Martin Lewis: I'm over the moon – hideous Council Tax debt collection practices are changing in Wales
Council Tax debt collection in Wales will become less aggressive next year, under new rules announced by the Welsh Government. It's a big win for MoneySavingExpert.com founder Martin Lewis and his charity the Money and Mental Health Policy Institute (MMHPI), who have been campaigning to change the "vicious" existing practices.
The MMHPI launched its campaign in 2024 calling for action on the "outdated, outmoded and cruel" escalation that can happen when someone falls behind with their Council Tax payments.
Following a consultation earlier this year, on Friday 26 September the Welsh Government announced changes to give those struggling with repayments more breathing space to get back on track.
Martin Lewis: 'This is a huge improvement'
Council Tax debt collection is the most vicious, aggressive, damaging form of debt collection there is out there. We've spent the last year campaigning hard for this hideous system to change, and so I'm over-the-moon the Welsh government has listened, and Wales is going to take the lead on improving things.
Currently with many councils across England and Wales, if you miss a monthly payment, within three weeks they will ask you for a year's payment. Then if you don't pay that (and how are you going to if you can't pay for the month) they take it to court, add extra costs, and call the bailiffs in – just six weeks after missing the original payment. It's absolutely catastrophic, and devastating for people's finances, and no commercial company would be allowed to do the same.
Now people will have two months rather than three weeks to make up a missed payment before facing a full annual bill. That gives people more breathing space to find a bit of time to sort things out. It's not perfect, I'd like it to be three months, similar to commercial lenders, but it is a huge improvement. We also need councils to work with their constituents who are struggling, to sign-post them for help rather than scare them into paying.
What the new rules mean for Council Tax debt collection in Wales
From 1 April 2026:
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Households will have two months (62 days) to make up a missed payment before councils can demand the full year's bill. This is much longer than the current three weeks. The change will "give families crucial extra time to get support", while ensuring councils can still "act against those deliberately avoiding payment", the Welsh Government says.
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Councils will need to follow clearer rules around payment reminders and final notices. The Government says it will work with councils on "clearer communication with taxpayers", improved signposting to services and best practice guidance on supporting vulnerable households.
This isn't the first time the Welsh Government has led the way in making changes to the Council Tax system. In 2019, it enhanced the application process for the 'severe mental impairment' Council Tax discount following our campaign. To check if you're eligible for a discount that could save you £1,000s, see Who can get Council Tax reductions.
The UK Government also launched a Council Tax consultation in May, but the outcome of that is yet to be confirmed. Scotland has different rules for Council Tax debt collection, and Northern Ireland uses an entirely different system (rates).
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