Council tax- Martin Lewis campaign results welcomed in York

A newly-announced shake-up is set to see households given about two months to settle bills rather than having to pay an entire year’s demand in two weeks.

Local Government Secretary Steve Reed said the current system had left families terrified of bailiffs knocking on their door because of month’s council tax bill was missed.

Cllr Katie Lomas, City of York Council’s Labour financial spokesperson, said the changes would support the authority’s ongoing work to help people pay their bills.

Martin Lewis, of the Money Saving Expert personal finance website, said the current system was the most vicious and damaging form of legal debt collection.

It comes after shake-up was unveiled by the Government on Wednesday, April 15.

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The announcement follows a campaign from Money Saving Expert’s Money and Mental Health Policy Institute to reform the system which has remained unchanged since council tax was introduced in 1993.

Changes are set to see people given 63 days to settle outstanding bills and councils will be required to work with them on agreeing repayment plans.

Billing for council tax will be shifted to 12-month payments by default, rather than the current 10 months schedule which is the norm for many local authorities.

Charges for costs councils incur by recovering outstanding payments through liability orders will be capped at £100.

Payment schedule changes are set to come into effect from next April with the rest of the changes due to be introduced a year later in 2028.

The name and definition of the Severely Mentally Impaired council tax discount is also set to be changed when parliamentary time allows.

Those changes aim to remove stigma which puts people off applying for support.

The Government said it would put an end to the current system which left families who fell behind on payments facing financial ruin.

Money Saving Expert’s Mr Lewis said the current system had caused counter-productive misery for millions.

Martin Lewis has campaigned for the changes (Image: Agency)

The financial advisor said: “Council Tax debt collection is so aggressive it’d make banks blush.

“How people who can’t find a month’s money are expected to find a year’s I don’t know.

“Yet if they can’t pay, within just three more weeks, they are often taken to court, have ‘admin costs’ added, and soon see bailiffs sent in.

“For councils too, it is worth remembering that this grotesque system is often catastrophic for people’s finances and wellbeing, leaving many needing more help and support, and ultimately the same council having to pick up the pieces.”

Local Government Secretary Mr Reed said the changes would make the system fairer and support families who have been left behind.

The Labour secretary of state said: “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.”

York Council’s Labour Finance Executive Member Cllr Lomas said the work local officials already did helped people to get benefits and support they were entitled to.

Cllr Lomas said: “We’ve been providing the payment option of 12-monthly instalments for several years, encouraging the use of direct debit and keeping liability order costs 80 per cent below the Government’s £100 cap, for residents receiving council tax support.

“We provide council tax information with all bills as well as on our website and all residents can now register for e‑billing and we would encourage them to do so.

“We will also continue to send physical copies to all residents who want them or have no digital access.”