Soaring Council Tax bills are pushing many more people into debt, while the penalties for missing a payment can be ridiculously severe. Something needs to change, writes John Fitzsimons.
There is no shortage of demands on our money at the moment.
Food prices are rocketing, mortgage bills are going through the roof, and even if you manage to land a pay rise, chances are that in real terms you are still losing out.
However, there are certain bills that are considered a priority, because of how serious things become if you can’t pay them.
And one of the big priority debts, Council Tax, is becoming an ever bigger worry for thousands of people across the country.
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I can’t pay my Council Tax
If you are having issues paying your Council Tax, then you certainly aren’t alone.
According to new data from debt charity the Money Advice Trust, the level of Council Tax arrears has increased by £510 million over the last year, a jump of 10% on the previous year.
This isn’t a one-off event either, but just the latest in what’s becoming a worrying trend.
The level of Council Tax arrears has grown by a whopping 69% over the last five years.
More than a quarter of callers to Money Advice Trust (28%) had Council Tax arrears last year, making it the most common priority debt type among those looking for help.
The level of Council Tax debt is also growing at a concerning pace, having moved from £1,181 back in 2019 to a whopping £1,790 today.
That’s a jump of more than 50% in just a couple of years.
Annual increases are unsustainable
You don’t need me to tell you that Council Tax has been increased substantially in recent years.
Year after year councils announce hikes of the maximum permitted ‒ this year for example we saw the majority of councils increase bills by the 4.99% maximum they were allowed.
It’s far from a one-off either ‒ over the last five years the typical Bad D Council Tax bill has grown from £1,671 to £1,966, a jump of 18%.
This would be difficult to stomach when times are good, but the reality is the opposite is true.
Our finances have been put through the wringer over the last few years courtesy of the pandemic and now the cost of living crisis.
It’s no wonder that so many people are having trouble paying their bills ‒ these increases are simply unsustainable.
We can’t just have councils increasing bills to the maximum on an annual basis, and simply assume that households will find the cash.
Breaking point has already been reached.
The blame isn’t just on councils, though.
The funding they receive from central Government has been scaled back dramatically, and so councils have had little option but to hike bills just to maintain some level of service.
If we are to get Council Tax back into more manageable shape, then the change needs to come from the top.
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Dealing with Council Tax debt
Council Tax is considered a priority debt because there can be grave consequences from falling behind on paying it.
For example, your council could apply to take money directly from your wages, or even any benefit payments you receive.
It could also take you to court, or send in the bailiffs.
Miss a single payment and your council could even demand that you pay your entire year’s bill in one go.
There are some options open to you if you’re struggling.
Council Tax can be spread over 12 monthly payments rather than 10, which can provide a little breathing space, though obviously that will be limited.
Speaking to the council about your situation is vital, as there may be some wriggle room. They may let you pay a smaller amount each month for a set period, for example.
The council may also be open to setting up a payment plan for clearing the arrears you have built up.
The trouble is that even this system doesn’t seem to be working properly ‒ Money Advice Trust found that more than a quarter of those behind on their Council Tax have been asked to repay arrears at an unaffordable rate.
Things can’t carry on this way
First and foremost, Council Tax cannot carry on in this fashion.
Massive increases year after year are simply unsustainable ‒ the Government desperately needs to review the way that it funds councils.
But we also need fresh thinking when it comes to handling the arrears that build up.
More support for Council Tax support schemes ‒ which allow some to apply for Council Tax reductions ‒ to help prevent the arrears being built up at all, would be a good start, while a more flexible approach to collecting the money owed is also badly needed.