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Over a million households likely to build up council tax arrears

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26/06/2020
Figures suggest £500m of council tax has gone unpaid during the coronavirus outbreak, which could mean over 1.3 million households face arrears.

Three major UK charities – Citizens Advice, Money Advice Trust and Stepchange – are urging the government to make changes to council tax collection in the next two months.

It comes as the charities highlight 23 August as a pivotal day for households as bailiff visits will resume, the protections from evictions in the private rented sector will end and redundancies are expected to rise.

Research from Citizens Advice also revealed that those who are behind on their council tax because of coronavirus are twice as likely to have been shielding or at increased risk of the virus.

The charities warn that those already behind on council tax will face bailiff action to collect outstanding debts which is “harmful and inefficient”.

In 2018/19, bailiff activity added £200m of fees to people’s debts, but councils recovered less than 30p out of every pound of debt referred.

Councils are also the largest users of bailiffs with 1.4 million debts passed on by authorities in England and Wales in 2018/19.

And as figures show £500m of council tax has gone unpaid during the pandemic at a time when a number of councils face “precarious financial positions”, they may be left with little choice but to call in the bailiffs in August.

Central government reform is needed to resolve this problem before the bailiff ban is lifted and the charities are calling on changes to the council tax regulations to give councils more flexibility to recover debts outside the court process.

‘People face a nervous summer’

Gillian Guy, chief executive of Citizens Advice, said: “The government now has a two-month window of opportunity to make changes to tax collection that will help millions of people facing the prospect of spiralling debt. Over the last few years, Citizens Advice has helped hundreds of thousands of people with council tax arrears.

“Using bailiffs to collect debts is a blunt tool that’s extraordinarily damaging to those on the receiving end, and economically ineffective for councils. Former government ministers, backbenchers, charities, campaigners and councils themselves are lining up to call for change on this issue.

“People struggling with their council tax bills could now face a nervous summer waiting for the knock at the door. The government must take the opportunity to act to help avoid this.”

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