Council Tax

Arrears and Debt Recovery

Service Update:

Due to the ongoing pandemic, liability order hearings at the Isle of Wight Magistrates’ Court will be held by live link which can be via video link or by a telephone conference call. This means neither you nor the Isle of Wight Council will be permitted to attend the court. 

You must contact the Isle of Wight Council in the first instance if you are disputing liability, if you are unable to bring your account up to date or unable to meet the payments on the arrangement enclosed with the summons. 

It is vital that you contact our Council Tax Department on (01983) 823901 or email council.tax@iow.gov.uk quoting your account reference number located on the summons. 

If we are unable to resolve the matter, then you will be given the opportunity to have the issue decided by the court. The court will then contact you with a date and time for your hearing.

Further guidance issued by HM Courts and Tribunals service (HMCTS) is available from the two links provided below:

Please note that an inability to pay is not a legal defence against the granting of a liability order, however if you are experiencing financial difficulties please contact the Council Tax department immediately.

Bills

A bill is sent for the annual charge (1 April – 31 March) and instalments are normally set over 10 months (1 April – 1 January). We send one bill at the beginning of the financial year usually in the middle of March, unless there is a change in the amount or the way you pay your bill.

Payments can be made over 12 months and if you wish to do this you must request for your instalments to be set over 12 months either in writing or by completing our online form by clicking here. If you are setting up a new Direct Debit please click here to complete the application online – Please note: you must select the 12 month option or your payments will end in January and NOT March.    

Reminder and Second Reminder

Your Council Tax bill will state the total amount to be paid and detail your instalments. If a payment is not received a reminder notice will be issued and the overdue amount must be paid within seven days.

If the reminder amount is paid within seven days then you can continue to pay the instalments in line with your original bill.

If the overdue amount is not paid you will lose the right to pay by instalments and a Court Summons will be issued which includes costs that you will need to pay in addition to the charges that are due.

A maximum of two reminder notices can be issued within the financial year. On the third occasion you will lose the right to pay by instalments and a final notice will be issued.

To make an online payment please click here

Final Notice

If you have received a final notice you have lost the right to pay by instalments and the outstanding year’s charge becomes due in full. Payment should be received within seven days to prevent a Court Summons being issued.

If the full amount is not paid a Court Summons will be sent which includes costs that you will need to pay in addition to the outstanding charge.

To make a online payment please click here

Summons and Liability Order Hearing

If you received a summons you are required to pay the amount due and you will also have to pay costs of £58.00 (This is the amount the Court has agreed we can charge you for the time and cost it takes to produce and issue the summons.)

To make a payment online including the summons costs please click here

On the Hearing date we will apply to the court for a liability order which allows the council to recover any unpaid Council Tax using other methods (see below for more information). Once a liability order is granted additional costs of £22.00 will be added bringing the total costs to £80.00.

You do not need to attend court if you accept liability for the charge.

We will not apply for a liability order if,

  1. the outstanding charge and costs are paid in full before the hearing,

  2. you bring your account up to date and set up a Direct Debit for future payments prior to the hearing date.

Further information regarding the liability order hearing is detailed below.

What happens if you cannot pay before the hearing date?

If you are unable to pay the amount due in full or bring your account up to date and set up a direct debit, a payment arrangement is enclosed with your summons for you to follow.

If payment is made in line with this arrangement no further recovery action will be taken. The arrangement includes total costs incurred of £80.00.   

If you are unable to pay in line with the arrangement you must complete a payment arrangement request by clicking here. Your offer of payment will be considered and every step will be taken to agree a reasonable arrangement.

What happens if I miss a payment?

If you are unable to make a payment for any reason you need to contact us immediately to discuss your arrangement.

If payment is not received within 14 days of the due date further recovery action will be taken without further notice. Further methods of recovery are detailed below

Free Debt Advice can be obtained from the following organisations:

National Debt Line - Telephone: 0808 808 4000 Website: www.nationaldebtline.org

Citizens Advice Bureau - Telephone: 0344 4111 444 Website: www.adviceguide.org.uk

StepChange Debt Charity - Telephone: 0800 138 1111 Website: www.stepchange.org

Money Advice Service - Telephone: 0800 138 7777 Website: www.moneyadviceservice.org.uk/en

Liability Order Hearing

You do not have to go to the Court if you know the Council Tax charge is correct and you have not paid it.

The Magistrates Court cannot deal with certain matters including:

  • If you are or are not liable for Council Tax.
  • You cannot afford to pay.
  • Make a payment arrangement.
  • If you are appealing against the property band.
  • If you have not been awarded or are waiting a decision for a Discount, Exemption, or Local Council Tax Support.

Defences against a liability order that a court may consider include:

  • The Council Tax charge has not been set correctly.
  • The Council Tax payable is not in accordance with the valuation band for the dwelling (You do have to pay if you have an appeal/proposal outstanding for the property that is shown in the list).
  • The Council Tax bill was not served correctly or did not show the correct instalments you need to pay.
  • Any reminder/further notices or the summons notice has not been served correctly.
  • The charge has been paid.
  • Over six years have passed since the Council Tax bill was first issued.
  • Bankruptcy/ Insolvency proceedings have been commenced.

If the Magistrates agree that the unpaid charge is correct and payable a liability order will be granted.

You can still enter into a payment arrangement after the liability order has been granted please click here to complete a payment arrangement form.

If we do not receive a payment proposal within 21 days the Council will attempt to recover any outstanding balance using one of the following methods detailed below.  

Deductions from benefit

The council may be able to apply to have money deducted from your benefits such as job seekers’ allowance, universal credit, income support or pension credit.

Attachment to your earnings

The council can order your employer to deduct a regular amount from your wages toward your unpaid council tax. The amount deducted is based on a percentage of your net earnings. You will need to speak to your employer to confirm the amount that will be deducted.

Bailiff/enforcement agent

If an amount remains unpaid after the liability order is granted; we can pass the case to an Enforcement Agent (bailiff) to collect the charge without any further notice. At this stage you will need to discuss any payment plans directly with the enforcement agents instead of the council, but the bailiff will work within a code of conduct the council has agreed with them. You will have to pay more costs if bailiffs are used to collect outstanding Council Tax.

The bailiffs will try to collect payment in full or to agree a payment arrangement with you, but if this cannot be done, or you do not pay as agreed the bailiffs can remove goods from your home to sell at auction to raise the funds to pay the charge.

From 6 April 2014 new legislation 'Taking Control of Goods (Fees) Regulations 2014' came into force. The legislation can be viewed on the Legislation.Gov.uk website by clicking here. The Act provides a new statutory code for taking control of goods in order to sell them to enforce the payment of debts. This replaces the process formerly known as “distress”.

Fees are recoverable by reference to stages of the enforcement procedure. Fees range from £75 to a higher fixed fee, plus 7.5% of the sum to be recovered exceeding £1500.

It is important to make contact with the Council prior to this to make a payment arrangement to avoid these costs.

Bankruptcy

If you owe more than £5000.00, we can start bankruptcy proceedings against you under the Insolvency Act. Your home could be sold if we have to take this action. If you have been declared bankrupt already you will need to send us documentary evidence to confirm the date of the bankruptcy order. The Official Receiver will appoint a Trustee who will send us a proof of debt form so we can make a claim for the amount you owe. Once any assets you possess have been evaluated, the Official Receiver will arrange to send payment to us as one of your creditors.

The Official Receiver will include any debts incurred before your bankruptcy, however if you still occupy the property you need to continue to pay any Council Tax that is due. If the property is empty and unoccupied and has become the responsibility of the Trustee, no council tax will be payable as the property is classed as exempt.

Individual company or voluntary arrangement

If as an individual or as a company you go to an Insolvency Practitioner to make a voluntary arrangement, you will need to send us documentary evidence of when it happened. If there is any council tax outstanding up to the date of the arrangement, we will notify the amount to the Insolvency Practitioner.

The Insolvency Practitioner will write to your creditors to arrange a meeting where your debts will be confirmed, and the creditors will decide whether to accept a payment arrangement. If the arrangement is accepted we will receive payment from the Insolvency Practitioner of an agreed amount. If the arrangement is not accepted then recovery action will continue.

If you still occupy the property you need to continue to pay any Council Tax that are due from the date of the voluntary arrangement. If the property is empty and unoccupied and you own the property or continue to have a tenancy agreement you will continue to have a liability after any exempt period ends.

Charging Order

If you own the property that you have not paid Council Tax for, we can apply for a charge to be put against the property. This acts as a security against the debt that you owe, so that if the property is to be sold during this period, your Council Tax debt will have to be paid to us direct from the proceeds of the sale. This course of action may be an option rather than taking bankruptcy or committal proceedings.

Committal proceedings

If the debt is not cleared even after bailiff action (which could be, for example, because there were insufficient goods or the bailiffs were unable to gain entry), then a committal summons can be issued.

The Council Tax payer named on the liability order will then be required to appear in court and give details, under oath, of their financial details. Failure to appear at court will result in an arrest warrant being issued.

If the Magistrates believe that there has been wilful refusal or neglect to pay then the person can be sent to prison for up to 90 days. The court can suspend the committal providing a payment arrangement is adhered to.