Council tax overhaul announced after households risk money being taken from wages or benefits

Temie Laleye
Fri, 17 Apr 2026 09:04:09 +0000

Missing a single council tax payment can quickly spiral, with councils able to take money directly from your wages or benefits within weeks.

Now, new reforms aim to slow the process and give households more time before facing aggressive debt collection measures.

Millions of households in England will be affected by major changes to council tax debt collection.

Under the current system, councils can get a liability order, which allows them to take money directly from a person’s wages or benefits if payments are missed.

The changes, confirmed on 15 April, are the first major update to the system since 1993. Those who fall behind will now have 63 days to pay what they owe, instead of around three weeks in many areas.

Ministers said the current rules, unchanged for more than 30 years, are outdated and have caused unnecessary stress for vulnerable people. At present, missing just one payment can mean being asked to pay the full yearly bill within a couple of weeks.

From next year, this punishing timeline will be replaced with a more reasonable approach, granting households approximately two months to address their arrears.

Councils will also be obligated to collaborate with residents to establish manageable repayment arrangements rather than immediately pursuing aggressive enforcement measures.

The existing framework, which has governed council tax collection since 1993, permits councils to pursue aggressive recovery action with remarkable speed.

When a resident misses a single instalment, many local authorities demand the full annual sum within approximately three weeks.

Should the household prove unable to produce this lump payment, court proceedings can commence within another three weeks, with administrative charges added to the debt.

Following a liability order, councils gain the power to deduct money directly from earnings or benefit payments, or dispatch bailiffs to the property.

Maxine McCreadie, a spokesperson for UK Debt Expert, noted that many people wrongly assume council tax debt is treated more leniently than other obligations.

The reforms introduce several concrete measures to protect struggling households from spiralling debt. Council tax billing will shift to a 12-month payment schedule as standard, replacing the current 10-month default, allowing families to spread costs over a longer period.

Those who prefer the existing arrangement may continue paying over 10 months if they wish.

Administrative fees that councils can impose when pursuing liability orders will be restricted to a maximum of £100.

Local Government Secretary Steve Reed stated: "Too many families are facing aggressive enforcement action, with people left terrified of bailiffs knocking on the door because one month's council tax bill was missed."

Minister for Local Government Alison McGovern described the current system as "outdated and confusing."

The reforms will take effect from next April.

Ms McCreadie welcomed the changes, emphasising that the reforms would help prevent people from falling into a destructive cycle of debt.

She said: "These reforms, including a longer 63-day period before the full repayment is required and caps on admin costs, is a step towards a fairer system that gives people more time to agree sustainable repayment plans that will hopefully avoid a debt spiral."

The organisation received more than 1,100 enquiries in March from people concerned about council tax, a figure significantly higher than the same period last year.

Ms McCreadie attributed this surge to both rising bills and recent council tax increases, demonstrating the urgent need for reform.