I suppose it just depends on whether you answer the door when the knocker from the council comes round to find those who didn't return a form to confirm the details are correct.
However, I do find it odd that the website they have set up has no mention of being required to register, or that there's a chance of a fine if you don't.
Given the amount is above 750 (threshold for bankruptcy), what are the odds some councils will threaten that too, in future (given that they have done so for council tax arrears in some areas).
OK, I know that it's not the same (council tax owed to council, a fine would be owed to the court) but the way councils sometimes work, I would not expect them to worry about the facts... seeing as the amount is "up to 1000" yet the council states "a 1000 pound fine" (rather than "a fine of up to 1000 pounds" which is accurate, but not quite as threatening!)