How we recover unpaid Council Tax
Recovery action after a Liability Order
If the magistrates are satisfied that the Council Tax is due, they will issue a Liability Order that gives the council certain powers to enforce the unpaid Council Tax.
The unpaid Council Tax could be recovered from you by:
If you do not pay your Council Tax, we can apply to a Magistrates' Court for a liability order.
If a court grants a liability order, one of the options for recovering the outstanding amount is a Council Tax Attachment of Earnings Order (CTAEO).
A CTAEO is sent to your employer to take money directly from your earnings.
A copy of the order will be sent to you (and your employer) showing the total debt to be repaid.
Payment will be set up to match the frequency that you are paid:
- daily
- weekly
- monthly
Until the debt is paid.
Guidance for employers
Any CTAEOs you receive will confirm:
- the name and payroll number (if known) of the employee that owes Council Tax
- the amount that has to be paid
- a local authority reference
About the deductions
Deductions should begin as soon as possible after the order has been received.
We must receive the deducted amounts by the 18th day of the month following the month the deduction was made.
As well as the deducted amount, you can deduct £1 per transaction from your employee's salary towards administrative costs.
A statement of the total amount deducted (including the £1 administrative costs) should be given to your employee.
Deductions should be made each pay day until the total amount has been paid.
If the employee has left or has never been in your employment, you need to tell us within 14 days.
How 'earnings' are defined
Earnings include:
- wages or salary (including any fees, bonus, commission, overtime pay or other additions to wages or salary payable under a contract of service)
- statutory sick pay
Earnings do not include:
- public departments of the Government of Northern Ireland or of a territory outside the United Kingdom sums armed forces pay and allowances
- social security benefits or allowances (including maternity pay)
- disability benefits or allowances
- wages payable to a person as a seaman, other than as a seaman of a fishing boat
- youth training allowances
Tables showing the percentage of deduction
The amount to be deducted depends on the total net earnings received by the employee. See the tables below for the percentage to be deducted according to the amount of net earnings and the frequency of the pay period.
| Net earnings | Deduction rate |
|---|---|
| Not exceeding £75 | 0% |
| Exceeding £75 but not exceeding £135 | 3% |
| Exceeding £135 but not exceeding £185 | 5% |
| Exceeding £185 but not exceeding £225 | 7% |
| Exceeding £225 but not exceeding £355 | 12% |
| Exceeding £355 but not exceeding £505 | 17% |
| Exceeding £505 | 17% of the first £505 and 50% of the remainder |
| Net earnings | Deduction rate |
|---|---|
| Not exceeding £300 | 0% |
| Exceeding £300 but not exceeding £550 | 3% |
| Exceeding £550 but not exceeding £740 | 5% |
| Exceeding £740 but not exceeding £900 | 7% |
| Exceeding £900 but not exceeding £1,420 | 12% |
| Exceeding £1,420 but not exceeding £2,020 | 17% |
| Exceeding £2,020 | 17% of the first £2,020 and 50% of the remainder |
| Net earnings | Deduction rate |
|---|---|
| Not exceeding £11 | 0% |
| Exceeding £11 but not exceeding £20 | 3% |
| Exceeding £20 but not exceeding £27 | 5% |
| Exceeding £27 but not exceeding £33 | 7% |
| Exceeding £33 but not exceeding £52 | 12% |
| Exceeding £52 but not exceeding £72 | 17% |
| Exceeding £72 | 17% of the first £72 and 50% of the remainder |
How to calculate the deductions
Column 1 shows pay bands which correspond to net earnings.
Column 2 shows the percentage of earnings to be deducted.
Locate the earnings band in column 1 and then read across to column 2 to find the percentage. Then calculate the amount to be deducted.
If the person is paid:
weekly, then use Table A to calculate deductions.
monthly, then use Table B to calculate deductions.
In weekly intervals, then divide the Net earnings by the number of months in the pay period. Then use Table B to calculate the appropriate monthly deduction and multiply that by the number of months in the period.
In regular intervals (not whole weeks or months), then divide Net earnings by the number of days. Then use Table C to calculate the appropriate daily rate, then multiply that by the number of days in the period.
In two or more series of payments at regular intervals, select the series with the shortest interval between payments and use the tables as described above. In addition, deduct 20% of the net earnings payable in every other series.
In two or more series and all the intervals are the same length, select one of these, make deductions as described above, and in addition deduct 20% of the net earnings payable in every other series.
Example scenarios
Example 1
An employee's net pay is £150 weekly and £600 monthly.
A deduction of £7 is made for the weekly pay and £120 for the monthly pay (20% of £600).
In irregular intervals
Net earnings should be divided by the number of days since the last payment and Table C should be used to work out the appropriate daily deductions, which in turn should be multiplied by the number of days in the period.
Example 2
An employee's net pay:
- (a) £90 (from 1 April to 9 April, 9 days)
- (b) £120 (from 10 April to 19 April, 10 days)
- (c) £176 (from 20 April to 30 April, 11 days)
The deductions to be made would be:
(a) 90 divided by 9 = £10:
- Daily deduction = £10 x 3% (30p)
- Deduction to be made for period = 9 x £0.30 = £2.70
(b) 120/10 = £12:
- Daily deduction = £12 x 3% (36p)
- Deduction to be made for period = 10 x £0.36 = £3.60
(c) 176/11 = £16:
- Daily deduction = £16 x 5% (80p)
- Deduction to be made for period = 11 x £0.80 = £8.80
In regular and irregular and intervals
If on the same pay day the person is to be paid regular period earnings and irregular period earnings these amounts should be added together and treated as earnings payable at the regular interval, the appropriate table being used.
Example 3
An employee receives £250 as normal net weekly pay. In addition £350 is received every 15 days for a different task.
The deductions to be made would be for weekly earnings (Table A) of £250 = £350 = £600.
The deduction rate for £600 is 17% of the first £370 plus 50% of the remainder (£62.90 = £115 = £177.90).
If there are multiple orders
If an order is already in place, the new CTAEO is still applied (in date sequence) with the later order being applied to the remaining earnings.
If there are two or more orders in place, then no further CTAEOs can be added.
Regulations that apply:
We may apply to the Department of Work and Pensions to deduct funds from your benefits if you receive:
- Universal Credit
- Income Support
- Jobseekers Allowance
- Employment Support Allowance
- Guarantee Pension Credit
Your debt may be passed to one of our nominated enforcement agents to recover on our behalf.
Once it has been handed to the enforcement agents you will need to discuss your debt with them direct.
This action will incur additional statutory fees at each stage of the enforcement process.
Where is more than £1,000 outstanding under liability order(s) and the Council Tax payer has a legal interest in the property, we may apply to the County Court for a charging order on the property.
The effect of a charging order is that if the property or other legal interest is sold, the amount of the charging order is paid out of the proceeds.
In some rare cases we will apply to the County Court for force of sale in order to recover the outstanding debt.
Bankruptcy is essentially a declaration to your creditors that you cannot afford to repay your debt.
If you or your company owe more than £5,000 in Council Tax or Business Rates, and you have been summonsed, we may start bankruptcy or liquidation proceedings against you.
If we take this action, we will pass your account to our solicitors who will send you a statutory demand. A statutory demand gives you 21 days to pay us the full amount.
If you receive a statutory demand, you should contact our solicitors immediately.
If you do not settle the statutory demand, we will present a petition for bankruptcy or liquidation to the County Court.
If we have tried all other options, we may request that the Magistrates issue a summons for you to appear before them to explain why you have not paid your debt and to enquire into your means.
You may be imprisoned for a period (less than 3 months for each debt), if the court finds that you had the means to pay the debt but:
- refused to pay the debt
- were culpably negligent in not paying
The court may decide to postpone the imprisonment upon the payment of an agreed amount until the debt is paid.
The court has the power to remit the debt or part of the debt if it sees fit.