Council tax

[Fedupmum13]

Hi,
My parents built their own home on bought private land a few years back. They were incorrectly and naively believed that until the council officially adopted the site (and put Street lighting and collected refuse etc) they wouldn't be billed council tax. Sure enough they've never paid it in the last years. Until December when they receive a bill for £12000, payment to be made immediately. The letter says 'we haven't been charging you council tax' and then goes on to demand payment.
Despite living in an expensive house, they have no savings, it all went on the house and now face the prospect of taking a high interest loan (poor credit history).
Legally, can they do this?

Are they not aware what council tax pays for? Why would they think they were exempt? Try citizens advice/lawyer to help

Yes, they should pay.

Can they ask for a payment plan?

They won't do a payment plan with them. They were naive for sure, but it seems outrageous how they are treating them. I've asked them to ring citizens advice

Outrageous for billing them for something they haven't paid for?

Apply for council tax support? If they’ve only just billed them then they can assess benefit entitlement from the start date- but you need to apply quickly.
I honestly would ask for a payment plan, otherwise they’ll start adding costs on and the amount will spiral and they will be liable.

Outrageous how?

What, the council should just let them off?
They will have to pay. There's no other way except, ultimately, prison.

That's crazy. Surely they've had a bin collection in all those years?? They might be able to release some equitybfrom their but I doubt they'll get out of paying it tbh

I didn't say outrageous for charging them. It's the way they've been treated. My dad was in hospital with Covid when the bill came and rung them when he came home. They threatened court despite him trying to find a way of paying. They've admitted they are at fault for not charging and so the lack of any humility from them is disappointing. They've paid all of their bills their entire lives, council tax etc and have never needed to claim benefits. It's just so upsetting to think they now face having to take a huge interest loan out. I wish I could help them

I suggest they find out what band they have been put in and then you research to find out if the house is actually worth what that bracket relates to.
That's one plan of action.

Anything on the Martin Lewis website?

It is hard when it is someone you love but it is no different to if they had been self employed for years and not told the government and paid income tax then got caught and ignorance/naivety would be no defence in that case either

Have they got the money to pay it or will they need to get a loan/mortgage/equity release?

Yes it’s legal. Everyone has to pay ctax (over the age of 18) obviously there are discounts and exemptions.
I work for a bens dept- you can apply for a 3 month council tax reduction back date but no more but this is in wales.

Really really push for a payment plan. Send a letter and include a breakdown of outgoings explaining how much they can afford and how quickly they will have it paid off. Do it all in writing because if it has to go to court, it will matter that they've tried. If it goes to the court, it's not the end of the world, and it won't affect their credit rating. After court, it will be passed to bailiffs and they will accept a payment plan instead.

I used to work for council tax department. This case is unusual but it's about finding someone to speak to at the council that can and will help. Ultimately, they don't want to see your parents homeless or taking out other debts to pay this one. However, council tax is considered a "priority payment" so they can push your parents hard to get it paid.

They work full time but have no savings. I personally would like to see them sell the house but I know that's easy for me to say. What I didn't say properly in my op was that they were told they didn't pay it until the council 'adopted the site' by the person who helped them build the house. They of course should have double checked this info! The only lender who will loan them is ocean finance, who I believe charge huge interest.

Thanks @PeeAche I'll mention it to them.

If it goes to the court, the bill will increase and bailiffs are unpleasant but they will definitely accept a payment plan. They are regulated in a different way to local councils and have different approaches. Don't let the word bailiff scare you. But first and foremost, push for a payment plan. If you would like any help with the wording of the letter, I can do that with you. :)

Ah that is so kind thank you. :) I'll ask them to speak to them again, or is writing a letter better?

How many years are we talking; when did they a. Buy the land and b. Move into the property after it was completed? Has the council send bills showing how much is owed for each year or is it just one letter demanding £12k?!

A local authority must issue a bill 'as soon as reasonably practicable' in England and 'as soon as practicable' in Scotland. In cases where there has been a delay of years, the local authority may not be able to recover the money if it has been in breach of this requirement.

What is your parents' income like? If it's low they might be entitled to Council Tax Reduction; if they are they could claim and request backdating. They could also argue that they had an 'underlying entitlement' to CTR over the years (if they did) which could reduce the arrears.

Lastly they will need to consider what they can afford to pay. In negotiations with the council they will need to provide information about their finances (income, outgoings and debts) to demonstrate what they can afford.

It would be wise to contact citizens advice for help with all this - meanwhile they must not ignore the letter and should contact the council to ask for recovery action to be suspended while they seek further advice and help.

If they can afford to pay something for now, that would help!

Letter. Everything should be in writing from now on. Not paying CT is a serious offence and they should be prepared for this to go to court (but not be afraid, it'll all be fine, I promise!) Nonetheless, it's time to get serious about it!

4 years being billed, but they've lived there 3 years (they have a document showing completion 3 years ago), so my dad is contesting the first years payments.
Zero letters, just the one demanding 15k (but my dad believes it should be 12k).definitely going to ring citizens advice.

Thank you so much.

Bugger, I wrote that way too slowly and there have been loads of posts since!

They should not take out a (high interest) loan to pay the council tax.

Or sell their house, that's ridiculous.

If they both work full time they can afford a payment plan, surely?

They can, if council accept it!

They should start paying what they can afford now, even if it's just the current/ongoing liability (rather than any arrears).

Citizens advice will be able to help them negotiate a payment plan. The council will save on costs if they can avoid going to court for a liability order. So they should hopefully accept a reasonable offer.

No need for your parents (or you!) to panic

Thank you :) they've never been in trouble before so it's pretty daunting. Thanks so much.

If it goes to court, it will then be passed to a bailiff. In our area (Essex) the bailiff will then agree a payment plan, and as long as it is stuck to there is no further problems. Court costs will be added on though.