During an interview on Good Morning Britain with Martin Lewis, the Chancellor of the Duchy of Lancaster, the Rt Hon Pat McFadden, announced that the government would consult on council tax debt collection practices
Martin Lewis has issued a response on the government’s plan to launch a consultation on council tax debt collection regulations
During an interview on Good Morning Britain with Martin Lewis, the Chancellor of the Duchy of Lancaster, the Rt Hon Pat McFadden, announced that the government would consult on council tax debt collection practices. Currently, if you miss one month’s council tax payment, your local authority could send you a final notice requiring you to pay your full yearly council tax bill within three weeks.
In contrast, credit card firms are required by regulation to take more steps to engage people about a missed payment before demanding full repayment, and this process typically takes three to six months.
If you do not pay for the year at this point, within two weeks, the council can take you to court for the unpaid bill. They could then slap a liability order onto you – which Martin has said can add £150 to the bill – and then one week later, the council can send bailiffs round.
Last year, the Money Saving Expert (MSE) website founder called on the government to make changes, calling the current system “aggressive”. Martin’s charity, Money and Mental Health Policy Institute, also released research on the impact of the practices, which were revealed to be “widespread.”
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The charity’s analysis showed that 87% of the 71 councils that shared their debt collection information use the “full strength of the law” and demand that people pay the full year’s council tax within three weeks of missing a first payment.
In a video posted to X today, Martin revealed that he had told the Chancellor’s team that he would discuss this subject on Good Morning Britain today prior to the interview.
However, this morning, he received a response that confirmed that a consultation would be launched on debt collection practices.
In his video, Martin said: “I’m suddenly sitting there afterwards, going ‘Yes’. I cannot tell you how many desperate people I have met whose lives have been absolutely ruined by this form of debt collection.”
Martin’s video opened with him saying: “I’m a bit teary if I’m honest. In a good way, though, because I just had a win that I wasn’t expecting. It’s almost sort of anticlimactic, but it’s amazing.”
Martin reiterated in his video that debt collection practices were “absolutely catastrophic and devastating for people’s finances.” He also noted that councils should be held to the same standards as commercial companies, adding: “Council tax has constituents who don’t have the same rights.”
He added: “I mean it’s only a consultation, but I’m hoping this is the start of changing things. It’s one of those things people don’t talk about, but it affects millions of people.
“Suddenly it’s a campaign win out of nowhere, I’m very happy, slightly confused, trying to work out what work I need to do, and a little emotional about it. So I thought I’d just record this feeling and try to explain it to you.”
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