Why council tax arrears keep rising, and what it means if you are behind
Council tax arrears have grown every year for a decade. The reasons are structural, which matters, because it tells you something useful about how your council will respond.
If you are behind with your council tax, it can feel like a personal failure. It is worth knowing how many people are in exactly the same position, and why.
What changed in 2013
Until 2013, Council Tax Benefit was a national scheme. If you qualified, you qualified on the same terms wherever you lived, and the poorest households paid nothing at all.
That scheme was abolished and replaced with Council Tax Reduction, designed locally by each council in England, with a reduced budget. Councils had to choose between absorbing the shortfall and asking people who had previously paid nothing to start paying something.
Most chose the latter. The result was several hundred thousand households receiving a council tax bill for the first time, households selected, by definition, for having the least ability to pay it.
Wales and Scotland kept national schemes and did not see the same effect.
The consequence
Two things followed, and both were predictable.
Arrears rose. Bills issued to people who cannot pay them do not get paid. Councils in England now carry billions of pounds in accumulated council tax arrears.
Enforcement rose with them. Councils are judged on collection rates, so the volume of liability orders, attachments of earnings and referrals to enforcement agents increased in step.
What this means for you
Three practical things.
You are not an unusual case
Councils process arrears at scale. Yours is one of many thousands of accounts, handled by a recovery team following a standard process. That is impersonal, but it is also freeing, nobody is singling you out, and the process is predictable rather than arbitrary.
The process is automated until you interrupt it
Reminder, final notice, summons, liability order, enforcement. Each stage follows the last on a fixed timetable and nothing stops it except contact from you. Waiting does not help, and the costs added at each stage are real.
Councils would generally rather have an arrangement
A council that refers your account to enforcement agents recovers the money slowly, if at all, and adds several hundred pounds of fees that make repayment harder. A council with a payment plan that holds gets paid.
That is why a written offer, supported by a statement of income and outgoings, is treated very differently from silence.
What to do if you are behind
- Check the bill is right. Are you the liable person? Is the band correct? Are you receiving every discount, exemption or reduction you are entitled to? Some of these can be backdated for years.
- Apply for Council Tax Reduction if your income has dropped. Schemes differ by council, so a refusal elsewhere or in the past does not settle it.
- Ask to pay over twelve instalments instead of ten. It is a statutory right and it reduces each monthly payment.
- Make a written offer you can genuinely sustain. See special payment arrangements.
If it has already gone further
If a liability order has been made, read liability orders for what your council can now do, and just as importantly what it cannot.
If enforcement agents have been in touch, start with the three golden rules, then check the fees you have been charged. Fees are fixed by law, and they are charged incorrectly more often than you might expect.
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