Council Tax Reform Shields Vulnerable Households

Ministers announced a package of changes to council tax administration on April 15. The measures aim to reduce hardship and modernise a system unchanged since 1993.

What the reforms will do

Households will get more time to settle overdue bills. Councils must offer and agree sustainable repayment plans.

• Liability period extended to 63 days before formal enforcement.
• Default billing moved to 12 months instead of 10.
• Costs charged by councils when seeking liability orders capped at £100.
• Households may still choose a 10-month payment schedule if they prefer.

Why ministers say change is needed

Officials said the current process can trigger rapid enforcement. Missing one monthly payment can lead to demands for the whole year in weeks.

Ministers argued the system causes unnecessary stress and can worsen people’s financial situations. They plan to prioritise support for those in hardship.

Support for people with mental health and disability needs

The government will update the name and definition of the Severely Mentally Impaired discount. This aims to remove stigma and make eligibility clearer.

Work with disability charities and local authorities will develop a standardised application form. The goal is to reduce barriers to access.

Campaigning and reactions

Consumer campaigner Martin Lewis and the Money and Mental Health Policy Institute lobbied for reform. They highlighted the damaging effects of aggressive debt recovery.

Ministers acknowledged that charities and advocates helped bring the issue to attention. They said councils will retain powers to act against deliberate avoidance.

Implementation and wider local government measures

Most reforms are planned for delivery in 2027/28. The government launched a consultation on modernising council tax in June 2025.

Guidance will be published for councils. Officials will also carry out a new burdens assessment to fund local authorities appropriately.

• First multi-year financial settlement in a decade has been introduced.
• Core Spending Power will rise by 24.3% under recent funding plans.
• Nine in ten councils will receive funding that broadly matches need, up from three in ten.

Next steps for councils and households

The government will work with councils to design reminder notice steps during the 63-day period. Non-statutory guidance will outline further options.

Further consultation will consider apprentice and carers’ council tax disregards. High Value Council Tax Surcharge and band challenge reforms will be published later.

Filmogaz.com will continue to follow implementation and report updates as guidance and regulations are published. Council Tax Reform Shields Vulnerable Households remains a central aim of the package.