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?

I work in Council Tax. Many Councils will not agree to an arrangement until a Liability Order has been granted. They need to be summonsed to court before this can happen. It means if they fail to pay again the council can take further action straight away. In the mean time pay as much as they can (ontop of ongoing liability) and contact to make an arrangement as soon as they have received their summons.

There are a few steps until it gets to enforcement action. Your parents need to pay what they can for now (it shows willing)
They will receive a reminder, followed by a final notice and then summons to court. There will be a cpst for the liability order. At this stage they can then set up a repayment plan. They can submit a means test form to show what they can reasonably afford to pay per week/ month. They then need to stick to this repayment plan. If there are failed or late payments then the council will pass the debt to an enforcement agency.

@DefaultParent thank you. My dad informed them that his old age pension kicks in at the end of Feb and therefore would be in a position to start paying, so Feb has always been the month payments would start (and they agreed) but they've not formally asked for a payment plan. I'll write out an email for them to send to seek a plan, if this is refused then we'll have to seek out alternative ways to pay.

I know they definitely wouldn't want it to get as far as court due to more fees

You've had some good advice on here so far.

It ^isn't outrageous that they have been billed for money that they owe though.
You even say they have previously paid council tax all their lives so it can hardly have been news to them they should have been paying it. It they have the skills to buy a plot of land and build their own house and hold down jobs, then they can hardly claim to not have been aware they should have been paying it. Even if they didn't have all that history, ignorance is never a defence.
Nor did the Council post the bill out when your Dad was unwell with COVID. That has nothing to do with this. It is nothing to do with the fact they have been evading a tax they knew everyone in a house in the country has to pay.

As everyone says though, the council aren't trying to get them into massive debt with a dodgy lender or to sell their house. They need to be proactive with going to them with a plan.

Even though it would add fees on unfortunately a lot of council's won't accept a repayment plan until it has been to court. That doesn't mean that they can't start paying what they can afford towards it. If they can I would highly recommend they see a solicitor who has good knowledge of council tax to confirm what they can and can't get away with. It could save them money in the long term.

Solicitor is unnecessary, a good adviser from
citizens advice would be sufficient. (We have plenty of advisers who could handle it and one who takes on lots of cases like this.)

If you parents have a private pension maturing soon (?) they might have the option to get tax free cash to pay the council tax.

Be aware that a lot of council tax departments will agree to a payment arrangement but subject to the liability order from the court. Basically as above it gives the council powers to take matters further.

At the council tax office I worked at it was argued that we would not take less than we could get via an attachment of earnings order, basically taking it directly from your wage via your payroll department. They can collect 2 years at once running them at the same time and the percentages are steep.

The key word in all of this is tax. It is a tax collected locally and they do not piss around. Here is a link to a random first google search council which shows you the amounts they take from salaries.

www.northampton.gov.uk/info/200028/council-tax/996/council-tax-attachment-of-earnings

From a what the hell happened situation, it would seem something went wrong from the planning/building regs flagging up a new build to the VOA (valuation office) them rating it and passing on the information to the council to bill it. Whatever happened it has been billed now so sort out dates re taking occupancy so anything from the solicitors they used for conveyancing to confirm their occupancy date. Definitely agree a payment plan, again they may go down the liability order route (magistrates court not a ccj) then they can ask for an income and expenditure breakdown.

Thanks for the info. Really appreciate you taking the time to explain it all to me.

www.gov.uk/council-tax-arrears

@OnTheBenchOfDoom

Be aware that a lot of council tax departments will agree to a payment arrangement but subject to the liability order from the court. Basically as above it gives the council powers to take matters further.

At the council tax office I worked at it was argued that we would not take less than we could get via an attachment of earnings order, basically taking it directly from your wage via your payroll department. They can collect 2 years at once running them at the same time and the percentages are steep.

The key word in all of this is tax. It is a tax collected locally and they do not piss around. Here is a link to a random first google search council which shows you the amounts they take from salaries.

www.northampton.gov.uk/info/200028/council-tax/996/council-tax-attachment-of-earnings

From a what the hell happened situation, it would seem something went wrong from the planning/building regs flagging up a new build to the VOA (valuation office) them rating it and passing on the information to the council to bill it. Whatever happened it has been billed now so sort out dates re taking occupancy so anything from the solicitors they used for conveyancing to confirm their occupancy date. Definitely agree a payment plan, again they may go down the liability order route (magistrates court not a ccj) then they can ask for an income and expenditure breakdown.

According to OP, her parents built the house themselves so there was no conveyancing involved.

Council tax is not due until a property is deemed habitable which is from the date official completion is confirmed by the Building Control inspector. I think OP said her parents have a letter confirming this date presumably from building control so there should be no problem getting the first year bill cancelled.

The building controller is responsible for informing the council that there is a new habitable property in their borough and the council should then register the property and pass the details on to the council tax department who should then raise the bill. Something has clearly gone wrong with this process as it should never take this long for a bill to be raised. Also raising this bill starting from the wrong date shows something went seriously wrong. That should act as mitigation as it was not the responsibility of the OP's parents to directly inform the council.

My information comes from being a self builder myself, completion having taken place just over a year ago. Even with the problems caused by Covid it only took a couple of months from completion date for a bill to be issued.

That's really interesting thanks so much. An update from yesterday, council sent another letter to say they'd got the banding wrong and so they actually owe less. They still have the 1st year on incorrectly, and so hopefully once we send them an email they can look at that. The bill should then be around 9k..not great, but better!

Another Emma . Are you sure of your facts. You say that the council will want to avoid the cost of legal action.
Not in my long experience because they will be able to add it to your parents debt.
Please don’t advise someone on what you guess You mean well but make it clear if you are not a professional or have direct experience and are using only your gut feeling