Changes to council tax rules ‘needed now’, says charity

The Money Advice Trust has urged the government to make changes to the way local authorities are able to collect council tax debt, after figures showed that £3.6 billion in council tax was owed before the coronavirus outbreak.

The government’s temporary ban on bailiff visits is set to expire on 23 August. The charity is concerned that with £3.6 billion owed before coronavirus – an increase of £345 million on the previous year – even more households will now be struggling with council tax debt as a result of the outbreak.

If changes are not made to ensure council tax arrears are recovered in a fair and affordable way, the Money Advice Trust and other debt charities fear that more households will be pushed into financial difficulty at an already challenging time.

Current government regulations mean councils often use heavy-handed tactics to collect outstanding debts, including resorting to bailiffs. This can increase financial pressures on already struggling households through additional fees and charges. Councils are also the largest users of bailiffs – 1.4 million council tax debts were passed to bailiffs by councils in England and Wales in 2018/19.

The charity is calling for the government to make changes to council tax regulations to give councils more flexibility to recover debts affordably without resorting to the court process, including to: introduce a ‘pre-action protocol’ for councils to follow before beginning to enforce council tax recovery; stop people becoming automatically liable for their entire annual bill when they fall behind on installments; encourage councils to collect debts over more than one year by changing collection rate targets; and provide more hardship funding to councils to reduce council tax arrears accrued as a result of coronavirus.

The Money Advice Trust’s Jane Tully said: “These new figures show the scale of council tax arrears even before Covid-19 hit. The impact of the outbreak means many more households have already fallen behind – leaving millions at risk, particularly if councils continue down collection routes that can push residents further into financial difficulty.

“The government has to move quickly to ensure local authorities are able to collect council tax debt in a fair and proportionate way.  This needs to include changing collection rules to ensure people are given the time they need to repay and introducing a ‘pre-action protocol’ councils would be required to follow before starting enforcement action.

“With the government’s ban on council tax bailiff visits set to end this Sunday, we also need to see urgent guidance put in place to protect people from bailiff action as the coronavirus outbreak continues to impact households.  Without this government guidance, the ban on bailiff visits should not be allowed to expire.”