Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 1
1
Accepted
Paragraph: 15
Ambiguity exists regarding local authorities' discretion for council tax repayment plans.
Conclusion
The Council Tax (Administration and Enforcement) Regulations 1992 requires the year’s unpaid council tax balance to become payable in certain circumstances. This provision, and the speed with which it is applied, can be the catalyst for someone’s debts to quickly escalate. It is not clear, however, how much discretion local authorities have to agree repayment plans that spread the value of the unpaid balance over the rest of the year. The council tax collection best practice guidance, published by the Department for Levelling Up, Housing and Communities, strongly implies that local authorities do not have to demand immediate payment in full, but evidence from stakeholders suggests that this message is not getting through.
Government Response Summary
The government acknowledges the committee's concern about clarity regarding council discretion for council tax repayment plans and commits to writing to all councils to stress their flexibility and encourage affordable repayment plans.
Paragraph Reference:
15
Government Response
Accepted
HM Government
Accepted
The Government notes the Committee’s view on amending regulations on the collection of council tax and making it clear that councils have the discretion to provide a longer period before requiring repayment of the full unpaid balance. For the great majority of taxpayers, the council tax system operates smoothly and effectively. There may be times when households may face difficulties in paying their bills, including council tax. The Government acknowledges the concerns raised by the Committee that the regulations are drafted in a way that encourages councils to take rapid action. Council tax provides a vital contribution to the cost of delivering quality public services, from caring for vulnerable residents to keeping the streets clean and safe. The efficient collection of council tax enables councils to make these broad range of services available to the local community. The framework provides an effective system to enable councils to collect council tax, whilst providing opportunities for residents to get in touch with their council where they may be facing hardship. There is a clear structure in place in these circumstances and the regulations set out a minimum framework for sending out statutory notices. If a resident misses a monthly payment and does not respond to a bill, the council will send a reminder notice giving residents a minimum of seven days to pay. If the resident does not make payment or contacts the council to notify that they are facing hardship and unable to pay their council tax bill, then the resident may lose the right to pay by instalment and the full year liability may become due. There is no requirement or restrictions that require councils to only provide seven days between a missed payment and the full year liability becoming payable. The powers are permissive and councils are free to make their own judgements as to what action they may consider appropriate. For example, during the pandemic several councils reflected on the impact the pandemic had on some council tax payers’ ability to pay their bills and chose to issue “soft reminders” rather than statutory notices, such as sending reminders that ‘signposted’ support available and contact details for debt advisers. Some councils also chose to increase the time period between a resident missing an instalment for their council tax and issuing a reminder notice, in recognition that households may be struggling to pay. This opened a channel of communication between the resident and the council and enabled residents to get support to stay on top of payments so that they do not risk losing the right to pay by instalments. The Government will write to all councils to stress that councils have the discretion to provide a more flexible timeline than those set out in regulations, before requiring full repayment of the full unpaid balance and to encourage councils to offer an affordable repayment plan.