is a priority debt

This fact sheet is about how your local council may try to collect council tax arrears. Council tax is a priority debt because the council has strong powers to make you pay. This means you should pay council tax before paying non-priority debts such as credit cards or unsecured loans.

Unless your water is supplied by a water meter, the council will usually include your Scottish Water charges in your council tax bill. Arrears can be collected in the same way as for council tax.

Who pays what?

The amount of council tax you pay is based on the value of your home and the number of adults that live in it.

Only people  over 18 can be made to pay the bill. If there is more than one person over 18 living in your home, the owner will normally have to pay the bill if they live in the home.

Joint tenants and owners may have to pay even if their names are not on the bill. If you are married, in a civil partnership or live with your partner, both you and your partner will be responsible for paying all of the bill. This is known as 'joint and several liability'. If you are not sure who is responsible for the bill, contact us for advice.

Extra rules for long-term empty properties and second homes

Your council may be able to charge you a higher amount of council tax than usual if your property:

• has been empty and unfurnished for at least one year; or
• is furnished, but only occupied from time to time, for example, as a second home.

Reducing your council tax bill

Depending on your circumstances, you may be entitled to a reduction to, or discount on, your council tax bill. This could mean that you do not have to pay all, or part, of your council tax bill.

We have listed some of the help that may be available. Citizens Advice Scotland also has an online tool that can help you to check whether you may be entitled to any reductions or discounts.

For more information and to make an application, contact your council.

Council Tax Reduction

If you are on a low income, you may be entitled to Council Tax Reduction (also known as Council Tax Support). This may reduce the amount of council tax that you need to pay, in part, or in full.

Discounts

You may be able to get a discount to reduce your council tax bill if:

• you are the only adult in the property; or

• you share your house only with people who are not counted for council tax purposes.

Examples of people who are not counted include:

• a full-time student or student nurse;

• an apprentice or someone on a youth training scheme (only certain ones apply); or

• someone with a mental disability who is getting certain disability benefits.

Second Adult Rebate

You may be able to claim the Second Adult Rebate if you share your home with another adult person who:

• is on a low income;

• is not liable to pay the council tax bill; and

• does not pay rent to you.

The rules for the Second Adult Rebate are complicated, but you can check whether you are eligible with your local council.

Summary warrant

If you fall behind with your council tax payments, the council may apply to the sheriff court to make a ‘summary warrant’ for the full amount they say you owe. This is a court order that states that you are due to pay your council tax and have not done so. The court will also add a charge equal to 10% of the amount you owe.

The council can ask for a summary warrant to be made against the person that they sent the original bill to. If another person is also responsible for paying the bill, the council can ask for a summary warrant against both people. This is known as joint and several liability.

If you have applied for help with your council tax bill, make sure the council is aware of this. The council may be willing to wait until your claim for help is dealt with before going ahead with the summary warrant application.

Don't just stop paying

If you are having trouble keeping up with your council tax payments, don’t just stop paying. Contact your council and explain you are having difficulty. They may be able to agree a new payment plan with you. If you do this quickly, the council may not apply for a summary warrant.

Time to pay orders

If the council get a summary warrant and you do not pay the amount stated, they can take further action against you. This is called diligence. It includes action such as:

• taking money from your wages;

• taking money from your bank account; and

• using sheriff officers to try to take goods from inside or outside your home.

Once this process has started, you may be able to apply to the court for a time to pay order. This allows you to repay the debt by monthly instalments. It also prevents creditors from making you bankrupt or using most types of diligence against you.

When can I apply for a time to pay order?

You can apply for a time to pay order once the summary warrant has been granted and the council has:

• served you with a ‘charge for payment’ and

• offered you time to pay the debt.

What is a charge for payment?

A charge for payment is a formal request in writing, demanding that you pay a debt within a certain time period, usually  14 days. In most situations the council cannot enforce payment of the debt using diligence until the charge has been served and the time limit stated on it runs out.

The council may serve the charge for payment through its own legal department, a debt collection agency or a sheriff officer. When the council uses a debt collection agency or sheriff officer, it can add on the fees for this to your debt.

How do I apply for a time to pay order?

Once a charge for payment has been served, the papers that you get from the council may include a form called a  DSA 2. You can apply for a time to pay order on this form.

If you do not receive this form with your charge for payment, it is the responsibility of the council, debt collection agency or sheriff acting on their behalf to ensure you know how to apply and where to get the form.

You will need to fill in the form and provide all of your financial details. This information will show the sheriff why you can’t pay the full amount, but that you can pay instalments towards the debt.

Send the form to the sheriff clerk’s office. Time limits depend on the circumstances, but any delay will affect your ability to stop or reverse forms of diligence.

If your creditor does not object to the payment offer the sheriff will grant a time to pay order after  14 days. This stops the council from using any diligence to enforce the debt apart from taking money from your benefits.

Council tax and the debt arrangement scheme

You may benefit from applying for a debt payment programme under the Debt Arrangement Scheme. If you are successful in applying you will make one regular payment to cover most of your debts. This is made to an approved payments distributor who will send the money to your creditors for you.

If you keep to the agreed payments, your creditors will not be able to make you bankrupt or use diligence against you. This protection starts once you have made an application for a debt payment programme and are waiting for it to be approved.

Joining a debt payment programme freezes interest, fees and charges on your debts. This means you are not charged extra from the date that you make your application. They will continue to be frozen for as long as you keep to the payments. If you think that a debt payment programme might help you, contact us for advice.

You include council tax arrears in a debt payment programme. If your council tax arrears are being collected by deduction from your benefit,  contact us for advice.

What can a summary warrant lead to?

If the council gets a summary warrant and you do not pay the amount stated, they can ask you to give them certain information. See the following section,  Information request. The council can use this information to help decide how to recover the unpaid council tax.

The council will be able to use diligence against you if you have received a charge for payment for your council tax and have not applied for time to pay. They can also use diligence if you were granted time to pay but have missed two payments and a third is due.

You can make an offer of payment to the council at any time before they use diligence (enforcement action). This could stop the diligence from happening so make sure you contact the council as soon as possible. 

Types of diligence that might be used include:

• an earnings arrestment;

• a bank arrestment and action of ‘furthcoming’

• an attachment of property outside your home;

• an application to the sheriff court for an exceptional attachment order (EAO);

• an inhibition on the sale of your home and any other land, property or business premises you own (the council will need to get a decree for the debt first); and

• a petition for your bankruptcy where your arrears are at least  £5,000.

More than one type of diligence can be used at the same time by the council. In later sections of this fact sheet we describe each of these types of diligence.

Although there are different types of diligence, most councils prefer to try and recover unpaid council tax by using earnings arrestments or arrestments of bank accounts.

If action is being taken against you that is not described in this fact sheet, or you have been sent paperwork you do not understand,  contact us for advice.

Information request

If the council has a summary warrant, they can ask you for the following information:

• name of your employer;

• the address from which you work;

• the your national insurance number;

• your bank account details; and

• the name and address of anyone else who is jointly liable for part, or all, of the debt.

You have  14 days to give the council these details. If you do not, the council can issue a financial penalty, which will increase your debt.

If the council has sent you an information request, but you do not have the information available  contact us for advice.

How to make an offer

You can make an offer of payment to the council at any time before they use diligence. Making an offer could stop diligence from happening.

Use  Your budget to work out how much you can afford to offer the council each month to pay towards your council tax arrears. Send your budget and your offer of payment to the council as soon as possible. Start making your payments straight away.

Usually, the council will want you to pay your arrears within the current council tax year. Sometimes, they may refuse your offer. If this happens, start making your payments straight away. This will show the council that your offer is affordable and begin to reduce your arrears. Ask the council to reconsider your offer and take your financial circumstances into account. Your budget gives the council this information. 

Each time you make a payment, include the council tax reference number and the summary warrant number if there is one. Also tell the council which council tax year your payment is for. If you do not tell the council which debt your payment is for, they may allocate all of your payments to the current year’s bill. If you have council tax arrears for more than one year, this could lead to unnecessary action on your older debt.

Reductions and discounts

Remember to check whether you are entitled to a reduction to, or discount on, your council tax bill. See the earlier section,  Reducing your council tax bill.

If you have already applied for a reduction or discount and are still waiting for a decision, tell the council when you make your offer of payment.

What is an earnings arrestment?

This is when the council asks your employer to take regular deductions from your wages to repay the debt you owe. Your employer has a limited time to put the arrestment into practice.

The deductions will be made from your ‘net income’. This means income you have left after paying your tax and National Insurance. An earnings arrestment cannot be used to take money from self-employment if you are a sole trader.

The council must send you a Debt Advice and Information Package no earlier than 12 weeks before serving an earnings arrestment. ‘Serve’ means to deliver the documents to you in the correct way. This has to be in a form set by the Scottish Government. It will explain your rights and give you details of how to get advice. If they do not do this, any earnings arrestment will be illegal.

For information about how deductions are calculated,  contact us for advice.

Pension contributions

In some situations, your net income will be the income you have left after any pension contributions have been deducted. If you are not sure whether this applies to you,  contact us for advice.

What can I do about an earnings arrestment?

You may still be able to apply for a time to pay order, or a debt payment programme. If the time to pay order is granted, it will stop the earnings arrestment.

See the earlier sections  Time to pay orders  and  Council tax and the Debt Arrangement Scheme (DAS) for more information and  contact us for advice.

Alternatively, you may be able to agree with the council direct a fixed deduction from your wages. This avoids your employer having to do a separate calculation each pay day.

Some employers can be annoyed at the inconvenience of making the deductions. In some jobs, being in debt may be a disciplinary offence. If you are in a job handling money, an earnings arrestment could put your job at risk. Check your contract of employment. You may want to use this as a negotiation tactic. Explain to the council that if they do an earnings arrestment you may lose your job and then they will get even less money.

What is a bank arrestment?

A bank arrestment will freeze your account until you give permission, or a ‘mandate’, for release of an amount to cover either the total debt due, or a lump sum towards it. If you don’t sign the mandate the council can raise a ‘furthcoming action’. This would order the bank to release the funds that have been frozen. If the council does not raise a ‘furthcoming action’ and you do not agree to release any money arrested, it will automatically be released after 14 weeks.

If the council wants to arrest funds you have in a bank or building society account, their agent will usually send letters of arrestment to the major banks and building societies. If any of them hold an account in your name, your account will be frozen. This includes accounts in joint names even if only one person owes council tax.

The arrestment will only affect money already in your bank or building society account on the day the arrestment was delivered to the bank. You will be given no warning which could leave you unable to draw funds and pay essential bills.

How much can be taken from my bank account?

There is a limit on what can be arrested in your bank account. At present, a minimum of £1,000  must be left free from arrestment. This amount is known as the ‘protected minimum balance’. Also, certain funds such as benefits and tax credits should not be arrested if they can be clearly identified. Contact us for advice.

What can I do about a bank arrestment?

In some situations, the bank arrestment may cause you or a member of your household hardship. If this is the case, you could apply to the sheriff to release some of the money under the arrestment. If you are considering this type of application,  contact us for advice.

In return you may have to agree to set up a standing order for the remaining debt and give the council your employment details. This is to make it easier for them to get an earnings arrestment if you do not keep to the payments you have agreed.

You may still be able to apply for a time to pay order, or a debt payment programme under the Debt Arrangement Scheme. If the time to pay order is granted, it will stop the earnings arrestment.

See the earlier sections  Time to pay orders and Council tax and the Debt Arrangement Scheme (DAS) for more information and  contact us for advice.

What is an attachment of property outside my home?

A sheriff officer acting on behalf of the council may decide to try and arrange the seizure and sale of some items of your personal property.

The council’s right to try and seize property outside your home is different to their right to seize property inside your home.

• An ‘attachment of personal property’ is where sheriff officers seize property outside of your home.

• An ‘exceptional attachment order’ (EAO) is where a sheriff seizes property inside your home. This should be a last resort and the council would have to apply to the sheriff court before they can do this. See the later section  What is an exceptional attachment order? for more information.

The council should serve a Debt Advice and Information Package on you no earlier than  12 weeks  before they carry out an attachment. This has to be in a form set by the Scottish Government. It will explain your rights and give you details of how to get advice. It can be delivered by the sheriff officer when they visit your home to carry out an attachment.

The sheriff officer cannot enter your home to enforce an attachment of personal property. However, they can enter places such as garages or outhouses even if they are locked. They can also enter any of your business premises.  Contact us for advice.

Time to negotiate

Before making an attachment, the sheriff officer must show you the summary warrant and give you a last chance to pay the debt and expenses. It may not be too late to negotiate. Some sheriff’s may be willing to accept instalments towards the debt.

What cannot be attached?

Sheriff officers cannot attach:

• any tools of the trade, books or other equipment that you reasonably require to carry out your profession, trade or business, up to a total value of  £1,000;

• any vehicles you reasonably require up to the value of  £3,000;

• a mobile home if it is your only or main residence; or

• any tools or other equipment reasonably required for the purpose of keeping your garden or yard in good order.

What can I do about an attachment?

Once the attachment is complete, the sheriff officer must give you a document giving details of the goods attached, and the value placed on them. You have a right to buy back the items at that value within 14 days of the attachment. This is called ‘redeeming’ the goods.

If the sheriff officer has not carried out the attachment correctly you can apply to court to challenge this. For example the sheriff officer may have attached something that is normally exempt, or items belonging to a third party.

Once an item has been attached, the sheriff officer can remove it. After  seven days the item can then be sold. You may still be able to buy the goods back at the value set by the sheriff officer before the sale. You will still be liable for any debt that is left over once the goods are sold.

There is also nothing to stop a friend or relative from buying the goods at the sale.

What is an exceptional attachment order EAO?

This is a type of diligence which creditors can try to use if they think that you have property in your home which is valuable enough for them to attach and sell at auction.

The council should only apply for an EAO as a last resort. They must have first sent you a charge for payment and the time limit stated on it must have run out. Unlike an attachment for items of property outside your home, the council has to apply to the sheriff court for an EAO.

What cannot be attached in an EAO?

The items that should not be attached in an attachment should also not be attached in an EAO. However, there are some additional items that should not be attached in an EAO if these are reasonably required by a member of your household. These include:

• clothing;

• bedding;

• basic household furniture;

• a refrigerator; and

• cooking equipment.

This is not a complete list of the items which cannot be attached. If you are unsure whether something should be attached or not,  contact us for advice.

If the sheriff officer thinks that you do not reasonably need an item, they can still choose to attach it. If this happens,  contact us for advice.

What happens to the items once they are attached?

Sheriff officers will usually remove any item which is attached immediately. If the item is not immediately removed, they must give you at least  seven days notice of the date arranged for the removal of the item.

What can I do to challenge an EAO?

You have the right to buy back (redeem) the goods at the value set by the sheriff officer within  seven days  of the date of the attachment.

You also have the opportunity to challenge the EAO. Within seven days of the attachment, you can apply to the sheriff court requesting that the items should be released from the EAO.

You can do this for example, if the correct procedures have not been followed or an auction of the attached items would be ‘unduly harsh’.

What is an inhibition?

An inhibition is a court order preventing you from selling property such as your home and any land or business premises you own. This is to avoid you disposing of a major asset and not paying your creditors. The council needs to apply for a decree (court order) and then serve a charge for payment on you before using this type of diligence

The inhibition lasts for  five years  and then runs out, but it can be renewed. The inhibition will stop you from taking out further borrowing secured on your property.

If you want to sell your home or business premises, you will have to give permission for your solicitors to take the amount owed to the creditors from the proceeds of the sale of the premises. This is after paying the mortgage, estate agent’s fees, advertising costs and the solicitor’s fees. The solicitor will need to pay the money to the creditor in return for the creditor lifting the inhibition and allowing the sale to go ahead.

Different rules for decrees

A decree is very different from a summary warrant and different rules apply. The council would also have to send you a copy of the Scottish Government’s Debt Advice and Information Package before getting an inhibition on your property. If you are being threatened with this type of action,  contact us for advice.

Council tax and bankruptcy

Bankruptcy (sequestration) may be an option for dealing with your debts, including council tax arrears. Bankruptcy can be an option if it will take a long time to repay your debts, or if you don’t think you can realistically repay your debts. There are different ways of going bankrupt. You have to meet certain criteria and there are both advantages and disadvantages you need to consider carefully.

The council could also try to make you bankrupt. Although, they would normally only do this if they cannot recover the money in any other way. You must owe the council at least £5,000  for them to be able to petition for your bankruptcy.

Before making you bankrupt the council need to send you a charge for payment. Alternatively, they may use a court form called a ‘statutory demand’.

Bankruptcy is a serious step and your home, assets and employment could be at risk. If you are considering bankruptcy or the council are threatening bankruptcy, contact us for advice.

What can I do if the council try to make me bankrupt?

If your council has not yet applied to make you bankrupt, you could apply for a time to pay order or apply for a debt payment programme under the Debt Arrangement Scheme.

If your council has already applied to make you bankrupt, you could still apply for a debt payment programme. However it will be too late to ask the court for a time to pay order.

See the earlier sections  Time to pay orders  and  Council tax and the Debt Arrangement Scheme (DAS) for more information and  contact us for advice.

Complaining about the council

If the council has not behaved properly or followed proper procedures, you can make a complaint. You must complain to your local council first. Do this in writing. Set out clearly why you feel they have acted unfairly and explain what you want them to do to put things right. Keep a copy of your letter.

If you have followed the council’s complaints procedure and are not happy with their response, then you may be able to ask the  Scottish Public Services Ombudsman (SPSO) to look at your complaint. You normally need to do this within  12 months of realising that that the council has done something wrong. For the SPSO’s contact details, see  Useful contacts at the end of this fact sheet.

The SPSO has the power to investigate your complaint and decide if they think the council has acted wrongly. If the SPSO finds that the council has done something wrong, they can make recommendations that they would expect the council to follow.

You could also ask your local councillor to take up your complaint with the council.

Useful contacts

Scottish Public Services Ombudsman Phone 0800 377 7330 www.spso.org.uk

Other fact sheets that may help you

Bankruptcy fact sheet

Debt Arrangement Scheme fact sheet

Diligence fact sheet

Time to pay directions and orders fact sheet