In Scotland, if you’ve fallen behind on your council tax, one of the ways that your local council may attempt to recoup this debt is through ‘wage arrestment’, or ‘earnings arrestment’.
This is known as ‘Attachment of Earnings’ in England, Wales and Northern Ireland.
Wage arrestment involves deducting money directly from your wages. Your employer will receive an Earnings Arrestment Order (Attachment of Earnings Order in the rest of the UK), instructing them to pay a portion of your wages to the sheriff officer, who will then pay your creditors.
When will I receive an Earnings Arrestment Order (EAO)?
There will be several stages before your wages are arrested. The first time you miss a council tax payment, you will usually receive a reminder after 7 days.
If you still don’t make a payment, the council will apply to the sheriff court for a summary warrant. This is a court order that states that you are still due to pay your council tax, as well as the amount owed. The Sheriff court will also add an additional 10% charge.
If you still don’t pay the amount owed, the council may issue a Charge for Payment. This gives you 14 days’ notice to pay the amount owed in full for the remainder of the financial year. It is worth noting that at this point, you may still be able to negotiate with the council to pay in instalments.
If you do not pay in full by the end of the notice period, your right to pay in instalments will be taken away and your local council will be free to pursue diligence to recover your council tax debt.
For council tax, this usually means wage arrestment. You will be asked to provide your employment details, bank account details, and national insurance number.
Who can receive a wage arrestment?
Most of us can receive a wage arrestment, provided the debt is more than £50. However, there are several types of people who are not eligible for wage arrestment:
Self-employed people.
Serving members of the armed forces.
Individuals who rely solely on state benefits (e.g. Income Support, ESA, JSA).
How much can the sheriff court deduct from my wages?
The amount that can be deducted from your salary through a wage arrestment depends on the salary that you earn. The first £529.90 of your net earnings (monthly) is protected. Any above that can be arrested.
Wage arrestment works on a sliding scale. The types of income that can be arrested include commission, bonuses and statutory sick pay. The same scale applies to everyone, regardless of their actual living costs or personal circumstances. This means the amount that you are left with after deductions may not actually be enough to live on.
You can use the table below to calculate how much you would pay:
DEDUCTIONS FROM DAILY EARNINGS
Net earnings (post-tax)
Deduction
Up to £17.42
Nil
Above £17.42 but less than £62.97
£0.50 or 19% of earnings above £17.42, whichever is the greater
Above £62.97 but less than £94.67
£8.65 plus 23% of earnings above £62.97
Above £94.67
£15.95 plus 50% of earnings above £94.67
DEDUCTIONS FROM WEEKLY EARNINGS
Net earnings (post tax)
Deduction
Up to £122.28
Nil
Above £122.28 but less than £442.00
£4.00 or 19% of earnings above £122.28, whichever is the greater
Above £442.00 but less than £664.50
£60.75 plus 23% of earnings above £442.00
Above £664.50
£111.92 plus 50% of earnings above £664.50
DEDUCTIONS FROM MONTHLY EARNINGS
Net earnings (post-tax)
Deduction
Up to £529.90
Nil
Above £529.90 but less than £1,915.32
£15.00 or 19% of earnings above £529.90, whichever is the greater
Employers can also subtract an additional £1.00 for every deduction from your salary to cover any administrative costs on their behalf.
Will my employer know that I have an Earnings Attachment Order?
Yes. Because money will be deducted directly from your wages, your employer will be made aware of the court order.
Some employers will have a clause in their employment contract that stipulates that being in debt is a disciplinary matter. This is likely to be the case if you work in a financial institution, the prison service or the police force. However, you should still check your contract just in case. At the very least, your employer will probably be annoyed by the extra work involved.
If your job is at risk as a result of wage arrestment, you may be able to apply for a Suspended Attachment of Earnings Order.
Can I refuse the Earnings Arrestment Order?
No. If you refuse to share your employment details, bank account details, and national insurance number, you will be forced to pay an additional fine for noncompliance.
Can I stop wage arrestment for council tax?
If you act quickly after you have received your Charge for Payment, you may still be able to arrange a new payment plan with the council before the wages arrestment begins. You will receive the Scottish Government’s Debt Advice and Information Package with your Charge for Payment which suggests some possible next steps.
At this stage, you should seek professional advice. A licensed insolvency practitioner will be able to assess your financial situation and help you find the most appropriate solution, whether it is a Debt Arrangement Scheme, Trust Deed, or filing for Sequestration.
