Council tax

vivki

Hi guys

Help! I have just realised that my December council tax wasn't taken by direct debit, and when I queried it, was told that the balance has now been written if as I am bankrupt! They are also looking to refund my November payment. Is this right, and what do I do with the refunded council tax (£220)? It was paid after my bankruptcy, and so do I keep it, or will the receiver claim it?

Thanks

JTV93

Hey
Can't answer your question, but when did you submit your bankruptcy? As I did in November and still paid December and January, and due to pay 1st of Feb? I've not been told anything about paying OR the council tax, only tax on earnings. Be interesting to follow this post

vivki

Hi. My bankruptcy was in October.

amizaki

Hi,

After you declared bankruptcy, you are not liable to pay council tax. But, if anyone else live at your address, then they will have to pay their council tax. If you are couple or family and you alone declared bankrupt then your wife/partner has to pay council tax. In that case, nothing will be changed for family expense figure.

CIS

Where bankruptcy is submitted then council tax to the end of the year is also ordinarily covered. The council need to be told about it though.

The caveat however comes where there is a joint liable party, in that case they remain liable for the full council tax outstanding. If a DD is set up and one of the couple goes bankrupt then it is likely the council would continue taking the DD unless they were advised otherwise (i.e. that the DD is coming from the bankrupt).

Where a payment has been made before the council have been made aware then it's unlikely they'd return it without an argument. The best option is to speak with the OR and see what they say about the payment.

TheGardener

To echo previous posts - if you live alone, then you are not responsible for council tax for the financial year of the BR. If you do not live alone, the responsibility for all the council tax due will transfer to the other (adult) occupier.
Your responsibility to pay council tax will recommence at the start of the new financial year in April.

vixg66

Slight hijack here - I was declared bankrupt this month and have set up a direct debit from my new bank account for council tax. Should I not be paying the rest of the year's CT? I'm not in CT arrears.

TheGardener

vixg66 wrote: »

I was declared bankrupt this month and have set up a direct debit from my new bank account for council tax. Should I not be paying the rest of the year's CT? I'm not in CT arrears.

A BR is not responsible for paying council tax for the financial year in which you are BR. Your responsibility to pay CT resumes at the start of the new financial year in April. The Local Authority is effectively a creditor - same as everyone else so paying them would technically being making preferential payments.
However, if you do not live alone and another eligible adult lives at the address, the responsibility to pay the full amount of CT for your address is transferred to the other resident.

Butts

TheGardener wrote: »

A BR is not responsible for paying council tax for the financial year in which you are BR. Your responsibility to pay CT resumes at the start of the new financial year in April. The Local Authority is effectively a creditor - same as everyone else so paying them would technically being making preferential payments.
However, if you do not live alone and another eligible adult lives at the address, the responsibility to pay the full amount of CT for your address is transferred to the other resident.

Well I was declared Bankrupt in October 2017 completely up to date with my C.Tax installment payments for that year and was told by the OR just to keep paying it as normal which I did.

No one claimed the money and the Council trousered the lot.

ToxtethO'Grady

The legal bit around council tax with BR is: if you have lost the right to pay by instalments that years council tax goes in to your BR until April of the following year. If you are up to date you continue paying. If you have an IPA and your council tax has been included in your BR remember in April to update the OR that you have to start paying your council tax.

If your council tax has been passed to bailiffs the council can choose to leave it with them during the 12 months of your BR...usually if you tell the council and the bailiffs you are BR they'll stop,
Its very rare that it happens but it can do, a bit like getting sent to prison for your council tax it is dependant on your behaviour with the council.

CIS

The legal bit around council tax with BR is: if you have lost the right to pay by instalments that years council tax goes in to your BR until April of the following year.

Since 2014, for BR, you don't have to have lost the right to pay by instalments to include it in the bankruptcy.

40.53 Council tax – provable debts All outstanding liabilities (that is, all arrears and future instalment payments) for council tax for the year in which the insolvency commences are provable debts [note 42] [note 43].
This applies whether or not the company/bankrupt was in arrears at the date of insolvency.


43. Kaye v South Oxfordshire DC [2013] EWHC 4165