Two million people 'behind on council tax bills'

More than two million people are thought to be behind their municipal tax bill due to the impact of the coronavirus.

That is according to major charities who fear that the collection methods of local authorities could put households in a difficult spiral.

Citizens Advice, the Money Advice Trust, and StepChange Debt Charity said action should be taken to avoid pushing households over the edge of a municipal tax office.

They fear that there may be a surge of aggressive debt collection by local authorities.

The three charities welcomed the government’s temporary ban on bailiff visits to enforce debts during Covid-19 restrictions, saying its measures to protect people’s finances during the crisis were a lifeline.

But they are concerned that there may be a sudden escalation in the implementation of municipal taxation in the future.

The charities are calling for amendments to the regulations on how municipal taxes are collected.

A survey of over 2,000 people conducted in April for Citizens Advice suggests that 4.4% of the population – possibly equal to about 2.3 million adults in the UK – missed a municipal tax due to Covid-19.

The three charities recognize that municipalities must collect the arrears of those who can afford to pay to fund essential local services.

But they warned that with the financial consequences of Covid-19 likely to last for months and even years, regulations used by municipalities to collect debts could lead to “heavy-handed tactics” that could push struggling households further into debt.

They said that in 2018/19, 1.4 million municipal tax debts were transferred to bailiffs, adding costs and fees to existing debts.

If someone misses a single city tax payment, they can be held liable for their full annual bill, adding to the pressure on households with difficulties.

The charities want municipalities to draw up an affordable payment plan before they start collecting municipal taxes.

They said that municipalities should be encouraged to collect debts over a period of more than a year and that people should not be automatically held accountable for their full annual bill if they fall behind deadlines.

More funding for hardships should also be provided to municipalities to reduce the arrears of taxes due to Covid-19, they said.

Dame Gillian Guy, general director of Citizens Advice, said: “Coronavirus has caused great financial uncertainty for municipalities. But this pressure should not cause a wave of aggressive debt collection against people struggling to pay their bills. Aggressive debt collection makes vulnerable people more debt and is inefficient. “

Joanna Elson, chief executive of the Money Advice Trust, the charity that runs National Debtline, said, “There is no going back to business as usual for collecting municipal taxes.

“The government must act swiftly to address the shortcomings in the way local authorities collect arrears from debtors – to ensure that this is fair and proportionate and that bad financial situations do not get worse.

“At the same time, municipalities need more funding both for existing municipal tax support schemes and for supporting residents in other ways.

“This needs to be put in place right away so that local authorities can play their part in supporting the nation’s financial recovery after the outbreak.”

Phil Andrew, general manager of StepChange Debt Charity, said: “Municipal tax is often one of the bills that households in financial difficulties find difficult to pay, but its enforcement is stricter and punishable than most other forms of debt.

“Especially at the beginning of the tax year, when people miss a payment and have to repay the full amount, that’s a concern.

“The government should take measures to support municipalities that will understandably worry about their funding, but also to demand that they take a fair and compassionate approach to residents who are in arrears with the current situation.”

.

About the Author: TEAM BEPINKU.COM

We share trending news and latest information on Business, Technology, Entertainment, Politics, Sports, Automobiles, Education, Jobs, Health, Lifestyle, Travel and more. That's our work. We are a team led by Mahammad Sakil Ansari.
Menu