Council Tax arrears soar at 'worrying rate' amid concerns over missed payment rule
COUNCIL TAX arrears in England have risen to £4.4billion as of March 2021, new figures released by the Ministry of Housing, Communities and Local Government last week have shown.
PMQs: Boris Johnson responds to council tax criticism
This outstanding amount of £4.4billion is a cumulative figure, and includes Council Tax arrears that may stretch back a number of years. It marked an increase of £841million over the the figure for 2019-20.
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According to the Government, the amount in arrears is higher than in previous years due to the COVID-19 pandemic.
Figures show that in England last year, £1.5billion of council tax arrears were accrued, after any write off action had been accounted for.
However, The Money Advice Trust has warned that these outstanding amounts aren't "just a Covid problem".
It came as the charity, which runs National Debtline and Business Debtline, called for reform.
The Money Advice Trust also expressed concern over the current rules surrounding missed payments.
Joanna Elson CBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “Today’s figures highlight the significant impact that the coronavirus pandemic has had on people’s ability to pay their council tax bills, with £1.5billion of arrears accrued in England last year alone.
“However, council tax arrears are not just a Covid problem.
"Arrears were rising at a worrying rate even before Covid-19 hit, and the total amount of arrears, which now stands at £4.4bn, is unsustainable both for local authorities and for individual households.
“The Government now need to move to reform council tax collection rules to end the practice of people becoming liable for their entire annual bill after one missed payment, and to ensure people are given the time they need to repay.
“More also needs to be done to prevent people falling behind in the first place.
"Emergency Covid funding provided to local authorities to reduce council tax bills for those on low incomes has been a vital support for many and, without it, the overall arrears figure would likely have been much higher.
"The Government should now look to make increased funding for local council tax support permanent, to help ensure no low income household is tipped into financial difficulty by an unaffordable council tax bill.”
So what does happen if a person misses a Council Tax payment?
If a person doesn't pay their Council Tax, then they will first get a reminder from the council about two weeks after the payment is missed, The Money Advice Service explains.
If the money is then paid within seven days, one doesn't need to do anything else.
The Money Advice Service states: "The debt will be clear and you’ll be able to continue paying your Council Tax in instalments."
However, if the payment isn't made within seven days of the reminder or if it's the third time they've been late with Council Tax payments that year, then the council will send a "final notice".
This final notice tells a person to pay all of their Council Tax for the rest of the year, within seven days.
So, what happens if a person doesn't pay the entire sum within a week after receiving the final notice?
"If you don’t pay within seven days of the final notice your council will usually apply to the courts for permission to collect the debt from you - this is known as a ‘liability order’," The Money Advice Service explains.
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After this, the council can get one's employer to pay the unpaid Council Tax directly from one's wages.
Money can also be taken from certain benefits.
This includes:
- Employment and Support Allowance
- Income Support
- Jobseeker’s Allowance
- Pension Credit
- Universal Credit.
"If this isn’t possible, the council might send a bailiff to your home.
"You’ll have to pay court costs and possibly bailiff fees as well as your debt, which can add hundreds of pounds to your bill.
"If you’re in England, it’s also still possible to receive a prison sentence for getting behind with Council Tax."
