Martin Lewis's reaction to improved Council Tax billing measures

Today, the Government published the outcome of its consultation into the English Council Tax system and confirmed reforms to overdue billing processes and the 'Severe Mental Impairment' (SMI) discount. Under previous rules, households that missed one monthly payment were required to pay the entire year’s bill in a single payment just three weeks later. From next year, councils must wait 63 days before they can demand a full year's missed payment and 'liability order' fees will be capped at £100.

The Government has also confirmed it will be easier for vulnerable households to apply for a SMI discount via a universal application form. SMI will also be renamed to 'Significant Cognitive Impairment'. Martin Lewis has long campaigned for reform to the system, previously calling Council Tax debt collection practices “hideous” and warning that the process to claim a SMI discount was under-publicised, under-claimed and overly complex for many.

Reacting to the changes to Council Tax debt collection, Martin Lewis, founder of MoneySavingExpert.com and Money and Mental Health Policy Institute, said: "Council Tax debt collection is so aggressive it’d make banks blush. It’s the most vicious and damaging form of legal debt collection out there - causing counterproductive misery for millions. We’ve spent the last 18 months campaigning hard to change this hideous system, and having seen so much pain caused by it, I’m genuinely moved by this huge first step towards making things better.

"Currently, in England, if you miss a monthly payment, many councils, usually within three weeks, demand payment for the entire year. How people who can’t find a month’s money are expected to find a year’s I don’t know. Yet if they can’t pay, within just three more weeks, they are often taken to court, have ‘admin costs’ added, and soon see bailiffs sent in. No commercial firm would be allowed to do anything close - constituents are treated worse than customers.

"The new rule from next April means councils must wait two months, not three weeks, to ask for a year’s money, and the ‘admin costs’ will be capped at £100. In a perfect world, it would be even longer and the lower cap would apply, but this is still a hugely welcome change to a 33-year-old process. For councils too, it is worth remembering that this grotesque system is often catastrophic for people’s finances and wellbeing, leaving many needing more help and support, and ultimately the same council having to pick up the pieces."

Additional commentary from Martin Lewis reacting to the changes to claiming SMI discounts:

Martin Lewis, founder of MoneySavingExpert.com and Money and Mental Health Policy Institute, said: “Hundreds of thousands of some of the most vulnerable people in society, including many with dementia, Alzheimer's, severe Parkinson's or the effects of strokes, have long overpaid Council Tax.

“This is because the horribly named 'Severe Mental Impairment' discount is cumbersome, misunderstood (even by some council staff) and under publicised. We've long pushed for change and I am delighted that our suggestions are being picked up.

“There will be one consistent form across all English councils, making it easier for help agencies to offer guidance. The name too will be changed to 'Significant Cognitive Impairment' – though crucially, eligibility will remain unchanged.

“The new rules from next April will mean councils must wait two months, not three weeks, to ask for a year's money, and the 'admin costs' will be capped at £100. In a perfect world, it would be even longer and changed to a lower cap would apply, but this is still a hugely welcome change to a 33-year-old process.

“Amongst all the good news on Council Tax from an MSE perspective, it's a shame we've not heard anything about changing the 'six-month' rule on applying to have your band reviewed. This isn't off the table, it’s just delayed for now. We'll keep pushing.”

For full details on the changes, see MSE’s news story.

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