Wrong side of the tax: Council tax debt collection needs to change
Council tax is important. It’s the largest property tax in England, and the revenue it raises accounts for 32% of local government funding. But for households, it is also a growing source of debt.
As of March 2019, the overall level of council tax arrears stood at £3.2bn - 7% more than the year before. Last year we helped 83,000 people in England with council tax arrears. It is the most common debt we see, impacting more than 1 in 4 of all those we help with a debt problem.
Our latest research finds that many people in council tax arrears can’t afford to pay it. They are often struggling with multiple debts, and don’t have the money to cover essential living costs.
But the debt collection process doesn’t account for this. Centrally-set regulations push councils to use inefficient and ineffective methods that push people into spirals of debt and don’t recover much money for councils.
Government should amend these regulations to make the system work better for people in debt and for councils.