UK households issued urgent alert over council tax payments

Millions of households could see their council tax bill spread over 12 months by default under significant changes. Currently, council tax is typically divided into ten monthly payments from April to January each year. Under a new consultation launched today, the Government aims to make 12-month payment plans the standard, offering smaller monthly payments. According to the Ministry of Housing, Communities and Local Government, an average band D household would pay roughly £38 less per month if they opted for a 12-month plan.

Households will retain the option to pay their council tax bill over ten months if they prefer. The consultation also proposes slowing down the debt collection process when a council tax payment is missed. Currently, missing just one council tax payment can result in a demand for the remainder of your yearly bill to be paid upfront. If non-payment continues, councils can involve bailiffs, leading to additional legal costs being added to your bill.

The consultation aims to cap these extra costs and ensure households are informed about potential assistance they may be eligible for if they struggle to pay.

It will also become simpler to challenge your council tax band if you believe you're overpaying. It's estimated that approximately 400,000 people are currently in a higher band than necessary.

The Government is set to revamp the council tax system with a range of changes, including a rebranding of the "severe mental impairment" discount to "significant cognitive impairment" discount.

A 12-week consultation will be held, starting from June 20 and ending on September 12, with any changes confirmed in the autumn.

Martin Lewis, founder of MoneySavingExpert, said: "Many parts of the council tax system are broken.

"Having called for some of these fixes for nearly 20 years, I'm delighted the government has listened and rapidly launched this long-due consultation, including many of the administration areas I hear the most complaints on.

"Council tax rapid and aggressive debt collection methods currently hurt millions and disproportionately affect those with mental health problems.

"Within three weeks of missing a monthly payment many councils say you must pay for the whole year...ridiculous, how can people who can't afford to pay for a month, suddenly pay for a year?

"After a further three weeks councils can call bailiffs in and rack up charges on charges. No commercial lender is allowed to behave like this, meaning constituents are treated worse than consumers."