Ellie Ames 10 September 2024

Martin Lewis: Councils collect unpaid tax like ‘worst loan sharks’

Martin Lewis: Councils collect unpaid tax like ‘worst loan sharks’ image
Image: New Africa / Shutterstock.com

Consumer finance expert Martin Lewis has criticised the ‘grotesque’ methods authorities use to recover council tax and urged the Government to change the law on debt collection.

The Money and Mental Health Policy Institute, a charity founded by Mr Lewis, has launched a campaign urging ministers to end the ‘council tax trap’ that means people can face a ‘whirlwind’ of debt collection activity, fees and charges after missing just one payment.

It said two million people with mental health problems in the UK had fallen into the ‘trap’.

In England and Wales, 71 of the 100 biggest councils share information on how they collect debt – and 87% use the full strength of the law to demand that people pay the full year’s council tax within three weeks of missing a first payment.

Mr Lewis said the practice was like ‘a caricature of the worst loan sharks’.

He said the collection system, which then allows councils to apply to a court to send in bailiffs if the full payment is not made, ‘could not have been designed better to accelerate distress’ for people in debt.

The Money and Mental Health Policy Institute called on the Government to bring council tax debt collection at least in line with consumer creditors, who often wait three to six months before demanding full repayment of an overdue debt.

But Mr Lewis pointed out that councils were already free to take a fairer approach, and urged them to protect people in vulnerable circumstances from harm before escalating debt collection.

A spokesperson for the Local Government Association said: ‘Councils strive to ensure they have fair council tax collection policies and should always try to work with people who are struggling to meet their council tax bills.’

SIGN UP
For your free daily news bulletin
Highways jobs

Director of Public Health

Royal Borough of Greenwich
Up to £131,210
The Public Health department is at the heart of the council’s business. Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Head of Regeneration and Growth

Plymouth City Council
£68,387 - £74,411 (MFS and relocation available, pay award pending)
This is a unique opportunity to lead our award-winning development team and directly deliver hundreds of millions of pounds of projects. Plymouth, Devon
Recuriter: Plymouth City Council

Director of Adult Social Care

Wiltshire Council
£119,390 - £127,137
Join us as the Director of Adult Social Care and make a real difference to people’s lives. Wiltshire
Recuriter: Wiltshire Council

Assistant Director Planning, Performance & Engagement

East Sussex County Council
up to £97,700
With strong local communities, unspoilt countryside and vibrant coastal towns, East Sussex offers an exceptional quality of life to many. East Sussex
Recuriter: East Sussex County Council

Director of Finance & Commerce

Lancashire County Council
Up to £114,339
You will play a critical role in driving the organisation through complex change and innovation. Lancashire
Recuriter: Lancashire County Council
Linkedin Banner