Government to extend council tax repayment window and cap enforcement costs

Under the current system, households that miss one monthly payment can lose the right to pay council tax in instalments and be asked to pay the entire outstanding sum in a single payment just two weeks later.

The Ministry of Housing, Communities and Local Government (MHCLG) said it will implement changes to the administration of bills from next year, which will extend the time period to 63 days to settle their bill.

It will also introduce a requirement for councils to work with households on a sustainable repayment plan.

Billing for council tax will also be shifted to 12-month payments by default, rather than the current 10 months.

In addition, the Government will cap the costs which councils can charge when seeking a liability order to £100, and will work with the sector on developing the steps councils must take before a person loses the right to pay in instalments and before enforcement action.

It also plans to publish non-statutory guidance on the steps once they are agreed.

Local Government Secretary Steve Reed said: "Too many families are facing aggressive enforcement action, with people left terrified of bailiffs knocking on the door because one month’s council tax bill was missed.

"We will stop this and make the system fairer by supporting families who fall behind."

Reed acknowledged the campaigning by Martin Lewis, who is the Founder and Chair of the Money and Mental Health Policy Institute, on the issue.

Responding to the announcement, Martin Lewis described council tax debt collections as "the most vicious and damaging form of legal debt collection out there", adding: "Currently, in England, if you miss a monthly payment, many councils, usually within three weeks, demand payment for the entire year. How people who can’t find a month’s money are expected to find a year’s I don’t know."

Adam Carey