(qlmbusinessnews.com . Thu 26th Jun, 2025) London, UK —
Calls for Compassionate Collection as Council Tax Arrears Reach Record Levels
Households across the UK are grappling with billions of pounds in outstanding council tax, with the situation worsening as projections foresee continuous hikes in these levies in the coming years.
Recent statistics reveal that local councils in England are owed a staggering £6.6 billion, with this figure swelling by an additional £642 million in the 12 months leading to April. When including Scotland and Wales, the overall indebted amount exceeds £8 billion.
This has led to calls from advocacy groups for a shift towards more compassionate methods of debt recovery for council tax, advocating for an end to the engagement of bailiffs.
At the heart of government financial planning, it emerges that the Treasury anticipates a 5% annual increase in council tax rates. Chief Secretary Darren Jones, during a spending review enquiry, confirmed this assumption.
Under current regulations, councils are permitted to amplify council tax by as much as 5%, a ceiling that can be exceeded subject to a local plebiscite or with governmental endorsement.
Despite the collection of £41.2 billion in council tax over the past year in England, reflecting a 7.2% rise from the previous year, the cumulative debt has ascended by 11%.
In Scotland and Wales, outstanding council tax arrears stand at £1.5 billion and £160 million, respectively, propelling the combined debt beyond £8 billion – a figure that dwarfs the quantity of unpaid energy bills across the three nations.
The approach to council tax debt in England has been criticised for disproportionately affecting those facing financial difficulties. Failure to meet payment deadlines can lead to demands for the entire year's council tax upfront, with subsequent enforcement actions potentially involving bailiffs.
Toby Murray of Debt Justice highlighted the vulnerability of those in arrears, emphasising the need for systemic reform over punitive measures.
In response to growing concerns, the government is contemplating adjustments to court debt fees and the criteria for full-year liability. Moreover, a revision of debt enforcement practices and bailiff conduct is underway, alongside proposals to standardise 12 monthly council tax payments instead of the traditional 10.
The Local Government Association underscored councils' obligation to collect taxes for public services but acknowledged the financial strain on low-income households. They called for adequate governmental support to facilitate council tax relief for those in need.
Citizens Advice advises individuals struggling to pay their council tax not to ignore bills or demands. Engaging with the council for manageable payment plans, exploring eligibility for discounts, or seeking breathing space schemes are recommended steps for those facing payment challenges.
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