Council tax is being reformed (Image: clubfoto via Getty Images)
A new council tax overhaul “is a step in the right direction” – but experts are cautioning that “it doesn’t tackle the core problem” of affordability. Vulnerable people will be granted additional time and assistance to clear their outstanding council tax debts under reforms designed to create a fairer system, announced by the Government on Wednesday.
Ministers confirmed amendments will be introduced to the administration of bills, which have remained unchanged since 1993 and have grown increasingly outdated, leaving people confronting unnecessary stress and anxiety. Under the existing system, missing a single monthly payment can leave households facing financial ruin as they become liable to pay the entire remaining sum in one lump payment just a fortnight later.
This will be revised from next year, with households afforded 63 days, approximately two months, to settle their bill and a requirement for councils to collaborate with them on a sustainable repayment arrangement. Council tax billing will also be switched to 12-month payments by default, rather than the current 10 months, alongside a cap on costs which councils can impose when pursuing a liability order – the mechanism through which councils recover overdue bills – set at £100.
Taryn Lee Johnston, owner at Lincoln-based The FCM Group, said she had witnessed the stress this causes within her own family.
She added: “These changes are a step in the right direction, but they don’t go far enough. I’ve seen how this plays out in real life. My son became the sole earner after his partner was diagnosed with a serious illness. They were doing everything they could to stay on top of things when a banking glitch meant one payment didn’t go through.
People are to be given more time to resolve issues (Image: coldsnowstorm via Getty Images)
“The full balance was then taken from his wages, leaving them with nothing for the rest of the month. That kind of pressure is devastating. Giving people more time to pay and spreading costs across the year will ease some of that strain. The biggest shift will come from how situations are handled, with more understanding, better communication and space for real circumstances to be taken into account.
“Council staff should be more understanding of those working and genuinely struggling. There’s also a bigger conversation around affordability. Many households are already stretched, so even small disruptions can have a huge impact.”
Harry Goodliffe, director at HTG Mortgages, argued that the fundamental issue remains unresolved.
He added: “Council tax shake-up could be helpful, but not a real solution. This is simply an overdue fix to a harsh system. Giving people more time and flexibility should really help ease some of the immediate stress.
“But in reality, it doesn’t tackle the core problem – council tax is still high and continuing to rise despite countless governments’ promises to reduce this within their manifesto. This is definitely a step in the right direction, but there are plenty more steps to climb.”
Samuel Mather-Holgate, managing director and IFA at Swindon-based Mather and Murray Financial, warned that councils could be ruthless towards those who fell behind on their payments.
He added: “Your local council has often been the most brutal to deal with if you fall behind on bills due to unforeseen circumstances. Strongman tactics and bailiffs at the door were common if you missed your council tax payment.
“It’s about time this was changed and vulnerable people aren’t as terrified as they once were. Your local authority should be putting their arm around your shoulder, not your throat, in times of need.”
