This year council tax arrears is the biggest debt problem by a margin. And growing: see Table below from ‘Advice Trends’.
Our advisers help clients clear their debts, often through a realistic repayment plan. The plan can be acceptable to the council but crucially also allow the client to pay their current year tax and keep up with other outgoings.
Unfortunately a new government enforcement policy is about to make this sensible way forward almost impossible.
The Department for Communities and Local Government wants to give councils information allowing them to contact a taxpayer’s employer and enforce a fixed amount payment from their earnings immediately liability has been established. We think councils will have no option but to do this even if the fixed amount is unrealistic and will cause more problems in future.
The Department’s consultation on the proposal – ‘Guidance to local councils on good practice in the collection of Council Tax arrears’ – closed this week. We hope ministers will think about the downside of a policy improvement that could make things worse.