A significant revamp of the council tax system is set to provide households with extended time to settle missed payments. Currently, individuals can become responsible for paying their outstanding council tax bill for the entire year just a few weeks after missing a single monthly payment. However, with the new changes, households will now have 63 days, roughly two months, to catch up on any outstanding payments, with administrative costs capped at £100.
Moreover, the process for claiming discounts for vulnerable individuals will be simplified. A universal application system will be implemented for the “Severe Mental Impairment” discount, which can potentially eliminate council tax bills entirely. This discount will also be renamed to “Significant Cognitive Impairment” to align with the terminology used in Wales.
Eligibility for the discount is not restricted to a definitive list, but can include individuals with conditions such as dementia, severe learning disabilities, multiple sclerosis, or those who have suffered a stroke. Certification of the condition by a doctor is required to qualify for the discount.
Additionally, the government will default council tax billing to a 12-month cycle instead of the current ten months, allowing households to spread their payments over a longer duration. While councils will still offer the option to pay over ten months if preferred, the change aims to provide more flexibility to taxpayers.
Consumer advocate Martin Lewis, a vocal proponent for reform in council debt collection practices, expressed approval for the changes. He highlighted the aggressive nature of current council tax debt collection processes and welcomed the move as a significant step towards improving the system.
Government officials echoed the sentiment of modernizing the council tax system to adapt to current realities. Minister for Local Government Alison McGovern emphasized the need for a fair and efficient system that benefits all taxpayers, including ensuring access to entitled discounts for vulnerable groups.
Local Government Secretary Steve Reed acknowledged the challenges faced by families in meeting council tax obligations and pledged to create a fairer system that supports those who fall behind. Reed credited the advocacy efforts of Martin Lewis and his charity for shedding light on the issue and driving positive change in the council tax system.