Local authorities have been forced to drop “aggressive” council tax debt collection practices in a move which will grant households more time to pay back missing instalments.
Under current rules, councils can demand payment for an entire year after just two weeks if a person misses just one monthly payment. Changes announced by the government will now see households given 63 days to settle up, with admin costs capped at £100.
The amendment will take effect from next year, the Ministry for Housing, Communities and Local Government (MHCLG) confirmed. It comes after a campaign by money expert Martin Lewis, who termed the current system “vicious” and “so aggressive it’d make banks blush”.
Council tax billing will also be changed from 10 months to 12 months by default, the government has said, in a bid to help households by spreading the cost over a longer period.
Housing and 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. I want to thank Martin Lewis and his charity for their tireless campaigning, shining a light on this crucial issue affecting millions of people.”
Reacting to the announcement, Mr Lewis said he was “genuinely moved”, adding council tax debt collection is “the most vicious and damaging form of legal debt collection out there – causing counterproductive misery for millions”. The money guru campaigned to change the measure with the Money and Mental Health Policy Institute charity, which he founded and chairs.
He added: “How people who can’t find a month’s money are expected to find a year’s, I don’t know. Yet if they can’t pay, within just three more weeks, they are often taken to court, have ‘admin costs’ added, and soon see bailiffs sent in. No commercial firm would be allowed to do anything close - constituents are treated worse than customers.”
The MHCLG noted that the current rules had become “outdated”, having not been changed since 1993.
The department also announced a change to the ‘severe mental impairment’ council tax discount, which gives a minimum of 25 per cent off a household’s bill. There will be a universal application form among councils to make this easier to claim from April 2027, and the name will be changed to the ‘significant cognitive impairment’ discount in a bid to combat stigma.
The Local Government Association has been contacted for comment.
