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Council tax collection inquiry launched by HCLG Committee

23 November 2021

The Housing, Communities and Local Government (HCLG) Committee has today launched an inquiry into council tax collection in England, examining the practices employed by local authorities to collect council tax arrears.

The inquiry will also look at other issues including whether there should be changes to the legislation on the recovery of council tax arrears, and how local authority council tax support schemes affect council tax collection rates.

The full inquiry terms of reference are included further below.

Chair's comments

Clive Betts, Chair of the Housing, Communities and Local Government Committee, said:

"Council tax arrears is the most common debt problem which people approach Citizens Advice about. Covid-19 has also inevitably had a major impact on many household incomes with some residents suffering financial hardship, leaving them to fall behind on their council tax payments.

In our inquiry, we are keen to understand about how councils differ in their approaches to council tax arrears, the support available to those who fall into council tax debt, and whether there needs to be changes to the law on the recovery of council tax arrears. We are also keen to examine how different council tax support schemes affect council tax collection.”

Non-payment of council tax is not a criminal offence. However, statutory regulations – the Council Tax (Administration and Enforcement) Regulations 1992 - allow people to be sent to prison through a civil process (a ‘commitment order’) for up to three months for non-payment of council tax. England is the only nation in the UK where local authorities still use this power.

The HCLG Committee’s inquiry comes in the wake of the impact of COVD-19 on council tax arrears. In January 2021, Citizen’s Advice estimated over 3.5 million people were behind on their council tax, and that 51% of those weren’t behind before the pandemic.  Government figures indicate that at end of March 2021, the total amount of Council Tax outstanding amounted to £4.4 billion.

The Government has provided support for those receiving council tax support through the hardship fund worth £500 million, most of which would go to people needing council tax relief. In May 2021 a 60-day breathing space for individual debts, including for council tax, was introduced.

Since April 2013 local authorities in England have had the power to devise their own Council Tax Support schemes for working-age adults. This replaced the previous national scheme of council tax benefit. In the first quarter of the financial year 2021/22 just over 4 million people claimed council tax support.

In August 2021 the Government published best practice guidance for local authorities on council tax collection.

The Committee’s call for evidence is issued ahead of a short series of public evidence hearings which are likely to begin in early 2022.

Council tax collection – inquiry terms of reference

The Committee welcomes evidence submissions on the terms of reference outlined below. The closing date for submissions is 14 January 2022.

In particular, the inquiry seeks answers to the following questions:

  • Do there need to be changes in the practice employed by local authorities to collect council tax arrears?
  • What examples are there of local authority best practice in respect of council tax arrears collection – and what has the impact of this practice been?
  • What is your assessment of the August 2021 government guidance on best practice for council tax collection?
  • Do there need to be changes to the legislation on the recovery of council tax arrears?
  • How do the different schemes of local authority council tax support affect council tax collection rates?

Further information

Image: PA