Council Tax Shake-Up: What the New Payment Rules Mean for You

Published on

June 24, 2025

Government Plans Major Changes to Council Tax System

The UK government is proposing significant reforms to make council tax payments more manageable and debt collection less aggressive. Here’s what you need to know about the upcoming changes:

Key Changes to Council Tax Payments

✔ 12-Month Payment Plans by Default

Currently: Most pay over 10 months (with optional 12-month plans)
New system: Default 12-month payments
Benefit: Reduces monthly payments (e.g., £38 less per month for Band D)

✔ Softer Debt Collection Rules

Current system: Missing one payment can trigger demand for full year’s tax
New proposal: Slower escalation to bailiffs & lower court fees
Martin Lewis: “No commercial lender is allowed to behave like this”

✔ Easier Council Tax Band Challenges

Consultation includes reassessing tax bands
Goal: Make it simpler to check if your home is overcharged

Why Are These Changes Happening?

The government says the reforms will:
✅ Prevent debt spirals for struggling households
✅ Reduce aggressive bailiff action
✅ Make bills more predictable with smaller monthly payments

Martin Lewis (MoneySavingExpert) welcomed the move:
“The current system is broken. I’m delighted the government is finally acting.”

What Happens Next?

🔹 Consultation open for public feedback
🔹 No confirmed start date yet
🔹 Annual tax amount stays the same (just spread differently)

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