Many struggling with council tax debts ‘have just a few pounds spare each month’

People with council tax debts have just £7 left over on average at the end of each month after covering their living costs, according to analysis of those turning to Citizens Advice for help.

The charity, which analysed financial statements from people across England and Wales who have sought its help with council tax, said more than four in 10 (42%) have no money left at all.

Nine in 10 people with council tax debt who seek help from Citizens Advice also owe money on other household bills, most commonly water and energy costs.

The charity argued that current regulations are forcing these people into sometimes desperate hardship – pushing councils to use the courts to recover council tax debts, which can add legal costs and bailiff fees to the debt.

People can become liable for the full annual bill two weeks after a missed payment.

This means that missing an average council tax payment of £167 in the first month of the financial year can escalate to a debt of more than £2,000 in just nine weeks, Citizens Advice said.

This is nearly 300 times the monthly amount available to the average person seeking support from Citizens Advice with council tax arrears.

Last year, the charity helped more than 83,000 people in England with council tax problems.

Dame Gillian Guy, chief executive of Citizens Advice, said: “Many people who need our help with council tax arrears have no more than a few pounds spare every month to repay their debts.

“An unexpected bill for thousands of pounds, accompanied by legal threats and bailiff action, is terrifying for the person concerned and ineffective for the council trying to recover the debt.”

Councillor Richard Watts, chairman of the Local Government Association’s resources board, said: “Councils have a duty to their residents to collect taxes so important services, like caring for older and disabled people, protecting children, fixing roads and collecting bins are not affected.

“They strive to recover unpaid tax as sympathetically as possible and to provide support to households at risk of financial exclusion or hardship.

“As the Citizens Advice’s report makes clear, this needs to be supported by better guidance and funding.

“Councils would be in favour of it being made easier for them to recover money without having to use bailiffs, and would support the removal of the requirement for the entire annual sum to become payable if an instalment is missed.

“Bailiffs should only ever be used as a last resort by councils.

“Before it gets to that stage, people will have been encouraged to apply for financial support by their council.

“Anyone having trouble paying their council bills should get in touch with their local authority for financial help and advice as soon as possible.”

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