Claims to recover unpaid council tax are subject to a 6 year limitation period contained in the Council Tax (Administration and Enforcement) Regulations 1992 (SI 1992/613), specifically reg.34 (3). Reg 34(3) reads, so far as is relevant:
‘…no application may be instituted in respect of a sum after the period of six years beginning with the day on which it became due under Part V.’
The application for a liabilty order must be made within 6 years starting with the day the council tax became due. Another way of putting this is, as Lloyd LJ said in Bolsover District Council v Ashfield Nominees Ltd  EWCA Civ 1129  Bus LR 492, at paragraph 1:
‘A liability order is limited to amounts of council tax which became due within the period of six years before the application to the magistrates' court.’
By analogy, this time limit applies to the ability to found a bankruptcy petition or winding up petition on due but unpaid council tax. At paragraph 34, Lloyds LJ said:
‘I accept that, whereas unpaid council tax can rank as a debt for the purposes of the Insolvency Act 1986 even if no liability order has been made, this is subject to the proviso that, if the tax fell due for payment more than six years previously, so that a liability order could no longer be applied for in respect of that sum, it would not be a valid debt for the purposes of insolvency proceedings. That is no more than an application of the 1992 Regulations by analogy.’
It is interesting to note that a similar regulation applies to National Non-Domestic Rates (NNDR or Business Rates), namely, reg.12(3), which reads so far as relevant:
‘…no application may be instituted in respect of a sum after the period of 6 years beginning with the day on which it became due under Part II.’
In Re Karnos Property Co. Ltd (1989) 5 B.C.C. 14 (1988), Mervyn Davies J heard a case in which it was conceded by the Local Authority/Billing Authority that, after 6 years, the Local Authority/Billing Authority ceased to be a creditor of the ratepayer for the purposes of presenting a winding up petition. Mervyin Davies J said, at 17-18:
'[Counsel for the local authority] conceded, as I understand, that rates unpaid for six years and never the subject of a distress warrant were irrecoverable in any way; so that the local authority ceases to be a creditor and thus may not petition. But, said [Counsel for the local authority], once a distress warrant has been obtained it remains always available for execution and thus preserves the local authority its character as a creditor and ever able to petition. I do not accept this submission. If one assumes that the two distress warrants issued in this case remain available to the local authority, I do not think it follows that the provisions of the Limitation Acts that I have mentioned do not operate to stop the presentation of a petition. The effect of sec. 2(1) of the 1939 Act (or sec. 9(1) of the 1980 Act) is that a petition may not be presented if six years have passed since the rates were demanded. There is nothing there to qualify the position if a distress warrant happens to be current. A petition lies not because a distress warrant has been or may be issued but because a local authority is a “creditor” as that word is and has been used in the Companies Acts...'
SIMON HILL © 2021
33 BEDFORD ROW
NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.
 See also in Bolsover District Council v Ashfield Nominees Ltd  EWCA Civ 1129  Bus LR 492, where Lloyd LJ said in respect to Preston Borough Council v Riley  BPIR 284, at paragraphs 11
'It had ... been held, as regards general rates, that if the amount in question had been due and unpaid for more than six years, it was time barred and therefore could not found the basis of a petition: see In re Karnos Property Co Ltd  BCLC 340 , following China v Harrow Urban District Council  1 QB 178 where the same factor was held to preclude an application for a distress warrant.'