The way Britons pay council tax is set to change, as the government considers new rules to make the billing process more manageable.
A consultation is underway seeking feedback on proposed reforms, with the government saying it will “make life easier for working people”.
Under current rules, council tax can be paid in either one lump sum or in 10 equal monthly instalments but you can opt to pay it 12 times per year instead.
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If new rules take effect, the default way to pay council tax will be in 12 monthly instalments, rather than 10.
This will bring the monthly cost down by £38 per month for a household on council tax band D, according to the government, though the annual cost of council tax wouldn’t decrease.
The government hopes that by spreading the cost of council tax across a longer time period will “protect” residents from falling behind on their council tax payments and reduce the risk that punitive measures will be taken against them.
If you fall behind on paying your council tax, councils currently have the power to demand the full outstanding council tax balance three weeks after you miss a single payment.
After another three weeks, if the payment is still outstanding, the council can send bailiffs to collect the debt.
Martin Lewis, who has long campaigned for a shakeup to this system, said it is “ridiculous” for councils to demand payment for a year when one instalment is missed. He asked: “How can people who can’t afford to pay for a month, suddenly pay for a year?”
Lewis added: “No commercial lender is allowed to behave like this, meaning constituents are treated worse than consumers.”
However, new rules outlined in the consultation could make the debt collection process much less punishing for those in debt.
Instead of letting councils demand a full year’s payment after just one missed instalment, taxpayers will be given better protection to stop their debt spiralling after falling behind on their bills.
The consultation looks at slowing down the time it takes for outstanding debt to be escalated to bailiffs, capping the added costs when going to court over the debt, and making it easier for those in debt to restart their payments.
Lewis called many parts of the council tax system “broken” and said he was “delighted the government has listened and rapidly launched this long-due consultation, including many of the administration areas I hear the most complaints on”.
Reassessing council tax bands
The brief of the consultation also includes a review of how residents can request councils to reassess the tax band of their home.
The government is considering ways they can remove barriers from households who want to check if their home is in the right tax band and has asked for feedback in the consultation.
No policy or change to the current rules has been specifically proposed.
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