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Does missing a council tax payment affect credit score?

Missing a council tax payment by itself doesn’t affect your credit rating. Councils do not report council tax payment to credit reference agencies like Experian, Equifax, and TransUnion.

However, while council tax debts don't directly appear on your credit report, the enforcement actions the council can take will show up on your credit file and damage your credit score.

Basically, if you miss a council tax payment, expect your local council to take action so they can recover the debt. The consequences can be quite severe, from wage garnishment to property seizure and even bankruptcy or imprisonment in extreme cases.

As you can see, this can escalate fast, and it’s the escalation that can affect your credit score.

What happens if I miss a council tax payment?

The first thing that matters if you miss a council tax payment is that you will receive a reminder notice from your local council. You’ll get this within about 2 weeks. This notice will give you 7 days to pay the missed amount and get your account back on track. As long as you pay within that 7-day window, no further action will be taken.

If you don't pay within 7 days of the reminder notice, the council will send you a final notice. This final notice will demand that you pay the full year's council tax balance within the next 7 days. Failing to pay this full balance within the 7-day deadline will result in the council taking further enforcement action against you.

If you don't pay this full balance within 7 days of the final notice, the council will take it one step further and apply to the courts for a "liability order". This gives the council additional powers to collect the debt, such as:

  • Deducting money directly from your salary, benefits, or Universal Credit payments.
  • Sending bailiffs to your home to seize and sell your possessions.
  • Placing a charging order on your home if you owe over £1,000, allowing them to force the sale of your property.
  • Applying to make you bankrupt if you owe over £5,000.

Keep in mind that this escalation is at the council's discretion. The council can try other options like setting up a repayment plan before going for a liability order, but they don't have to. The key here is to engage with them proactively to avoid this escalation.

In the most serious cases, the council can take you to court for a "means enquiry" hearing. If the court finds that you had the means to pay your council tax but willfully chose not to, you could actually be sent to prison.

What should I do if I forgot to pay council tax?

As soon as you realise you're going to miss a payment, you should contact your local council and explain your situation. Here are some of the ways they can help you:

  • They can set up an affordable repayment plan.
  • Many councils have so-called “hardship funds” or other kind of assistance available if you're on a low income.
  • You may also be eligible for council tax reduction or exemption depending on your circumstances.

And if you're struggling with multiple debts, it's also a good idea to seek help from a free debt advice service like Citizens Advice. They can help you prioritise your debts and negotiate with creditors, including your local council.

Whichever option you go for, just remember that missing a council tax payment can be quite serious. Don’t shy away from talking to your local council and seeking help.

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