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This is how a missed council tax bill of £167 can cost you £2,065

Written by: Danielle Levy
Local authorities’ aggressive collection methods for council tax are causing people serious financial harm, Citizens Advice has warned.

New research conducted by the charity showed that if a household misses an average council tax payment of £167 in the first month of the financial year, this can escalate and create a debt of over £2,065 in the space of nine weeks.

When someone falls behind on their council tax bill, they become liable for the rest of their annual bill after only two weeks. Two types of fees are then added to the original tax debt: court costs (typically £84) and bailiff fees, which tend to total £310.

Citizens Advice estimates that over £560m in fees were added to council tax debt in 2016/17 alone. This includes £300 million of bailiff fees, which the charity believes is particularly concerning as some of these fees have to be paid by the person in debt before any council tax arrears can be recovered by the local authority.

Council tax arrears represents a topic that is close to Citizens Advice’s heart, as it is the most common debt problem that it helps people with.

Further analysis from the charity shows that between 2010 and 2018, the amount of council tax debt has grown by 30%. It found that council tax arrears have risen by more than 6% in the last year alone.

In September, the National Audit Office said there was evidence that aggressive enforcement action has been ineffective, and can be harmful in situations when someone is struggling to pay their debt.

Time for change

Following the government’s announcement this month that it will review the way that local authorities collect council tax, Citizens Advice is calling for the following changes to be made to legislation:

  • Stop people being asked to pay their entire annual bill if they miss one monthly payment.
  • Add statutory guidance stating that councils must attempt to develop an affordable repayment plan for the arrears before taking the debt through the courts.
  • Let councils collect debts without having to use processes – such as a court order – which incurs fees for the person in debt.
  • Remove the threat of imprisonment for council tax arrears in England.

Gillian Guy, chief executive of Citizens Advice, commented: ““Through its council tax collection review, the government must fundamentally reform the regulations governing how local authorities collect debts.

“Punitive processes, such as charging a full year’s bill after a single monthly payment is missed, show how broken the system is – they both tie the hands of councils and force people into debt.”

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