I may owe thousands in council tax arrears and I feel sick

[Littlespiderseverywhere]

So. I recently switched to UC from tax credits, and I declared my savings to them- about £7700. I knew that the limit for savings on tax credits was £16000, and on UC it's tapered from £6000.

I was also on housing benefit, and council tax benefit. I had made my initial claim for these about 15 years ago when I first moved into a house with baby DS1, and was very poor with no savings at all. Since then the only change of circumstances I had had to report to the council was moving house once.

The council have just emailed me and told me that DWP have informed them that my savings are over £6000, which is their cut off for council tax benefit. I had no bloody idea of this. I must have been told- or asked to declare any savings- 15 years ago when I first applied, but at the time I had nothing, and have no recollection of this.

My savings have been close to or over £6000 for 5-6 years!! I have always lived very frugally through fear of ending up without money again- for me, having an emergency nest egg has been top priority.

I'm so anxious and upset (hence posting at this time of night!). I'm autistic too, and I can feel the worry pushing me towards the edge of not being able to cope.

The council want to see all my bank statements for years back, and I intend to fully comply ASAP. But- as far as I can calculate- I think I will owe them about £6-7000.

Do you think I will be able to offer them a lump sum from my savings- say £3000- and set up a payment plan for the rest? I'm self employed and am not quite even hitting the minimum income floor for the hours I'm working (20 hours p/w- I have a fit note which doesn't really seem to be needed yet because I'm still on transitional protection).

I feel sick with anxiety that I could lose all the savings I've carefully scrimped and saved to build up. What if the car breaks down tomorrow?? I realise that I have only been functioning well all these years because I have been able to live within parameters of my own creation regarding hours worked and having enough money for mine and the kids' modest needs, and I'm terrified of the effect on the DC if I'm unable to remain stable and functioning for them.

Wouldnt you be best to csll the council direct and actually ask them you will probably get 100 different answers on here

Oh, and the other thing I've discovered- through my frantic nocturnal Googling- is that money in your current account counts towards your savings too! Sometimes I've had over £1000 in there. Again, I have a tendency to retain it because I have never, never, never wanted to be on my uppers again- not with the DC. And that very tendency means it's going to get ripped away.

(Sorry, darkest hour and all that)

As far as I understand it, first I have to provide them with the evidence, then they have to calculate how much I owe, then we can discuss payment. Which will probably take some time. And I'd like some feedback ASAP. In the hopes I can get some sleep tonight..

Might help to look at this differently op. You only have that level of savings because you (without realising) got council tax relief you weren't entitled to.

At least you have the money available to repay it and it seems unlikely you'll have to do do all at on but you still can if you need to.

Plus your UC will no longer be subject to the taper.

I detailed my work situation in my OP. I've always been anxious about switching to UC due to the minimum income floor and self employment. Once my transitional protection ends in February, if I don't earn the minimum amount I will be treated as if I have, and my UC will be docked accordingly, leaving us very short. And of course, with self employment you don't know when you're going to have a bad month. I had a run of several bad months the year before last.

That's one of the reasons I strove to save so hard- I needed a buffer against that! I'm terrified of not being able to meet basic living costs, or of the van dying (we live rurally and I use it for everything- business and family).

The taper thing had occurred to me, that will make things a lot simpler.

I was over the savings slightly at one point so I spent some to bring it below but yes you will owe the amounts for the months you were over and not entitled to help. Sadly I have no savings now just get by but hey maybe I will one day again ☺️

I do realise I'm using this thread to vent, and a lot of my anxiety is coming from my emotions around money and security. As a single mum with no family or other support I guess I feel in a defensive position anyway, and very aware that I need to have contingencies for everything. And as an autistic person I totally freak out when stuff doesn't go to plan! (and me totally freaking out is not pretty).

(Sigh) most people have their emotional meltdowns on the Relationships board, don't they 😆

I get it op, you haven’t done this intentionally and it’s completely different paying something over a number of years every month to having to wipe out your savings that you have worked hard to save . You must be gutted. Send them the information then hopefully you will be able to negotiate payment. Presumably you will now start paying council tax they may be willing to offer that you pay extra each money on top to go towards the debt rather than a lump sum. Although if you are able to do a partial lump sum that would then take you below the 6 k and you would be entitled to not pay. At least you know now and can avoid making the same error in the future.

I couldn't bring myself to spend any!! I kept on thinking "Oh, but I'm migrating to UC soon, there's a 5 week gap, I might need it, better hold on to it just for now" 🤦‍♀️

Could you get in touch with Citizens Advice Bureau?

Thank you so much. Part of the problem is that I haven't seen any of my good friends over the last few days, so I've had to keep this all bottled up inside. I can't tell the DC- they'd be worried without being able to help. So yeah, basically I started this thread because I needed someone to talk to.

As an aside- I'm amazed at all the responses at this hour- are you all abroad or just insomniacs?? I didn't think I'd get any replies til morning- it just helped to write it down.

I tried. I talked to their bloody chatbot. That cut me off abruptly when I said I was self employed. Then I called National Debt line, and talked to a lovely lady, but when I said I'm self employed and rent a workshop she said she had to transfer me to the self employed debt line, where the phone just rang and rang and rang for 40 minutes 🙄.

I may call National Debt line back and tell them I suddenly don't rent a workshop any more. I can't see that it has any bearing on my case whatsoever.

I’m menopausal and wake between 4 and 6 every day (sometimes earlier!!) I go to bed at 930 though 😂

I'm menopausal too, and recommend industrial quantities of HRT, if you're able to take it. I NORMALLY get a good night's sleep nowadays...😒

I imagine you'll be able to set up some kind of direct debit to it. I get the savings thing completely

I would employ a solicitor OP, they can help you go through the situation and attend an interview under caution with you etc. The dwp will access your accounts anyway so be prepared for that. In future keep £5k in a fixed account and make sure your current account stays under £1k. If it goes over spend something on the van or house maintenance. With self employment there might be some leeway that you're keeping some money in your account for stock or future tax or future accountancy fees. Maybe there's some issues around having your personal and business accounts mixed together? I personally would spend money on a solicitor for an old fashioned going through the financial situation and the dwp rules re self employment and separation of accounts etc.

@Littlespiderseverywhere I started HRT two months a go and the sleep has improved from then thankfully. Hoping it helps my achy joints

The same kind of thing happened to me when I started something very small and it grew slowly as the kids got older. Mostly my accounts were in a muddle but I needed professional legal and accountancy help to untangle it. In my case their accusation was wildly inaccurate they thought it was about £15k but it was £800, which I paid. And went forward with much clearer accounting. I was also able to see more clearly that my self employment wasn't worth it and I'd rather an employer take care of everything. It's very hard to jump ship.

Going forward, maybe you could save regularly a modest amount regularly for your son, to help cost your savings below the threshold?
I've been awake for the last few hours as there was a noisy and somewhat scary earth tremor that woke me up. I'm in a hotel on a Greek Island, and decided to get up and enjoy the coolness of the early morning.

Tell them you need time to go through your accounts with your accountant and solicitor and your solicitor will get back to them in due course. Also 🤣 paying for professional services will take you under the savings limit so apply for council tax help again.

Weirdly, my self employed accounts are in quite good order- mainly because it's a very small, simple business- I'm a sole trader, issue about 4-5 invoices a month, do my very simple accounts on a cash basis...I positively enjoy it!
But I neglected to employ the same kind of financial hygiene in my savings account 😳

I love Greece! I haven't been for ages, but one day....have a swim for me!

Yes, I now realise that I could have paid any excess into no- access accounts for the DC, and they could have had a nest egg each 😪.

Second this. They are great on this sort of stuff.