Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 7
7
Accepted
Local authorities must consider ability to pay when collecting council tax arrears from the vulnerable.
Conclusion
The localisation of council tax support, and local government’s increasing reliance on revenue from council tax, has put local authorities in the difficult situation of occasionally having to collect council tax arrears from those in financial need. In this context, it is all the more important that their approaches to enforcement take account of individuals’ ability to pay. (Paragraph 39) 36 Council Tax Collection
Government Response Summary
The government acknowledges the committee's views and responds by outlining the existing statutory framework for council tax collection, which includes multiple communications and allows councils the discretion to offer flexible repayment arrangements and assess discounts, suggesting current practices already take account of an individual's ability to pay.
Government Response
Accepted
HM Government
Accepted
The Government notes the Committee’s views on introducing a statutory code of practice. There is a clear structure in place for councils when administering the collection of council tax. The current process in place means that the resident will receive at least three statutory communications before enforcement action can be taken. Under this framework a resident will receive a reminder and/or final notice for payment, court summons, and notification that the liability order has been granted; providing the resident with opportunities to get in touch with the council before and after a missed payment to discuss their circumstances. Furthermore, the statutory framework enables councils to consider whether to agree alternative repayment arrangements and assess whether the resident is entitled to, or in receipt of, council tax discounts or reductions when determining next steps for the collection of outstanding council tax bills. Councils are free to take additional steps before moving to enforcement action. For example, several councils have already chosen to sign up to the “collection of council tax arrears good practice protocol”, published by Citizen Advice in collaboration with the Local Government Association. The protocol includes steps councils can take to offer flexible payment arrangements and highlights that recovery actions should be referred to councils where vulnerability has been identified. There is flexibility in the system for payment. Payment of council tax is usually apportioned into ten monthly instalments across the financial year. Residents have a legal right to request payments are made over 12 months instead of ten. There is no legal requirement that the tax must be collected in-year, however timely payments and collections are clearly preferable to avoid households dealing with multiple years of council tax charges. However, there may be situations where a council decides that it is more appropriate to agree a longer term of repayment, which can be more than one financial year. The Government supports councils in offering this flexibility where they consider circumstances to be appropriate. The collection of council tax is the responsibility of local authorities, and it is open to them to adopt alternative approaches. The Government published guidance in 2013 and 2021 to assist councils in the collection of council tax and has no plans to replace guidance with a statutory code of practice. The Department of Levelling Up, Housing & Communities keeps the guidance on council tax collection under review in light of developments in debt collection practice.