As councils nationwide face financial constraints, council tax debt has surged by 9% in the past year. This represents a 71% increase since pre-pandemic levels, when the debt stood at £3.5 billion, as more residents struggle with council tax bills.
Debt charity StepChange, reports a 50% rise in the average debt among its clients, from £1,146 in 2019 to £1,726 in 2023. With most councils increasing taxes by the maximum 5%, some surpassing this due to bankruptcy, this trend will likely persist.
For the 2024-25 tax year, council tax increased by an average of 5%, with notable hikes in Woking (10%), Birmingham (9.94%), Slough (8.51%), Bolsover (8.32%), and Thurrock (7.98%). To collect overdue payments, councils often take stringent measures, including demanding the full amount in one payment and involving bailiffs. In extreme cases, this can lead to a three-month prison sentence.
StepChange's research shows that 69% of people support banning the use of bailiffs for collecting council tax debt, especially for those in financial difficulty. Additionally, 84% advocate for a regulator to ensure bailiffs treat people fairly.
Moreover, 69% of respondents believe council tax rates should be reduced for those with the lowest incomes. Current regulations allow councils to demand full annual payments if a household misses one month's payment, a practice opposed by 82% of people.
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