The UK’s council tax system is being changed (Image: Getty)
A major change to council tax to be rolled out next year has been described as good news for Brits. The current system can leave people facing ruin, officials said, when confirming that reforms will provide more time for vulnerable people to pay their bill after missing one month’s payment. Payments will be automatically spread over 12 months instead of 10 by default to “ease financial pressures”, officials added, with “barriers to accessing certain discounts” also removed.
Kevin Brandstatter, GMB National Officer, said: “Multi-year funding settlements have got to be good news, providing councils with much-needed financial stability. Meanwhile, spreading council tax payments and easing the repayment system will help hard up families hit by the cost of living crisis.”
The Government should now go further, Mr Brandstatter suggested, by looking at reforming the council tax system itself, which is “outdated, out of touch and unfair”.
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Local Government Secretary, Steve Reed, has hailed the reform (Image: Getty)
Ministers confirmed today that changes will be made to the administration of bills, which have been left unchanged since 1993, leaving people facing “unnecessary stress and anxiety”.
Under the current system, officials said, missing one monthly payment can “leave people facing financial ruin” as they become liable to pay the entire outstanding sum in a single payment just two weeks later.
This will change from next year, with households given 63 days to settle their bill. Councils will also be required to work with them on a “sustainable repayment plan”.
The Local Government Secretary, Steve Reed, said: “Too many families are facing aggressive enforcement action, with people left terrified of bailiffs knocking on the door because one month’s council tax bill was missed.
“We will stop this and make the system fairer by supporting families who fall behind.”
Trust for London, an independent charitable foundation which aims to tackle poverty and inequality in the capital, says the current council tax system is a “poor tax”.
The system is, it adds, “increasingly regressive with regard to property value”, and “takes too little account of ability to pay”.
The organisation suggests that council tax “should be abolished and replaced with a property tax which is proportional to the present-day value of homes”.
This would be levied on owners, not occupiers.
The trust adds: “IPPR analysis suggests that a rate of 0.25 per cent would be fiscally neutral for London. In terms of distributional impacts, a fiscally neutral flat-tax rate would see around 79 per cent of households benefit from the reform, the majority of which would be in the current bands A to C.
“Properties in the top bands (around 21 per cent) would pay more under this option.”