Buying or selling your home

Overview

Buying or selling a home normally takes 2 to 3 months. The process can take longer if you’re part of a chain of buyers and sellers.

There are several steps you’ll need to follow:

sellers must provide an Energy Performance Certificate for the property (a home)

if a seller is using an estate agent, potential buyers must make any offers through the agent

once a buyer’s offer has been accepted, the seller (a seller)’s responsible for drawing up a legal contract to transfer ownership

an offer is not legally binding until contracts are exchanged

depending on the amount given for property, the buyer may have to pay tax

This guide relates to England and Wales. Shelter has advice about buying and selling a home in Scotland.

If you’re buying property with someone else

You can own a home with up to 3 other people. Find out more about the different types of joint property ownership.

Energy Performance Certificates

Energy Performance Certificates (EPCs) are needed whenever a property is:

built

sold

rented

You must order an EPC for potential buyers and tenants before you market your property to sell or rent.

In Scotland, you must display the EPC (an EPC) somewhere in the property (your property), for example in the meter cupboard or next to the boiler.

An EPC contains:

information about a property’s energy use and typical energy costs

recommendations about how to reduce energy use and save money

An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years.

Check how you could make your home more energy efficient using the Energy Savings Trust’s home energy check.

How to get an EPC

You’ll need to find an accredited assessor if you’re selling or renting out your home in:

England, Wales and Northern Ireland

Scotland

They (an accredited assessor)’ll assess your property and produce the certificate.

You can be fined if you do not get an EPC when you need one.

The person selling the house, the landlord or the letting agent must show you the EPC (an EPC) if you’re buying or renting.

Buildings that do not need an EPC

These (Buildings that do not need an EPC) include:

places of worship

temporary buildings that will be used for less than 2 years

stand-alone buildings with total useful floor space of less than 50 square metres

industrial sites, workshops and non-residential agricultural buildings that do not use a lot of energy

some buildings that are due to be demolished

holiday accommodation that’s rented out for less than 4 months a year or is let under a licence to occupy

listed buildings - you should get advice from your local authority conservation officer if the work would alter the building’s (Buildings that do not need an EPC) character

residential buildings intended to be used less than 4 months a year

See other properties’ EPCs

You can look at the EPCs of other properties free of charge. This lets you compare your home’s energy performance with that of similar homes. You can search by the property’s address or by the EPC’s report reference number..

You can opt out of the EPC register if you do not want other people to be able to see your EPC.

Estate agents

You must sign a legally binding contract with an estate agent if you use one to sell your home.

You must stick to the terms of the contract (a legally binding contract) or you could be taken to court.

Estate agents must also treat buyers fairly. They must show any offers promptly and in writing to the person selling the house.

Estate agents are also legally obliged to pass on any other offers for the property right up to when contracts are exchanged.

Complain about an estate agent

You must complain to the estate agent (an estate agent) first and give them (an estate agent) a fair chance to sort out your complaint. If they (an estate agent) do not, you can complain to one of the following schemes:

The Property Ombudsman

Property Redress Scheme

Ask the estate agent which scheme they belong to.

Offers

A buyer must make an offer through the estate agent if a home is sold through one.

A buyer can make their offer directly to the seller for a private sale.

Buyers can make offers verbally (over the phone or in person) or in writing.

An offer is not legally binding in England and Wales until contracts are exchanged.

If a buyer makes an offer ‘subject to contract’, this means the price can still be negotiated (for example if a survey finds a problem with the property).

The law is different if you’re making an offer for property in Scotland.

Transferring ownership (conveyancing)

Once the offer is accepted

The seller is responsible for drawing up a legal contract to transfer ownership.

The contract (a legal contract to transfer ownership) contains details about:

the sale price

the property boundaries

which fixtures and fittings (like carpets and kitchen units) are included

any legal restrictions or rights, like public footpaths or rules about using the property

any planning restrictions

services to the property, like drainage and gas

when the sale will complete

If the seller has hired a solicitor or conveyancer, they (The seller) will:

draft the initial contract

answer questions from the buyer’s solicitor or conveyancer (with the seller’s (The seller) help)

negotiate the details of the contract (a legal contract to transfer ownership) if necessary

Exchanging contracts

When the buyer and seller are happy with the contract (a legal contract to transfer ownership), both sides sign final copies and send them to each other.

The agreement to sell and buy is legally binding once this happens. Usually neither party can pull out without paying compensation.

Completion

Once you exchange contracts and deal with any remaining checks the buyer (the buyer’s) has asked for:

The money is transferred from the buyer (the buyer’s) to the seller.

The legal documents needed to transfer ownership are handed over to the buyer (the buyer’s).

The seller moves out and leaves the property in the state agreed in the contract (a legal contract to transfer ownership).

The seller hands over the keys to the buyer (the buyer’s).

The property now belongs to the buyer (the buyer’s).

Citizens Advice has more advice about buying or selling your home.

Tax

You may need to pay:

Stamp Duty Land Tax when you buy a home in England

Land Transaction Tax when you buy a home in Wales

Capital Gains Tax when you sell a home

Stamp Duty Land Tax

If you buy between 8 July 2020 and 30 June 2021

You pay SDLT (Stamp Duty Land Tax) if you paid more than £500,000 for the property.

If you buy between 1 July 2021 and 30 September 2021

You pay SDLT (Stamp Duty Land Tax) if you paid more than £250,000 for the property.

If you buy from 1 October 2021

You pay SDLT if you paid more than £125,000 for the property. This threshold also applies to any property bought before 8 July 2020.

You still have to pay if you swap something of economic value for a property, for example shares or another property.

If you’re buying your first home

From 1 July 2021 you do not have to pay SDLT (Stamp Duty Land Tax) if the property (your first home) is £300,000 or less.

Capital Gains Tax

You do not pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply:

you’ve lived in it (your home) as your main home for all the time you’ve owned it (your home)

you have not let part of it (your home) out or used part of it (your home) for business only

the grounds, including the buildings, are smaller than 5,000 square metres (just over an acre)

This is because you automatically get a tax relief called Private Residence Relief. You do not need to do anything.

If you do not meet all these criteria you may have to pay some Capital Gains Tax.


Joint property ownership

Overview

This guide is also available in Welsh (Cymraeg).

You must decide which type of joint ownership you want if you buy, inherit or become a trustee of a property with someone else. You tell HM Land Registry about this when you register the property.

You can own a property as either ‘joint tenants’ or ‘tenants in common’.

The type of ownership affects what you can do with the property (a property) if your relationship with a joint owner breaks down, or if one owner dies.

You can get legal advice from someone who specialises in property.

Joint tenants

As joint tenants (sometimes called ‘beneficial joint tenants’):

you have equal rights to the whole property

the property (the whole property) automatically goes to the other owners if you die

you cannot pass on your ownership of the property (the whole property) in your will

Tenants in common

As tenants in common:

you can own different shares of the property (the whole property)

the property (the whole property) does not automatically go to the other owners if you die

you can pass on your share of the property (the whole property) in your will

Change your type of ownership

You can change from being either:

joint tenants to tenants in common, for example if you divorce or separate and want to leave your share of the property (the whole property) to someone else

tenants in common to joint tenants, for example if you get married and want to have equal rights to the whole property

There’s no fee to do this (get).

You can also change from sole ownership to tenants in common or joint tenants, for example, if you want to add your partner as joint owner. This is called transferring ownership.

Sell the property (the whole property) if the other owner has lost mental capacity

You’ll have to apply to the Court of Protection if you want to sell the property (the whole property) but the other owner has lost ‘mental capacity’.

Check your ownership details

You can find out what type of joint ownership you have by checking documents such as a:

property transfer

property lease

trust deed, also known as a ‘declaration of trust’ (a document stating an owner’s share in a jointly owned property)

A solicitor, conveyancer or legal executive can help you check what type of joint ownership you have if you’re unsure.

Your type of ownership can sometimes change without your knowledge, for example if one of the other owners goes bankrupt.

Change from joint tenants to tenants in common

This (change) is called ‘severance of joint tenancy’. You should apply for a ‘Form A restriction’.

You can make this change (change) without the other owners’ agreement.

A solicitor, conveyancer or legal executive can also make the application for you.

How to apply if the other owners (the other owners’) do not agree to the change (change)

Serve a written notice of the change (change) (a ‘notice of severance’) on the other owners (the other owners’) - a conveyancer can help you do this.

Download and fill in form SEV to register a restriction without the other owners’ agreement. You can also fill in form RX1 to register a ‘form A restriction’ if you cannot provide any of the evidence of severance options listed in form SEV.

Prepare any supporting documents you need to include.

Send the form (form SEV) and supporting documents to HM Land Registry’s Citizen Centre. There’s no fee.

Supporting documents

You should include an original or certified copy of the notice of severance signed by all the owners (the other owners’).

If you cannot get the other owners’ signatures you can instead send a letter certifying that you’ve done one of the following with the notice of severance:

given it (the notice of severance) to all the other owners (the other owners’)

left it (the notice of severance) at the other owners’ last known home or business address in the UK

sent it (the notice of severance) by registered post or recorded delivery to the other owners’ last known home or business address and it (the notice of severance) has not been returned undelivered

How to apply if the other owners (the other owners’) agree to the change (change)

Download and fill in form SEV to register a ‘form A restriction’ if all owners (the other owners’) agree.

Send the form and supporting documents to HM Land Registry’s Citizen Centre. There’s no fee.

Where to send your application

Change from tenants in common to joint tenants

You need the agreement of all the other joint owners to change from being tenants in common to joint tenants.

How to apply

Fill in a new or updated trust deed - a conveyancer can help you do this.

Download and fill in the form (form SEV) to cancel a restriction, if one has been registered.

Send the form and documents (the form (form SEV) and supporting documents) to HM Land Registry’s Citizen Centre. There’s no fee.

Supporting documents

You must include one of the following:

an original or certified copy of the new or updated trust deed signed by all the owners (the other owners’)

a certified copy of a transfer showing that all owners with individual shares of the property have transferred these to all the beneficial joint tenants

a certificate from your conveyancer confirming that all owners with shares of the property have signed a new trust deed

You must also include either:

a statutory declaration prepared by your conveyancer

a ‘statement of truth’ - either one you’ve prepared yourself or using form ST5

A statement of truth must be:

in writing and include the wording “I believe that the facts and matters contained in this statement (A statement of truth) are true”

signed by the person who makes it (A statement of truth)

The supporting documents must prove all the following:

nobody else except the named joint owners have shares of the property

none of the joint owners (the named joint owners) is being made bankrupt, has a charging order from creditors or is mortgaging their share of the property

all the joint owners (the named joint owners) now own the property together as beneficial joint tenants

Where to send your application

Selling when an owner has lost mental capacity

You must apply to the Court of Protection if all of the following apply:

you’re one of 2 or more owners of property or land

one of the owners (2 or more owners of property or land) has lost ‘mental capacity’

you want to sell the property or land

Losing mental capacity means someone cannot make a decision for themselves at the time it needs to be made.

This (means) means that:

the owner who’s lost mental capacity (one of the owners (2 or more owners of property or land)) cannot sign legally binding documents and needs help to make decisions

you’ll have to apply to appoint someone to take the place of the owner who’s lost capacity (one of the owners (2 or more owners of property or land)) so the sale (sell) can go ahead

Appoint someone to act on behalf of an owner

You’ll have to appoint someone to act on behalf of the owner who’s lost mental capacity (one of the owners (2 or more owners of property or land)) even if:

you’re already acting on behalf of an owner as a ‘deputy’

the Official Solicitor is a ‘litigation friend’ for an owner

You may not need to apply if you’ve got a registered power of attorney.

Read the guidance on the sale of jointly owned property (COP GN2) to find out if you need to apply.

Get the forms

Download and fill in:

the Court of Protection (the Court of Protection) application form (COP1) so you can appoint someone who can deal with the sale of the property (the sale of jointly owned property)

the special undertaking by trustees (COP12)

an information form (COP1D)

the witness statement (COP24) - use the guidance on the sale of jointly owned property (COP GN2) to fill this in

another witness statement (COP24) as a certificate of fitness (for example, a character reference) if you’re not appointing yourself or your solicitor to act for the owner

Fees

It costs £365 to apply. You might have to pay an additional £485 if the court decides there needs to be a hearing.

Read the fees guidance to find out when you might not have to pay.

Enquiries

Contact the Court of Protection for help and to find out if you need to fill in other forms.

You can also write to the Court of Protection or visit the public counter.

You cannot get legal advice from court staff.

Send your application

Send the original and one copy of each of the following to the Court of Protection:

the application forms

witness statement

a copy of the entries at HM Land Registry if the sale includes any registered land

a copy of the conveyance if the property is unregistered

any other documents and information asked for

Tell people about your application

The Court of Protection will send you a copy of your application forms, stamped with an issue date, a week after you apply.

You must tell (‘serve’) anyone named in your application (such as the person who’s lost capacity) about applying within 14 days of the issue date (an issue date).

Read the guidance at the end of application form COP1 to find out who to tell.

Send them:

a notice that an application form has been issued (COP15)

an acknowledgment form (COP5) so they can confirm they’ve been told about this

You can tell them:

by post to their home address

by fax

in person

Confirm you’ve told people

Within 7 days of serving the documents, you must download and fill in the forms (‘certificates of service’) confirming you’ve told:

the owner who’s lost mental capacity (the person who’s lost capacity) (COP20A)

other people named in the application (your application) (COP20B)

Send them all together to the Court of Protection.

After you apply

Read the guidance (the guidance at the end of application form COP1) to find out what happens if you have to attend a Court of Protection (the Court of Protection) hearing.

Update the property records after you’ve appointed someone to act for the owner who’s lost mental capacity (the person who’s lost capacity).

If your application is rejected and you did not have a hearing

You can ask for a decision to be reconsidered if your application is rejected and you did not have a hearing.

Download and fill in application form COP9.

Send the original (application form COP9), one copy of the form (application form COP9) and any documents asked for in the form (application form COP9) to the Court of Protection.

You must apply within 21 days of the decision being made.

It’s free.

If your application is rejected and you had a hearing

You can appeal the decision if your application is rejected and you had an oral hearing.

Download and fill in the appellant’s notice (COP35).

Send it (the appellant’s notice) and any other documents asked for in the form (application form COP9) to the Court of Protection.

You must apply within 21 days of the decision being made or within the time limit set by the judge who rejected your application.

Fees

It costs £320 to apply. You might have to pay an additional £485 if the court decides there needs to be a hearing.

Read the fees guidance (the guidance at the end of application form COP1) to find out when you might not have to pay.

Emergency applications

Contact the Court of Protection to make an emergency application, for example to stop someone who lacks mental capacity being removed from where they live.


Registering land or property with HM Land Registry

When you must register

This guide is also available in Welsh (Cymraeg).

You must register all land or property with HM Land Registry if you’ve:

bought it (all land or property)

been given it (all land or property)

inherited it (all land or property)

received it (all land or property) in exchange for other property or land

mortgaged the property (all land or property)

You do not usually need to register leasehold land or property if there are 7 years or less on the lease when you take ownership.

You must register your land with the Rural Land Register as well as HM Land Registry if you own agricultural land.

Your property might not be registered if you owned it before 1990 and have not mortgaged it since. Check if your property’s registered.

You must tell HM Land Registry if you transfer ownership of your registered property to someone else.

Once you’re registered

HM Land Registry publishes information online about most registered property, including:

the names of owners

the price paid for the property (all land or property)

a plan of the property’s (all land or property) boundaries

You cannot opt out of your property information being published.

If you live in Scotland or Northern Ireland

HM Land Registry only deals with land and property in England and Wales.

Scotland

Register your land or property with Registers of Scotland.

Northern Ireland

Register your land or property with Land and Property Services.

Register for the first time

Land or property must be registered for the first time if it’s unregistered when you take ownership of it or mortgage it.

Even if you do not have to register, registering voluntarily:

gives you proof of ownership

helps protect your land from fraud

makes it easier to change, sell or give your property away in the future

You can register property yourself or get a solicitor or conveyancer to do it for you.

Register land or property for the first time

Search the register to make sure your property is not already registered.

Apply for a search from the Land Charges Department to search against all previous owners since 1925. They will send you the results.

Fill in an application for first registration.

Prepare a scale plan showing where the land is outlined, if it (Land or property)’s not shown in the deeds.

Find the forms you need depending on your circumstances and fill out 2 copies of the list of documents form.

Find out the correct registration fee - this depends on the value of your property.

Send your documents, forms and fee to HM Land Registry.

If you bought the property

Include the same forms as for registering for the first time and a ‘transfer of whole of registered title’ form.

If you inherited the property

Include the same forms as for registering for the first time and include either:

a completed ‘whole of registered title assent’ form - the executor needs to fill this out if the property was in the name of a sole registered owner and it (the property)’s been left to you in a will

a completed ‘transfer of whole of registered title’ form - the surviving owner needs to fill this out if they jointly owned the property and you are inheriting a share

Contact HM Land Registry if you’re unsure which form you need.

Other documents you may need

You may also need to send:

a ‘proof of identity’ form if you are not a legal professional, such as a conveyancer

a ‘disclosable interests’ form if there are unregistered interests in the property not mentioned in the deeds (such as a short-term lease or a right of occupation) - read detailed guidance on unregistered rights from HM Land Registry

a Land Transaction Return certificate if you’ve paid Stamp Duty (for a property in England and Northern Ireland) or Land Transaction Tax (for properties sold in Wales or after 1 April 2018)

a certified copy of the lease, if you’re applying to register leasehold land or property

Transfer ownership of your property

You must tell HM Land Registry when you change the registered owner of your property, for example if you’re transferring it (your property) into another person’s name, or if you want to add your partner as a joint owner.

Download and fill in an application to change the register.

Fill in either a ‘transfer of whole of registered title’ form, if you’re transferring your whole property, or a ‘transfer of part of registered title’ form if you’re only transferring part of your property.

Fill in a certificate of identity for a private individual.

Find out the correct fee. Use the ‘Scale 2 fees’ if you’re transferring ownership of a property without selling it, for example as inheritance. Use the Land Registry (HM Land Registry) fee calculator if you’re transferring part or all of a property as a sale.

Update or correct the register

You must tell HM Land Registry if anything in the register changes or it is incorrect.

Update or correct contact addresses

You can register up to 3 addresses (including email and non-UK addresses) with HM Land Registry for each property.

To change your contact details or those of other owners or agents send a request to update registered owners’ contact address. You do not have to pay anything to do this.

Change your name

You must send HM Land Registry an application to change the register when you change your name. You do not have to pay anything to do this (Change).

How to apply depends on which documents you can send that prove your name has changed. You’ll get back any official certificates you send in after the register has been updated.

Use application form AP1 if you have any of the following documents:

an official or certified copy of a certificate showing the name change (change), such as a marriage or civil partnership certificate

a copy of a deed poll

a statement of truth

a statutory declaration sworn before someone able to take oaths

You must also send additional proof if you’re not sending a certificate or using a conveyancer (for example a solicitor). When you send from AP1 (application form AP1), include both:

a filled-in confirmation of identity form in your new name

a copy of an official document in your former name, such as a passport, driving licence or utility bill

If you’ve changed your gender

Use application form CNG if you have any of the following documents:

a gender recognition certificate

a new birth certificate

a letter from a UK-based medical practitioner (such as a doctor) confirming you’ve changed gender

Send the completed form and one of the documents to the address on the form. You must send original documents, not copies.

If you’re sending a gender recognition certificate, write ‘Private and confidential’ on the envelope.

Returning to your original surname

To return to your original surname after a divorce or dissolution of a civil partnership send HM Land Registry:

application form AP1

a copy of your marriage or civil partnership certificate

HM Land Registry will let you know if they (HM Land Registry) need more information.

Stop your previous name being seen on old documents

Your previous name will still appear on any documents that were filed with HM Land Registry before you changed your name. Previous names cannot be changed but you might be able to stop them from being copied or inspected by making an exempt document application.

It (an exempt document application) costs:

£12 per document for electronic applications - only businesses and organisations can apply electronically, for example conveyancers

£25 per document for paper applications

You will need to fill in form EX1 and form EX1A.

Mortgage completion

You must tell HM Land Registry if a mortgage on a registered property is paid off (‘discharged’).

Usually your mortgage lender will do this (paid) for you automatically but they may send you a completed ‘cancellation of charges’ form.

Once you have this (an exempt document application), fill in an application to ‘cancel entries relating to a charge’ and a confirmation of identity form.

Send all forms to the Citizen Centre.

HM Land Registry (HM Land Registry) will update your details and tell you that the register has been updated.

Other changes

Transfer ownership of your property if you’ve:

sold it (your property)

divorced or separated and want to remove an owner

married and want to add an owner

given the property (your property) away

Send your requests

Send completed forms to the HM Land Registry Citizen Centre (the Citizen Centre).


Tenancy deposit protection

Overview

Your landlord must put your deposit in a government-approved tenancy deposit scheme (TDP) if you rent your home on an assured shorthold tenancy that started after 6 April 2007. In England and Wales your deposit can be registered with:

Deposit Protection Service

MyDeposits - including deposits that were held by Capita

Tenancy Deposit Scheme

If you don’t rent your home on an assured shorthold tenancy, your landlord can accept valuable items (for example a car or watch) as a deposit instead of money. The items won’t be protected by a scheme.

There are separate TDP schemes in Scotland and Northern Ireland.

They (separate TDP schemes in Scotland and Northern Ireland) make sure you’ll get your deposit back if you:

meet the terms of your tenancy agreement

don’t damage the property

pay your rent and bills

Your landlord or letting agent must put your deposit in the scheme (a government-approved tenancy deposit scheme (TDP)) within 30 days of getting it.

At the end of your tenancy

Your landlord must return your deposit within 10 days of you both agreeing how much you’ll get back.

If you’re in a dispute with your landlord, then your deposit will be protected in the TDP scheme (a government-approved tenancy deposit scheme (TDP)) until the issue is sorted out.

Holding deposits

Your landlord doesn’t have to protect a holding deposit (money you pay to ‘hold’ a property before an agreement is signed). Once you become a tenant, the holding deposit becomes a deposit, which they must protect.

Deposits made by a third party

Your landlord must use a TDP scheme even if your deposit is paid by someone else, such as a rent deposit scheme or your parents.

Information landlords must give tenants

Once your landlord has received your (tenants) deposit, they have 30 days to tell you (tenants):

the address of the rented property

how much deposit you’ve paid

how the deposit (your (tenants) deposit) is protected

the name and contact details of the tenancy deposit protection (TDP) scheme and its dispute resolution service

their (the tenancy deposit protection (TDP) scheme) (or the letting agency’s) name and contact details

the name and contact details of any third party that’s paid the deposit

why they (any third party that’s paid the deposit) would keep some or all of the deposit

how to apply to get the deposit back

what to do if you can’t get hold of the landlord (Your landlord) at the end of the tenancy

what to do if there’s a dispute over the deposit (your (tenants) deposit)

If your landlord doesn't protect your deposit

Contact a tenancy deposit scheme (TDP) (a government-approved tenancy deposit scheme (TDP)) if you’re not sure whether your deposit has been protected.

Contact MyDeposits if your deposit was held by Capita.

Getting your deposit back

You can apply to your local county court if you think your landlord hasn’t used a TDP scheme when they should have.

Get legal advice before applying to court. You do not need a solicitor to do this.

Before going to court

It can be quicker and cheaper to write to your landlord, rather than going to court.

If you cannot come to an agreement, you can apply to the court for compensation.

Apply to a county court

Apply using Form N208: Claim form.

The court fee is £308. You can claim this back from your landlord if you win your case.

You can apply for money off your court fee (The court fee) if you claim certain benefits or have a low income.

What happens next

If the court finds your landlord has not protected your deposit, it (the court) can order them (your landlord) to either:

repay it (your deposit) to you

pay it (your deposit) into a TDP scheme’s bank account within 14 days

The court may also order the landlord (your landlord) to pay you up to 3 times the deposit (your deposit) within 14 days of making the order.

At the end of the tenancy

The court may decide that you won’t have to leave the property when the tenancy ends if your landlord hasn’t used a TDP scheme when they (your landlord) should have.

Disputes and problems

If there’s a dispute over a deposit

Your tenancy deposit protection (TDP) scheme offers a free dispute resolution service if you disagree with your landlord about how much deposit should be returned.

You don’t have to use the service (a free dispute resolution service) but if you do, both you and the landlord have to agree to it (a free dispute resolution service). You’ll both be asked to provide evidence, and the decision made about your deposit (a deposit) will be final.

If you can’t contact the landlord (your landlord)

You can ‘raise a dispute’ to get your deposit back if you can’t contact your landlord and your deposit is held by one of the approved TDP schemes:

MyDeposits

Tenancy Deposit Scheme

Deposit Protection Service

The TDP scheme (Your tenancy deposit protection (TDP) scheme) will refund your deposit if the dispute resolution service (a free dispute resolution service) agrees.

There may be a limit on the time you have to raise a dispute. Contact the TDP scheme (Your tenancy deposit protection (TDP) scheme) as soon as possible.

If your deposit is not held by an approved TDP scheme

You may be able to apply to your local county court to get your deposit back if your deposit was not protected by an approved TDP scheme.

You should write to your landlord and your letting agent (if you have one) before you make a claim. Your landlord or agent may offer to pay your deposit back after they get a letter to avoid legal costs.

Get help and advice

You can get more help and advice from:

your local Citizens Advice office

a solicitor or advice agency

Shelter in England or Shelter in Wales


Party walls and building work

Overview

You must tell your neighbours if you want to carry out any building work near or on your shared property boundary, or ‘party wall’, in England and Wales.

Party walls stand on the land of 2 or more owners and either:

form part of a building

don’t form part of a building, such as a garden wall (not wooden fences)

Walls on one owner’s land used by other owners (2 or more) to separate their buildings are also party walls.

Party structures

You can also have a ‘party structure’. This could be a floor or other structure that separates buildings or parts of buildings with different owners, eg flats.

Party wall agreements are different from planning permission or building regulations approval.

There are different rules in Scotland and Northern Ireland.

Work you must tell your neighbour about

You must tell your neighbour if you want to:

build on or at the boundary of your 2 properties

work on an existing party wall or party structure

dig below and near to the foundation level of their (your neighbour) property

Examples of this type of work include:

building a new wall

cutting into a party wall

making a party wall taller, shorter or deeper

removing chimneys from a party wall

knocking down and rebuilding a party wall

Find more details of work you need to tell your neighbour about in the party wall explanatory booklet.

Your neighbours can’t stop you from making changes to your property that are within the law, but they can affect how and when your works are carried out.

What you don’t need to tell them (Your neighbours) about

You don’t need to tell your neighbour about minor changes, eg plastering, adding or replacing electrical wiring or sockets, or drilling to put up shelves or cabinets.

When and how to tell them (Your neighbours)

You must give notice to your neighbour between 2 months and a year before you plan to start building works. Include what you plan on doing.

You can speak to your neighbour to explain the work you want to carry out, before giving notice in writing.

Find letter templates and more information on giving notice in the party wall explanatory booklet.

Any agreement you reach should be in writing.

Reaching an agreement with your neighbours

Once you’ve given notice your neighbour can:

give consent in writing

refuse consent, which will start the dispute resolution process

serve a counter notice requesting additional works be done at the same time (they (your neighbour)’ll have to pay for these if they (your neighbour) benefit from the works)

Your neighbour must let you know in writing within 14 days if they (your neighbour) consent to your notice, and you must do the same with any counter notice. A counter notice must be served within a month of the first notice.

Find examples of counter notice letters in the party wall booklet.

Your neighbours need to respond to the notice (your notice). You can’t assume that no response means they agree to the works.

The dispute resolution process will also start if they (Your neighbours) don’t respond to your notice within the given time.

Who pays for the work

You need to pay for any building works that you start on a party wall (party wall).

Your neighbour may have to meet a share of the cost if the work needs to be done because of defects or lack of repair. They will also need to pay if they ask for additional works to be done that will benefit them.

An appointed surveyor will set out who pays what if you can’t agree.

If you can't agree

You must appoint a surveyor if you and your neighbour can’t agree. You can appoint a surveyor together or each appoint your own. The surveyors will then agree on a ‘party wall award’.

This (a ‘party wall award’) is a legal document which says:

what work should happen

how and when it (any building works that you start on a party wall (party wall)) will be carried out

who will pay for which part and how much will be paid (including surveyor’s fees)

You can’t act as your own surveyor.

If your neighbour doesn’t appoint a surveyor

You can appoint a surveyor on behalf of your neighbour if they (your neighbour) refuse or fail to do so themselves (your neighbour).

If you don’t agree with the award (a ‘party wall award’)

You can appeal against an award at a county court within 14 days of receiving it. You need to file an appellant’s notice in a county court, explaining why you’re appealing.

When works begin

When carrying out building works you must:

avoid causing unnecessary inconvenience

protect your neighbour’s property from damage caused by the works (works), and fix or pay for any damage that is caused

Access to your neighbour’s property

Your neighbour (your neighbour’s) must allow surveyors and workmen access to their (your neighbour’s) property (your neighbour’s property) during usual working hours to carry out the building works. They must be given 14 days’ notice except in an emergency.


Squatting and the law

Overview

Squatting is when someone deliberately enters property without permission and lives there, or intends to live there. This is sometimes known as ‘adverse possession’.

Squatting in residential buildings (like a house or flat) is illegal. It can lead to 6 months in prison, a £5,000 fine or both.

Anyone who originally enters a property with the permission of the landlord is not a squatter. For example, if you’re renting a property and fall behind with rent payments you’re not squatting if you continue to live there.

Although squatting in non-residential building or land is not in itself a crime, it’s a crime to damage the property (a property).

It’s usually a crime not to leave land or property when you’re instructed to do so by:

the owner

the police

the council

a repossession order

Squatting in non-residential properties

A non-residential property is any building or land that is not designed to be lived in.

Simply being on another person’s non-residential property without their permission is not usually a crime. The police can take action if squatters commit other crimes when entering or staying in a property.

Crimes include:

causing damage when entering the property (a property)

causing damage while in the property (a property)

not leaving when they (squatters)’re told to by a court

stealing from the property (a property)

using utilities like electricity or gas without permission

fly-tipping

not obeying a noise abatement notice

Contact the police if you see someone breaking into or damaging property.

Squatters' rights to property

A long-term squatter can become the registered owner of property or land they’ve occupied without the owner’s permission.

Get legal advice from a conveyancer or solicitor if you’re a squatter in a property and want to claim ownership.

Who can apply

You can apply if you can prove:

you, or a succession of squatters, have occupied the property (a property) continuously for 10 years (12 years if it (a property)’s not registered with HM Land Registry)

you (or your predecessors) acted as owners of the property (a property) for the whole of that time (10 years)

you (or any of your predecessors) did not have the owner’s permission, for example the property (a property) was not originally rented to a squatter

If the property (a property)’s registered

Fill in a form for adverse possession.

Complete and sign a written ‘statement of truth’, or get a solicitor to prepare this for you.

Send your form and statement to the HM Land Registry Citizen Centre.

HM Land Registry will decide if your application is valid and will let the property owner know. The owner has 65 days to object - your application will usually be automatically rejected if they do.

You’ll be registered as the owner of the property (a property) if there’s no objection.

You can apply again after 2 years if:

the owner (the owner’s) has not tried to remove you

the property (a property) has not been reclaimed

you’re still in possession of the property (a property)

HM Land Registry will usually then register you as the owner.

If the property (a property)’s unregistered

Apply for first registration - include your statement (a written ‘statement of truth’) with your application.

HM Land Registry will:

inspect the property (a property) - you must pay a fee for this

decide if your application is valid

let the property owner know, if they (the property owner) have their (the property owner) details

You can try to come to an agreement with the owners if they object. HM Land Registry will arrange a tribunal to decide who owns the property (a property) if you cannot agree or do not want to.

You may have to pay the costs of the owner, such as their reasonable legal fees, no matter what the outcome.

Stop squatters legally possessing property

HM Land Registry will tell you if squatters apply for legal ownership of your property if it’s registered - you must take action if you want to keep it.

Get legal advice from a conveyancer or solicitor if squatters try to claim your property.

How you block an application depends on whether your property is registered with HM Land Registry or not.

Registered properties

You’ve 65 days to object to an application - HM Land Registry will tell you what you need to do.

HM Land Registry will reject the squatters’ application if you’ve got a valid objection.

You must take action to remove the squatters (the squatters’) and reclaim your property once the squatters’ claim (the squatters’ application) is rejected.

You will not be able to object again if you’ve done nothing within 2 years of the original application and the same squatters (the squatters’) reapply.

Unregistered properties

You can object to a squatter’s application. HM Land Registry will tell you what you need to do.

HM Land Registry may not be able to contact you if your property is not registered.

HM Land Registry will decide if your objection is valid - if it is they (HM Land Registry)’ll ask if you want to negotiate with the squatters (the squatters’), for example offer to sell them (the squatters’) the property (your property). You’ll be given time to do so.

A tribunal will decide who owns the property (your property) if you cannot agree - HM Land Registry (HM Land Registry) will arrange this.

Remove squatters

You can remove squatters using an interim possession order (IPO) or making a claim for possession.

Do not try to remove the squatters (the squatters’) yourself using force or the threat of force - you’re committing a crime if you do.

Get legal advice from a solicitor if you need help making a claim for possession.

Interim possession orders

You can only apply for an IPO if it’s been 28 days or less since you found out your property’s been squatted.

Fill in an application for an IPO (an interim possession order (IPO)) and send it to your local county court.

The court (your local county court) will send you confirmation of your IPO (an interim possession order (IPO)) within a few days. They (your local county court) will also send you documents that you must give to the squatters (the squatters’) within 48 hours.

After being served with an IPO squatters can be sent to prison if they do not:

leave your property within 24 hours

stay away from your property for 12 months

To get final possession of the property (your property), you must make a claim for possession. You can do this on your IPO application form or separately online.

Exceptions

You cannot use an IPO if:

you’re also making a claim for damages caused by the squatters (the squatters’) - instead you should make an ordinary claim for possession

you’re trying to evict former tenants, sub-tenants or licensees

Claim for possession

Make a claim for possession if it’s been more than 28 days since you found out about the squatters (the squatters’).

Where to get help

You may be classed as homeless if you’re squatting. Get advice from Shelter or Shelter in Wales.

You can also contact your council for help.

Report squatters

Call the police if you:

find people squatting in a residential property you own

see someone breaking into anywhere

think someone is squatting


Pay your Self Assessment tax bill

Overview

The deadlines for paying your tax bill are usually:

31 January - for any tax you owe for the previous tax year (known as a balancing payment) and your first payment on account

31 July for your second payment on account

If you delayed making a payment on account in July 2020 because of coronavirus (COVID-19), this will be added to your tax bill due by 31 January 2021.

Pay Self Assessment now

You can pay in regular monthly instalments, if you prefer.

You can get help if you cannot pay your tax bill on time.

This guide is also available in Welsh (Cymraeg).

Ways to pay

Make sure you pay HM Revenue and Customs (HMRC) by the deadline. You’ll be charged interest and may have to pay a penalty if your payment is late.

The time you need to allow depends on how you pay.

You can no longer pay at the Post Office.

Same or next day

through your online bank account

online or telephone banking (Faster Payments)

CHAPS

by debit or corporate credit card online

at your bank or building society

You need a paying-in slip from HMRC (HM Revenue and Customs (HMRC)) to pay at a bank or building society.

3 working days

Bacs

Direct Debit (if you’ve set one up with HMRC (HM Revenue and Customs (HMRC)) before)

by cheque through the post

5 working days

Direct Debit (if you have not set one up with HMRC (HM Revenue and Customs (HMRC)) before)

If the deadline falls on a weekend or bank holiday, make sure your payment reaches HMRC (HM Revenue and Customs (HMRC)) on the last working day before (unless you’re paying by Faster Payments or by debit or credit card).

Problems with payment services

Online payment services may be slow during busy times. Check if there are any current problems or times they are not available.

Direct Debit

Set up a Direct Debit through your HM Revenue and Customs (HMRC) online account to make single payments for 31 January.

You can also set up another Direct Debit if you need to make a payment on account.

You’ll need to set up single payments each time you want to pay by Direct Debit.

Reference number

You’ll need to use your 11-character payment reference. This is your 10-digit Unique Taxpayer Reference (UTR) followed by the letter ‘K’.

You’ll find it (your 11-character payment reference) either on your:

HMRC (HM Revenue and Customs (HMRC)) online account

paying-in slip, if you get paper statements

Your payment may be delayed if you use the wrong reference number.

Allow 5 working days to process a Direct Debit the first time you set one up. It should take 3 working days the next time if you’re using the same bank details.

If you’re unable to pay your Self-Assessment tax bill in full by card, you should use another payment method like a bank transfer.

Make an online or telephone bank transfer

You can pay your Self Assessment bill using Faster Payments, CHAPS or Bacs.

Pay by Faster Payments, CHAPS or Bacs

Your bill will tell you which account to pay in to. If you do not have a bill, or you’re not sure, use HMRC Cumbernauld.

Account details to use

Sort code | Account number | Account name

08 32 10 | 12001039 | HMRC Cumbernauld

08 32 10 | 12001020 | HMRC Shipley

If your account is overseas

Bank identifier code (BIC) | Account number (IBAN) | Account name

BARCGB22 | GB62BARC20114770297690 | HMRC Cumbernauld

BARCGB22 | GB03BARC20114783977692 | HMRC Shipley

What you’ll need

You’ll need to use your 11-character payment reference when you pay. This is your 10-digit Unique Taxpayer Reference (UTR) followed by the letter ‘K’.

You can find it (your 11-character payment reference) on your:

HMRC (HMRC Shipley) online account

How long it takes

Payments by Faster Payments (online or telephone banking) usually reach HM Revenue and Customs (HMRC) on the same or next day, including weekends and bank holidays.

CHAPS payments usually reach HMRC (HM Revenue and Customs (HMRC)) the same working day if you pay within your bank’s processing times.

Bacs payments usually take 3 working days.

Payments from overseas may take longer - check with your bank.

Multiple payments by CHAPS

Send an online CHAPS enquiry form if you want to make a single CHAPS payment for multiple Self Assessment bills, using more than one payment reference number.

HMRC’s (HM Revenue and Customs (HMRC)) banking address is:

Approve a payment through your online bank account

You can pay your Self Assessment bill directly using your online or mobile bank account.

When you’re ready to pay, select ‘start a payment’ and then ‘pay by bank account’. You’ll then be directed to sign in to your online or mobile banking account to approve your Self Assessment payment.

The payment is usually instant but sometimes it takes up to 2 hours to show in your account (your online or mobile banking account).

You’ll need to have your online banking details ready to pay this way.

By debit or corporate credit card online

You can pay online.

There’s a fee if you pay by corporate credit card or corporate debit card. The fee is not refundable.

There’s no fee if you pay by personal debit card.

You cannot pay by personal credit card.

Use your 11-character payment reference when you pay. This is your 10-digit Unique Taxpayer Reference (UTR) followed by the letter ‘K’. You’ll find it either:

in your HMRC (HM Revenue and Customs (HMRC)) online account

on your paying-in slip, if you get paper statements

HMRC (HM Revenue and Customs (HMRC)) will accept your payment on the date you make it, not the date it reaches their (HM Revenue and Customs (HMRC)) account - including on bank holidays and weekends.

If you’re unable to pay your Self Assessment tax bill in full by card, you should use another payment method like a bank transfer.

At your bank or building society

You can only pay at your branch by cash or cheque if you both:

still get paper statements from HM Revenue and Customs (HMRC)

have the paying-in slip HMRC (HM Revenue and Customs (HMRC)) sent you

Make your cheque payable to ‘HM Revenue and Customs only’ (HM Revenue and Customs (HMRC)).

Write your 11-character payment reference on the back of the cheque (your cheque). This is your 10-digit Unique Taxpayer Reference (UTR) followed by the letter ‘K’. You’ll find the reference number on the paying-in slip (the paying-in slip HMRC (HM Revenue and Customs (HMRC)) sent).

HMRC (HM Revenue and Customs (HMRC)) will accept your payment on the date you make it, and not the date it reaches their (HM Revenue and Customs (HMRC)) account (as long as you pay from Monday to Friday).

If you do not have a paying-in slip

You’ll need to pay by another method instead, for example:

debit or corporate credit card online

online or telephone banking

Direct Debit

By cheque through the post

You can send a cheque by post to HM Revenue and Customs (HMRC).

You do not need to include a street name, city name or PO box with this address.

Allow 3 working days for your payment to reach HMRC (HM Revenue and Customs (HMRC)).

What to include

Make your cheque payable to ‘HM Revenue and Customs only’.

Write your 11-character payment reference on the back of the cheque (your cheque). This (your 11-character payment reference) is your 10-digit Unique Taxpayer Reference (UTR) followed by the letter ‘K’. You’ll find this (your 11-character payment reference) on your payslip.

Include the payslip HMRC (HM Revenue and Customs (HMRC)) sent you (if you still get paper statements). Do not fold the payslip or cheque or fasten them together.

Your payment may be delayed if you do not fill in your cheque correctly.

If you do not have an HMRC (HM Revenue and Customs (HMRC)) payslip

You can print a slip to use to pay by post. You cannot use this at a bank.

Pay in instalments

If you’ve already filed your Self Assessment tax return, you might be able to pay the bill in instalments.

What you need to do depends on whether you want to:

make payments against your latest bill

make advance payments against your next bill

If you cannot afford to pay your latest bill

You can set up a payment plan to spread the cost of your latest Self Assessment bill (the bill) if all the following apply:

you owe £30,000 or less

you do not have any other payment plans or debts with HMRC (HM Revenue and Customs (HMRC))

your tax returns are up to date

it’s less than 60 days after the payment deadline

You can choose how much to pay straight away and how much you want to pay each month. You’ll have to pay interest.

If you don’t keep up with your repayments, HM Revenue and Customs (HMRC) can ask you to pay everything you owe.

There are 2 ways you can set up a payment plan:

set up a payment plan online

call the Payment Support Service

If you want to make regular payments in advance

You can set up a budget payment plan if you want to put aside money to cover your next Self Assessment tax bill.

This is different from payments on account, which you normally make once every 6 months towards your next tax bill.

The budget payment plan (a budget payment plan) lets you:

decide how much to pay each week or month

stop paying for up to 6 months

You must be up to date with your previous Self Assessment payments.

Set up your plan using your HM Revenue and Customs (HMRC) online account. Go to the Direct Debit section and choose the budget payment option when filling in the Direct Debit form.

If the amount in your budget payment plan (a budget payment plan) does not cover your next bill in full, you’ll need to pay the difference by the payment deadlines.

Through your tax code

You can pay your Self Assessment bill through your PAYE tax code as long as all these apply:

you owe less than £3,000 on your tax bill

you already pay tax through PAYE, for example you’re an employee or you get a company pension

you submitted your paper tax return by 31 October or your online tax return online by 30 December

How it’s set up

HM Revenue and Customs (HMRC) will automatically collect what you owe through your tax code if you meet all 3 conditions, unless you’ve specifically asked them not to (on your tax return).

If you’re not eligible, you will not be able to pay this way.

When you cannot pay through your tax code

You will not be able to pay your tax bill through your PAYE tax code if:

you do not have enough PAYE income for HMRC (HM Revenue and Customs (HMRC)) to collect it

you’d pay more than 50% of your PAYE income in tax

you’d end up paying more than twice as much tax as you normally do

If you’re self-employed you cannot pay Class 2 National Insurance through your tax code, unless it’s been due since before 6 April 2015. You must use one of the other ways to pay by the deadline instead.

How deductions are made

The tax you owe will be taken from your salary or pension in equal instalments over 12 months, along with your usual tax deductions.

Check your payment has been received

View your HM Revenue and Customs (HM Revenue and Customs (HMRC)) online account to check if your payment’s been received - it should show as paid between 3 to 6 working days later.

If paying by post, you can include a letter with your payment to ask for a receipt from HMRC (HM Revenue and Customs (HMRC)).


Apply to bankrupt someone who owes you money

Overview

You have to present a bankruptcy petition to a court if you want to bankrupt someone because they owe you money.

There are also other ways to recover money you’re owed.

A bankruptcy petition is an application to the court for someone’s assets to be taken and sold to pay their debts.

Presenting a petition can be complicated. Most people use a solicitor or other professional to help them.

Using a mediation service could be quicker and cheaper. Mediation is when an impartial person helps 2 sides work out an agreement.

You can contact the Insolvency Service if you have questions about making someone bankrupt.

How to present a petition

Prove you’re owed at least £5,000 or a share of debts totalling at least £5,000.

Check for other bankruptcy petitions against the person who owes you money (the ‘debtor’).

Fill in the forms and deliver them to the court.

Fees

The court fees to make someone bankrupt are:

£990 petition deposit (for managing the bankruptcy)

£280 for court costs

Pay the fees (The court fees to make someone bankrupt) using cash, postal order or a cheque made payable to ‘HM Courts and Tribunals Service’. You can pay by credit or debit card if you apply online.

Prove you're owed £5,000 or more

To make someone bankrupt you must be owed one of the following:

at least £5,000

a share of debts that total at least £5,000

You must provide evidence to the court that you’re owed this money (£5,000 or more). There are 2 ways to do this.

If you’ve issued a statutory demand (a request for payment) to the debtor, confirm that you did this by filling in a certificate of service (form N215).

Alternatively, get a sheriff’s or bailiff’s statement showing:

you got a court judgment for the money

the sheriff or bailiff (a sheriff’s or bailiff’s) could not recover enough assets to pay the debt

Check for other bankruptcy petitions

You must check if the debtor has had any bankruptcy petitions against them in the past 18 months. These checks are called ‘searches’.

Most petitions are presented in the area where the debtor lives. Government departments, including HM Revenue and Customs (HMRC), present all petitions in London.

Check for petitions presented in London

Carry out checks using the public computers at either:

the Rolls Building of the Royal Courts of Justice

the Central London County Court

It costs £11 to use the computers for 15 minutes. You can pay by debit or credit card or with cash.

Check for petitions presented in a county court outside London

Contact the county court for the area where the debtor lives.

They (the county court for the area where the debtor lives)’ll advise you how to check for petitions.

When you’ve made your checks

You must confirm you’ve carried out the searches by writing a declaration - use the wording below and fill in the petition number and the name of the court if applicable.

Sign and date the declaration (a declaration) and attach it (a declaration) to your petition form.

If there’s already a petition or bankruptcy order

It’s cheaper to support an existing petition than to present your own. Notify the petitioner using the contact details on the petition.

If there’s already a bankruptcy order, you cannot continue with your petition. Register as a creditor instead.

Apply

The bankruptcy petition form you fill in depends on whether:

the debtor has not responded to a statutory demand

the sheriff or bailiff could not recover enough assets to pay the debt

You’ll also need to provide the following as part of the petition:

a statement of truth confirming the details of your petition (the petition)

a declaration that you’ve carried out searches

evidence you’re owed money

Presenting the petition

How you present the petition will depend on the debtor’s (the debtor) circumstances.

Submit the petition online if the debtor either:

lives in London and owes you £50,000 or more

has ‘no fixed abode’ (no fixed or regular address)

It (the petition)’ll go to the High Court.

Otherwise, give the petition in person to the county court nearest to where the debtor lives or works.

If the debtor owns a business

Choose the court nearest to the debtor’s (the debtor) business address unless this changed in the last 6 months and they (the debtor)’ve been at their (the debtor) home address longer.

After you apply

You’ll need to give (‘serve’) a copy of the petition to the debtor in person.

If the debtor has an individual voluntary arrangement (IVA) you’ll also need to give a copy to the supervisor.

Send the court (the High Court) a certificate of service (form N215) to confirm you’ve done this.

If your case is with the High Court you can only submit the certificate of service (a certificate of service (form N215)) online. If it’s with another court you can send it (a certificate of service (form N215)) there by post.

If you cannot serve the petition to the debtor in person

You can ask the court (the High Court) for permission to serve it (the petition) in another way, for example by post.

You’ll have to provide a certificate of service confirming you’ve used a ‘substituted service’.

Court hearing

The court (the High Court) will tell you where and when the petition will be heard. This will be at least 14 days after you served the petition to the debtor.

The debtor can oppose the petition by giving the court (the High Court) a statement of truth at least 5 days before the hearing (Court hearing).

You must list the people that you want to appear and speak at the hearing (Court hearing).

The debtor and a supervisor of an IVA can also appear and speak at the hearing (Court hearing).

At the end of the hearing (Court hearing) the court (the High Court) can:

stay (delay or stop) the petition

dismiss the petition

adjourn (postpone) the hearing (Court hearing)

make a bankruptcy order

If the court (the High Court) dismisses your petition (the petition), you’ll get your petition deposit back.

Read more about what happens after a bankruptcy order is made.

After the hearing (Court hearing)

An Official Receiver at the Insolvency Service will deal with the early stages of a bankruptcy. They will contact you within 12 weeks of the bankruptcy order being made.

Appeals

You can appeal to the court if your petition is rejected.

Check with the court where you made your petition (the High Court) (the petition) for how to appeal.


Options for paying off your debts

Overview

If you owe people money (your ‘creditors’) you can make arrangements to pay your debts. Your options depend on the amount of money and assets you have.

Where you can get help

Speak to a debt adviser to get help choosing the best way to deal with your debt.

The Money Advice Service has information about debt management and free debt advisory services.

Paying off your debts

You can pay your debts in instalments by setting up:

a Debt Management Plan which is an agreement with your creditors managed by a financial company

an Administration Order  when you’ve had a county court judgment (CCJ) or a High Court judgment (HCJ) against you for debts under £5,000

an Individual Voluntary Arrangement which is managed by an insolvency practitioner

You can also get temporary protection from your creditors through the ‘Breathing Space’ scheme, while still making repayments. You’ll need to apply through a debt advisor.

In Scotland you can arrange a Debt Payment Programme from the Debt Arrangement Scheme.

You may also have the option of reaching an informal agreement with your creditors.

If you cannot pay off your debt

You can apply for a Debt Relief Order or Bankruptcy Order if you cannot pay your debts because you do not have enough money or assets you can sell.

If you cannot pay off your debts, you can be made bankrupt.

Breathing Space (Debt Respite Scheme) (the ‘Breathing Space’ scheme)

If you live in England or Wales, you can get temporary protection from your creditors while you get debt advice and make a plan. This scheme (the ‘Breathing Space’ scheme) is called ‘Breathing Space’.

You can get temporary protection for up to 60 days.

You’ll still need to make your debt repayments.

If you get it:

enforcement action cannot be taken against you

your creditors cannot contact you about debts included in your Breathing Space (the ‘Breathing Space’ scheme)

your creditors cannot add interest or charges to your debt

If you’re getting mental health crisis treatment, your protection from creditors will be longer. It will last for the length of your treatment, plus another 30 days.

How to apply for the Breathing Space scheme (the ‘Breathing Space’ scheme)

To apply for the ‘Breathing Space’ scheme, you need to talk to a debt adviser. They will submit an application on your behalf if it’s the right thing to do.

You can find a free debt adviser on the Money Advice Service website. You can get confidential advice online, over the phone or in person.

If you’re receiving mental health treatment and cannot speak to a debt adviser, someone else can do so on your behalf.

Costs

It’s free to apply for ‘Breathing Space’, but some debt advisers may charge you a fee.

Eligibility

You must:

not have a debt relief order (DRO), an individual voluntary arrangement (IVA), an interim order, or be an undischarged bankrupt at the time you apply

not already be using the ‘Breathing Space’ scheme

not have used the ‘Breathing Space’ scheme in the last 12 months, unless it was for a mental health crisis

Debt Management Plans

A Debt Management Plan is an agreement between you and your creditors to pay all of your debts.

Debt management plans are usually used when either:

you can only afford to pay creditors a small amount each month

you have debt problems but will be able to make repayments in a few months

You can arrange a plan with your creditors yourself or through a licensed debt management company for a fee. If you arrange this with a company:

you make regular payments to the company (a company)

the company (a company) shares the money out between your creditors

The Money Advice Service has information on organisations that can give you free advice about whether a Debt Management Plan is right for you.

Get a Debt Management Plan

Set up a plan with a debt management company authorised by the Financial Conduct Authority (FCA). Search the Financial Services Register for an authorised company.

The company (a company) works out your monthly payments. You’ll have to give details about your financial situation, for example your assets, debts, income and creditors.

The company (a company) contacts your creditors and asks them (your creditors) to agree to the plan (a plan) (they (your creditors) do not have to).

Unless stated in the agreement, your creditors can still:

ask you to pay your full debt at a later date

take action to recover their (your creditors) money even if you keep up your payments

Costs

Some companies will charge:

a set up fee

a handling fee each time you make a payment

Make sure you understand the costs of your plan and how you pay for it.

Eligibility

Debt Management Plans can only be used to pay ‘unsecured’ debts, for example debts that have not been guaranteed against your property.

Your responsibilities

Your plan can be cancelled if you do not keep up your repayments.

Administration orders

An administration order (Administration orders) is a way to deal with debt if you have a county court or High Court judgment against you and you cannot pay in full.

The debt must be less than £5,000.

You make 1 payment a month to your local court. The court will divide this money between your creditors.

Creditors listed on the administration order (Administration orders) cannot take any further action against you without the court’s permission.

The Money Advice Service has information on organisations that can give you free advice about whether an administration order (Administration orders) is right for you.

Get an administration order

Fill in an application for an administration order (form N92) and return it to your local court.

The court (the court’s) decides:

how much of your debt you have to repay, for example all or just part of it (The debt)

how much your monthly repayments will be

how long the arrangement lasts

The arrangement is known as a ‘composition order’ if you cannot pay all your debts.

Costs

There’s a court fee each time you make a payment. This cannot be more than 10% of your debt.

Eligibility

You must:

owe less than £5,000, including any interest and charges

owe money to at least 2 creditors

prove you can afford regular repayments, for example by giving details of your income

have a county court or High Court judgment against you, which you cannot pay in full

Your responsibilities

You must keep up your repayments or the court (the court’s) can:

ask your employer take money from your wages – known as an ‘attachment of earnings order’

cancel the arrangement

You may still be able to keep your business running, if you have one.

Public records

Your administration order (an administration order) is added to the Register of Judgments, Orders and Fines.

It (an administration order)’s usually removed 6 years after the date the order (an administration order) was made.

Your entry is marked as ‘satisfied’ if you repay your debts in full.

You can also ask the court (the court’s) for a ‘certificate of satisfaction’. To do this, write to the court (the court’s) and send a cheque for £15 (made payable to Her Majesty’s Courts and Tribunal Service).

Individual Voluntary Arrangements

An Individual Voluntary Arrangement (IVA) is an agreement with your creditors to pay all or part of your debts. You agree to make regular payments to an insolvency practitioner, who will divide this money between your creditors.

An IVA can give you more control of your assets than bankruptcy.

The Money Advice Service has information on organisations that can give you free advice about whether an IVA is right for you.

Get an Individual Voluntary Arrangement (IVA)

Use an insolvency practitioner to get an  IVA.

Your insolvency practitioner works out what you can afford to repay and how long the IVA (an  IVA) lasts. You’ll have to give details about your financial situation, for example your assets, debts, income and creditors.

Your insolvency practitioner (an insolvency practitioner) will contact your creditors. The IVA (an  IVA) (an  IVA) will start if the creditors holding 75% of your debts agree to it (an  IVA). It (an  IVA) will apply to all your creditors, including any who disagreed to it (an  IVA).

An IVA will stop your creditors taking action against you for your debts.

Costs

There are usually 2 fees:

a set up fee

a handling fee each time you make a payment

Make sure you know how much it’s going to cost before asking an insolvency practitioner to act for you.

Your responsibilities

Your IVA can be cancelled by the insolvency practitioner if you do not keep up your repayments. The insolvency practitioner can make you bankrupt.

Public records

Your IVA will be added to the Individual Insolvency Register. It (Your IVA)’s removed 3 months after the IVA (an  IVA) ends.

Debt Relief Orders

Debt Relief Orders (DROs) are one way to deal with your debts if you owe less than £20,000, do not have much spare income and do not own your home.

If you get one:

your creditors cannot recover their money without the court’s permission

you’re usually freed (‘discharged’) from your debts after 12 months

Get a Debt Relief Order

You get a DRO from the official receiver, an officer of the bankruptcy court, but you must apply through an authorised debt adviser. They’ll help you fill in the paperwork.

There’s a list of organisations that can help you find an authorised debt adviser in the guide to DROs.

The Money Advice Service has information about where to get free debt advice.

Costs

The official receiver’s (the official receiver, an officer of the bankruptcy court) fee is £90. Your debt adviser can tell you how and when to pay it. In some cases a charity may be able to help you with the cost - ask your debt adviser.

Eligibility

You’re generally eligible if you meet all of these criteria:

you owe less than £20,000

you’ve less than £50 a month spare income

you’ve less than £1,000 worth of assets

you’ve lived or worked in England and Wales within the last 3 years

you have not applied for a DRO within the last 6 years

Restrictions

You must follow rules called ‘restrictions’ if you get a DRO.

This (follow) means you cannot:

borrow more than £500 without telling the lender about your DRO

act as the director of a company

create, manage or promote a company without the court’s permission

manage a business without telling those you do business with about your DRO

If you want to open a bank account, you may also have to tell the bank or building society about your DRO.

Check the Individual Insolvency Register to see when the restrictions (rules called ‘restrictions’) end.

The restrictions (rules called ‘restrictions’) usually last 12 months. They (rules called ‘restrictions’) can be extended if careless or dishonest behaviour caused your debt problem. For example, you lied to get credit.

The official receiver (the official receiver, an officer of the bankruptcy court) will tell you if they (rules called ‘restrictions’) should be extended. To extend them (rules called ‘restrictions’), you’ll be asked to agree to a ‘Debt Relief Restrictions Undertaking’. The court can issue a ‘Debt Relief Restrictions Order’ if you do not agree.

What you need to know

While you have a DRO you still have to pay:

your rent and bills

certain debts, for example student loans, court fines

DROs can be cancelled if:

your finances improve

you do not co-operate with the official receiver (the official receiver, an officer of the bankruptcy court) - for example you do not give them (the official receiver, an officer of the bankruptcy court) the information they (the official receiver, an officer of the bankruptcy court) ask for

If you get new debt after your DRO is approved you could:

get a bankruptcy order

be prosecuted if you do not tell new creditors about your DRO

Your DRO is added to the Individual Insolvency Register - it (your DRO)’s removed 3 months after the DRO (your DRO) ends.

Your DRO will stay on your credit record for 6 years.


If you do not pay your tax bill

Overview

If you do not pay your tax bill on time and cannot make an alternative arrangement to pay, HM Revenue and Customs (HMRC) can take ‘enforcement action’ to recover any tax you owe.

You can usually avoid enforcement action by contacting HMRC (HM Revenue and Customs (HMRC)) as soon as you know you’ve missed a tax payment or cannot pay on time.

They (HM Revenue and Customs (HMRC)) may agree to let you pay what you owe in instalments, or give you more time to pay.

Otherwise, there are a number of enforcement actions HMRC (HM Revenue and Customs (HMRC)) can take to get the tax you owe (any tax you owe). They (HM Revenue and Customs (HMRC)) can:

collect what you owe through your earnings or pension

ask debt collection agencies to collect the money

take things you own and sell them (if you live in England, Wales or Northern Ireland)

take money directly from your bank account or building society (if you live in England, Wales or Northern Ireland)

take you to court

make you bankrupt

close down your business

If you do not pay your tax on time, you’ll probably have to pay interest on the outstanding amount. You may also have to pay a penalty or surcharge.

Through your earnings or pension

HM Revenue and Customs (HMRC) can make deductions from your salary or pension for debts for:

Self Assessment tax

Class 2 National Insurance

They (HM Revenue and Customs (HMRC))’ll change your tax code to do this (make).

If you’ve been paid too much in tax credits, HMRC (HM Revenue and Customs (HMRC)) can also take back the money in this way, or by making deductions from your Universal Credit payments.

How much

HMRC (HM Revenue and Customs (HMRC)) can take up to £3,000 each tax year if you earn less than £30,000.

If you earn more than this, HMRC (HM Revenue and Customs (HMRC)) can take higher amounts depending on your salary. They (HM Revenue and Customs (HMRC)) can take up to £17,000 each tax year if you earn £90,000 or more.

When you’ll start repaying the debt

HMRC (HM Revenue and Customs (HMRC)) will write to you before making changes to your tax code.

They (HM Revenue and Customs (HMRC)) can change your code (your tax code) immediately, which means you’ll receive less money the next time you’re paid or get income from a pension.

If you’ve not repaid the debt by the end of the tax year, HMRC (HM Revenue and Customs (HMRC)) can continue to collect what you owe through next year’s tax code.

If you do not want debt included in your tax code

You’ll need to either:

pay the full amount you owe

contact HMRC (HM Revenue and Customs (HMRC)) to arrange a payment plan

Debt collection agencies

HM Revenue and Customs (HMRC) can collect your debt through a private debt collection agency.

The agency (a private debt collection agency) will write to you and you should pay them (a private debt collection agency) directly.

Debt collection agencies used by HMRC (HM Revenue and Customs (HMRC)) are:

1st Locate (trading as LCS)

Advantis Credit Ltd

Bluestone Consumer Finance Limited (trading as Bluestone Credit Management)

BPO Collections Ltd

CCS Collect (also known as Commercial Collection Services Ltd)

Moorcroft

Oriel Collections Limited

Past Due Credit Solutions (PDCS)

Taking control of goods (distraint)

If you live in England, Wales or Northern Ireland, HM Revenue and Customs (HMRC) can take things you own, and sell them to pay your debt.

This (Taking) is called ‘taking control of goods’ (or ‘distraint’ in Northern Ireland). You’ll also be charged certain fees.

What happens when HMRC (HM Revenue and Customs (HMRC)) visits

An officer from HMRC (HM Revenue and Customs (HMRC)) will visit you and ask you to pay your debt.

If you do not pay, the officer (An officer from HMRC (HM Revenue and Customs (HMRC))) will make a list of your possessions that could be sold to cover both your debt and the costs of selling them (things you own), for example fees for auctioneers or advertising.

These possessions (things you own) can then be either:

taken immediately by the officer

left with you under a ‘Controlled Goods Agreement’ (‘Walking Possession’ in Northern Ireland)

They (things you own) can be sold if you do not pay within 7 days of the visit. If they (things you own) sell for more than you owe, you’ll be paid anything over. If they (things you own) sell for less, you’ll have to pay the difference.

Enforcement action fees

England and Wales

| Flat fee | Plus

Issuing a notice of enforcement | £75 | -

Take control of goods | £235 | 7.5% of the proportion of the main debt over £1,500

Goods taken and sold at auction | £110 | 7.5% of the proportion of the main debt over £1,500

Northern Ireland

| Fee

If you owe under £100 | £12.50

If you owe more than £100 | Between 0.25 to 12.5% depending on debt amount

Goods taken and sold at auction | Between 7.5% to 15% depending on auction

From your bank or building society account

If you live in England, Wales or Northern Ireland, HM Revenue and Customs (HMRC) can take the money you owe directly from your bank or building society account. This is called ‘direct recovery of debts’.

HMRC (HM Revenue and Customs (HMRC)) will only do this (take) if you:

have repeatedly refused to pay what you owe

have received a face-to-face visit from them (HM Revenue and Customs (HMRC)) to discuss your debt

would have at least £5,000 in your account after they (HM Revenue and Customs (HMRC))’ve taken the debt (your debt)

If HMRC (HM Revenue and Customs (HMRC)) plans to take money from your account

HMRC (HM Revenue and Customs (HMRC)) will write to tell you:

what they (HM Revenue and Customs (HMRC)) plan to do

what the process will involve

how to contact them (HM Revenue and Customs (HMRC)) with any queries

Court action

If HM Revenue and Customs (HMRC) takes you to court, you may have to pay court fees and HMRC’s (HM Revenue and Customs (HMRC)) costs as well as the tax you owe.

HMRC (HM Revenue and Customs (HMRC)) can start magistrates court (Magistrates court (England, Wales and Northern Ireland)) proceedings against you if:

you have separate debts of £2,000 each or less

you’ve owed the money for under a year

You’ll get a summons before the hearing explaining what you owe and where and when the hearing will be. If you pay, you will not have to go to court.

If you disagree with the amount on the summons, you’ll need to contact HMRC (HM Revenue and Customs (HMRC)) before your case goes to court.

If you do not pay, HMRC (HM Revenue and Customs (HMRC)) can ask the court to:

send bailiffs to take and sell things that you own to cover the debt

make you bankrupt or close down your company

County court (England and Wales)

The court will write to you explaining how much you owe and what you need to do.

If you disagree with the amount you’re being asked to pay, you may need to go to court to explain why.

take the money directly from your earnings

order someone who owes you money to pay your debt

place a charge on your property

Sheriff court (Scotland)

HMRC (HM Revenue and Customs (HMRC)) will apply to the court (Sheriff court (Scotland)) for a warrant to collect your debt. You’ll have 14 days to pay from the date of the warrant.

take the money you owe directly from your pay or from your bank account

take and sell certain goods from your business premises or your property


Income Tax

Overview

Income Tax is a tax you pay on your income. You do not have to pay tax on all types of income.

This guide is also available in Welsh (Cymraeg).

You pay tax on things like:

money you earn from employment

profits you make if you’re self-employed - including from services you sell through websites or apps

some state benefits

some grants, including the Self-Employment Income Support Scheme, the Small Business Grant Fund, the Retail, Hospitality and Leisure Grant Fund, the Coronavirus Job Retention Scheme and the Test and Trace Support Payment in England (or the Self-isolation Support Payment in Scotland and the Self-isolation Support Scheme in Wales)

most pensions, including state pensions, company and personal pensions and retirement annuities

rental income (unless you’re a live-in landlord and get less than the rent a room limit)

benefits you get from your job

income from a trust

interest on savings over your savings allowance

You do not pay tax on things like:

the first £1,000 of income from self-employment - this is your ‘trading allowance’

the first £1,000 of income from property you rent (unless you’re using the Rent a Room Scheme)

income from tax-exempt accounts, like Individual Savings Accounts (ISAs) and National Savings Certificates

dividends from company shares under your dividends allowance

some state benefits

premium bond or National Lottery wins

rent you get from a lodger in your house that’s below the rent a room limit

If you only occasionally sell items or rent out property (for example through auction websites or short-term rental apps), check if you need to tell HMRC about this income.

Income Tax allowances and reliefs

Most people in the UK get a Personal Allowance of tax-free income. This is the amount of income you can have before you pay tax.

The amount of tax you pay can also be reduced by tax reliefs if you qualify for them.

How you pay Income Tax

Pay As You Earn (PAYE)

Most people pay Income Tax through PAYE. This is the system your employer or pension provider uses to take Income Tax and National Insurance contributions before they pay your wages or pension. Your tax code tells your employer how much to deduct.

Tax on state benefits

Your tax code can take account of taxable state benefits, so if you owe tax on them (for example for the State Pension) it (Tax on state benefits)’s usually taken automatically from your other income.

If the State Pension is your only income, HM Revenue and Customs (HMRC) will write to you if you owe Income Tax. You may need to fill in a Self Assessment tax return.

Self Assessment tax returns

If your financial affairs are more complex (for example you’re self-employed or have a high income) you may pay Income Tax and National Insurance through Self Assessment. You’ll need to fill in a tax return every year.

You must also fill in a tax return if you earned more than either:

£1,000 from self-employment

£2,500 from other untaxed income, for example from tips or renting out a property

Contact the Income Tax helpline if your income from renting out a property was between £1,000 and £2,500.

Tax-free and taxable state benefits

State benefits that are taxable

The most common benefits that you pay Income Tax on are:

Bereavement Allowance (previously Widow’s pension)

Carer’s Allowance

contribution-based Employment and Support Allowance (ESA)

Incapacity Benefit (from the 29th week you get it)

Jobseeker’s Allowance (JSA)

pensions paid by the Industrial Death Benefit scheme

the State Pension

Widowed Parent’s Allowance

Tax-free state benefits

The most common state benefits you do not have to pay Income Tax on are:

Attendance Allowance

Bereavement support payment

Child Benefit (income-based - use the Child Benefit tax calculator to see if you’ll have to pay tax)

Child Tax Credit

Disability Living Allowance (DLA)

free TV licence for over-75s

Guardian’s Allowance

Housing Benefit

Income Support - though you may have to pay tax on Income Support if you’re involved in a strike

income-related Employment and Support Allowance (ESA)

Industrial Injuries Benefit

lump-sum bereavement payments

Maternity Allowance

Pension Credit

Personal Independence Payment (PIP)

Severe Disablement Allowance

Universal Credit

War Widow’s Pension

Winter Fuel Payments and Christmas Bonus

Working Tax Credit

Work out if you need to pay Income Tax

To work out if you should be paying Income Tax, follow these steps.

Add up all your taxable income, including taxable state benefits.

Work out your tax-free allowances.

Take your tax-free allowances away from your taxable income (all your taxable income, including taxable state benefits).

If there’s anything left, you’re a taxpayer. Contact the Income Tax helpline if you’re not already paying tax.

If there’s nothing left, you should not be paying tax and may be due a refund.

Check you're paying the right amount

You can see if you’re paying the right amount of Income Tax online. For the current tax year (6 April 2021 to 5 April 2022), you can:

check your Income Tax payments

work out how much Income Tax you should be paying

You can also:

check how much Income Tax you paid last year (6 April 2020 to 5 April 2021)

estimate how much Income Tax you should have paid in a previous year

If you cannot use these services, you can check you’ve paid the right tax by contacting HMRC or by getting help from an accountant.

There’s a different way to change a Self Assessment tax return.


Marriage Allowance

How it works

Marriage Allowance lets you transfer £1,260 of your Personal Allowance to your husband, wife or civil partner.

This (transfer) reduces their (your husband, wife or civil partner) tax by up to £252 in the tax year (6 April to 5 April the next year).

This guide is also available in Welsh (Cymraeg).

To benefit as a couple, you (as the lower earner) must normally have an income below your Personal Allowance - this is usually £12,570.

You can calculate how much tax you could save as a couple. You should call the Income Tax helpline instead if you receive other income such as dividends, savings or benefits from your job. You can also call if you do not know what your taxable income is.

When you transfer some of your Personal Allowance to your husband, wife or civil partner you might have to pay more tax yourself, but you could still pay less as a couple.

Who can apply

You can benefit from Marriage Allowance if all the following apply:

you’re married or in a civil partnership

you do not pay Income Tax or your income is below your Personal Allowance (usually £12,570)

your partner pays Income Tax at the basic rate, which usually means their income is between £12,571 and £50,270 before they receive Marriage Allowance

You cannot claim Marriage Allowance if you’re living together but you’re not married or in a civil partnership.

If you’re in Scotland, your partner must pay the starter, basic or intermediate rate, which usually means their income is between £12,571 and £43,662.

It will not affect your application for Marriage Allowance if you or your partner:

are currently receiving a pension

live abroad - as long as you get a Personal Allowance.

If you or your partner were born before 6 April 1935, you might benefit more as a couple by applying for Married Couple’s Allowance instead.

You cannot get Marriage Allowance and Married Couple’s Allowance at the same time.

Backdating your claim

You can backdate your (your claim) claim to include any tax year since 5 April 2017 that you were eligible for Marriage Allowance.

Your partner’s tax bill will be reduced depending on the Personal Allowance rate for the years you’re backdating.

If your partner has died since 5 April 2017 you can still claim - phone the Income Tax helpline. If your partner was the lower earner, the person responsible for managing their tax affairs needs to phone.

Stopping Marriage Allowance

Your Personal Allowance will transfer automatically to your partner every year until you cancel Marriage Allowance - for example if your income changes or your relationship ends.

How to apply

It’s free to apply for Marriage Allowance.

If both of you have no income other than your wages, then the person who earns the least should make the claim.

If either of you gets other income, such as dividends or savings, you may need to work out who should claim. You can call the Income Tax helpline if you’re unsure.

Changes to your Personal Allowances will be backdated to the start of the tax year (6 April) if your application is successful.

How your Personal Allowances change

HM Revenue and Customs (HMRC) will give your partner the allowance you have transferred to them either:

by changing their (your partner) tax code - this can take up to 2 months

when they (your partner) send their (your partner) Self Assessment tax return

If your new Personal Allowance is lower than your income after you’ve made a claim, you might have to pay some income tax. However, you (both of you) might still benefit as a couple.

How your tax code will change

You and your partner will get new tax codes that reflect the transferred allowance (your partner). Your tax code will end with:

‘M’ if you are receiving the allowance (your partner)

‘N’ if you are transferring the allowance (your partner)

Your tax code will also change if you’re employed or get a pension.

If your circumstances change

You must cancel Marriage Allowance if any of the following apply:

your relationship ends - because you’ve divorced, ended (‘dissolved’) your civil partnership or legally separated

your income changes and you’re no longer eligible

you no longer want to claim

If your income changes and you’re not sure if you should still claim, call HMRC (HM Revenue and Customs (HMRC)) Marriage Allowance enquiries.

How to cancel

Either of you can cancel if your relationship has ended.

If you’re cancelling for another reason, the person who made the claim must cancel.

Online

You can cancel Marriage Allowance online. You’ll be asked to prove your identity using information HMRC (HM Revenue and Customs (HMRC)) holds about you.

By phone

Contact Marriage Allowance enquiries (HMRC (HM Revenue and Customs (HMRC)) Marriage Allowance enquiries) to cancel or get help.

After you cancel

If you cancel because of a change of income, the allowance (Marriage Allowance) will run until the end of the tax year (5 April).

If your relationship has ended, the change may be backdated to the start of the tax year (6 April).

This (backdated) might mean you or your partner underpays tax for the year (the tax year (6 April)).

If your partner dies

If your partner dies after you’ve transferred some of your Personal Allowance to them (your partner):

their (your partner) estate will be treated as having the increased Personal Allowance

your Personal Allowance will go back to the normal amount

If your partner transferred some of their Personal Allowance to you before they died:

your Personal Allowance will remain at the higher level (the normal amount) until the end of the tax year (5 April)

their (your partner) estate will be treated as having the smaller amount