Grimsby man owed £6k council tax after £100 bill spiralled

When Mike Barley nearly died in a motorcycle accident on the way home from work, he didn't think his biggest worry during his recovery would be the council tax bill he was sent that day. But after he missed a payment reminder letter while in hospital, his debts spiraled out of control.

Barley, 26, from Grimsby, North East Lincolnshire, had a “well-paid” job as a software developer and owned his own home, but the accident in March 2021 left him in hospital for a month with broken ribs, a collapsed lung and severe injuries to his arms and legs.

On the same day of the accident, Mr Barley was sent a council tax bill for £101.71. He missed a payment and was still in the hospital when the reminder email arrived at his home, so he missed that too.

Mr Barley said he was “stuck” on £90-a-week sick pay at the time and recalled thinking: “I have no income anymore – I can't work, I can't walk.” Where will this money come from?

He says after he told the local council he would not be able to pay, they sent another letter in June 2021 outlining a payment plan. It included cutting payments for two months but then required Mr Barley to pay an advance for the remainder of the year – a total of about £1,000.

Mr Barley's council acted in accordance with normal procedure in relation to unpaid council tax in England.

If you haven't paid your monthly bill after three weeks or have three late payments, councils can demand the balance of your annual bill in full and send bailiffs to collect the debt.

Charities have long said England's method of collecting council tax debt penalizes people who actually struggle to pay their taxes, while the government says it is cracking down on “archaic and invasive” practices.

After further reminder letters and warnings, Mr Barley's case was referred to the bailiffs, who sent him a “threatening letter” saying they would come to seize and sell his property to help pay off his debt.

“It was scary, to be honest,” he said.

Council taxes fund public services such as aged care, libraries and waste collection.

Anyone who owns a home or lives in rented accommodation must pay it unless they are entitled to benefits.

When councils use bailiffs to try to recover council tax arrears, the person who owes the money is charged an additional £75 for the initial bailiffs letter, £235 plus costs if the bailiff comes to their home to remove or sell goods, a fee of £110 if the goods are listed on sale, and 7.5% on the value of the debt exceeding £1,500.

Mr Barley said he tried to fight the charges brought against him over the expired bill but was unsuccessful and bailiffs continued to deliver letters to his home.

“It just makes you trapped, it makes you depressed,” he said.

Mr Barley said his relationship had broken down due to the strain of trying to deal with mounting council tax debts, which he estimated had reached a total of around £6,000.

He also fell behind on his mortgage and other payments. He managed to get his credit card canceled, but ultimately his house was repossessed, and he said he had so little money to spend on food that his meals consisted of bread covered in ketchup.

He said his council tax debt was “probably the worst” he had dealt with due to the speed at which the total was increasing.

Mr Barley still owes around £1,700 of the £6,000 total, including £700 in bailiff fees.

He wants councils to stop using bailiffs when a person in debt cannot pay.

“This just adds to the charges,” he said. “If [people] Firstly, I can’t pay it, and then it will be more difficult to give it to the bailiff.”

Our research found that East Yorkshire and Lincolnshire councils referred around 38% more people to bailiffs in the last year for which data was available than in the previous 12 months.

North East Lincolnshire Council said it could not comment on individual cases but had set aside a £100,000 fund to support some of those unable to pay their council tax debt.

The council said on a case-by-case basis this sometimes gives people extra time to pay their council tax or helps them find ways to reduce their bills. Councils may also decide to write off some of the debt.

Matt Sheeran, from free debt advice service Money Wellness, said people should seek help immediately if they are actually having trouble paying their council tax.

“It's so fast and aggressive that a lot of people are stunned,” he said. “They just don't understand how quickly [it] may escalate.”

Peter Tatton, policy director at charity StepChange, which also offers free debt advice, added that the pressure some councils put on people as they chase payments could “exacerbate” people's financial difficulties.

“People are responding to demands for payment by skipping other bills, turning off the heating, borrowing money,” Mr Tutton said.

Figures published in June revealed that local authorities in England owe a total of £6.6 billion in council tax, up 50% on £4.4 billion five years ago – despite councils writing off more council tax debt than before. Over the past year, £250 million of such debt has been written off, compared with £134 million five years ago.

Additional data obtained by the BBC through freedom of information requests revealed:

• Councils are increasingly referring people to bailiffs to help collect outstanding debts.
• Of the 253 councils that provided information to us, 1.4 million accounts were referred to bailiffs last year – up 46% on four years ago.
• But the average amount they were able to collect per account fell slightly, suggesting bailiffs may not be as effective as before.

Our research found that in Bradford, West Yorkshire, the council referred 41% more people to bailiffs over the past year than in the previous 12 months, according to data.

The council has increased council tax rates by almost 10% this year as it tries to tackle mounting debts that will leave it more than £1 billion in debt by 2030.

Those affected include Edmund Davies, who owes around £1,800 in council tax and is struggling to make ends meet on the £295 he receives in benefits each month.

He said the rise in council tax had made life much more difficult for people in his position.

“I'd like to pay it off – it's just trying to come to a really affordable agreement with the council, which is difficult,” said Mr Davies, who is also paying £20 a month towards a text message debt he owed at his previous address.

“To pay more…do I eat today, do I eat this week?” – he said.

Mr Davies recently received food from Bradford North Foodbank, which has seen demand rise by 30% in the last year.

Foodbank manager Franco Biancardo said part of the increase was due to council tax arrears. He is calling on the council to collect the debt “in a gentler way” rather than going to court.

Bradford Council said it is committed to helping those struggling to pay council tax and has committed an extra £1.2 million in support this year.

The spokesman added that the increase in law enforcement visits last year was due to reasons including new charges against homes left vacant during the year and a case backlog being cleared.

The central government is currently reviewing municipal tax debt collection practices.

A spokesman for the Ministry of Housing, Communities and Local Government said it was “taking decisive action to combat archaic and aggressive tax collection practices that leave vulnerable people who miss payments exposed to unmanageable lump sum payments and liability orders”.

A Local Government Association spokesman said councils have a “duty to residents to collect taxes” and that bailiffs and other law enforcement are a “last resort”.