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Scotland’s Council Tax Bills Set to Rise
With Most Scottish Council’s now having set their budgets, over the coming weeks, millions of households across Scotland will see their council tax bills dropping through their letter boxes.
For households in almost all of Scotland’s 32 local authorities, it is likely these bills will increase by as much as 4.79%, the maximum the Scottish Government is allowing them to be rise by.
This follows on from last year, where the maximum that council tax bills could go up by was 3%. On that occasion, 21 local authorities choose to apply the maximum increase; but thousands of other households, living in properties banded between E to H, also saw additional increases that were applied by the Scottish Government.
This led to the average bill across Scotland increasing by £72 and local authorities across Scotland increasing their revenue by 9%, up £187 million to £2.3 billion.
Council Tax Misery for Many
The reality for many Scots, however, is these above inflation increases will not be affordable, and will result in them struggling to meet local authority demands for payment and will see their accounts being passed over to sheriff officers to be actioned.
This will mean bank accounts being arrested or wages frozen.
In 2017-18, for example, Sheriff Officers attempted to arrest over 138,000 bank accounts for council tax debt alone, making it the most common type of debt recovery procedure used; followed by nearly 69,000 wage arrestments.
How to Reduce your Council Tax Bill
However, many households across Scotland may be able to reduce their council tax bills.
It is believed last year, for, example, across the UK, over £2.4 billion went unclaimed in council tax support, with 2.7 million families not claiming.
Many of these families will have been entitled to council tax reduction (formerly known as council tax benefit), a means tested benefit that even those in work can apply for and can be applied for by contacting your local authority.
Also, many may be entitled to a 25% single person discount if they are living on their own, or a student discount, where they or their partner are full-time students.
What Happens if you cannot Pay
However, the truth is even for those who are receiving council tax support, many will struggle, and their council tax debt will only be the beginning of their problems.
One of the issues with council tax arrears is in Scotland, local authorities have special powers and enforcement procedures that they can use that means a bad situation can quickly become worse.
In addition to this, council tax is what is known as an involuntary debt, meaning, unlike credit cards and personal loans, you still accrue it regardless of whether you want to or not. It’s not something you can choose not to pay.
The first step in this recovery procedure is once you have missed a council tax payment, the council sends you a reminder giving you only 7 days’ notice to catch up the payment.
If you miss that, you are then given a 14 days final reminder, which will state you no longer have the right to pay by instalments and must pay the full amount owing. This is the amount outstanding for the full year.
If you still fail to pay after that, the local authority can then apply for a summary warrant from the court.
A Summary Warrant is essentially a court order, although, unlike other court orders, it is not granted after you have had an opportunity to appear before a judge. With Summary Warrants there is no court hearing. The local authority requests the order and the court grants it.
When a Summary Warrant is granted you then must also pay a 10% surcharge on what you owe, and your account is transferred to a Sheriff Officer (a Scottish bailiff) for recovery.
The Sheriff Officers can then begin formal recovery action, known as diligence, and can serve a 14-day formal demand for payment called a Charge for Payment.
If you fail to pay the debt and the notice period under the Charge for Payment expires, you can then be subject to a bank account arrestment, wage arrestment or in the worst-case scenario, an application to the court to make you bankrupt where you owe more than £3,000.
It is, therefore, important not to ignore council tax debts; as next year, your debt will only increase.
If you are struggling with council tax arrears and want to get on top of it before you must start paying next years council tax, call a Carrington Dean adviser for free, confidential money advice on 0808 2085 195.