The Government will introduce a new council tax rule from April 2027, giving households struggling to pay their bills more time and flexibility. Under the current system, missing one monthly payment makes a person liable for the entire outstanding sum in a single payment two weeks later. From the start of the new tax year, households will have 63 days — roughly two months — to settle their bill, and councils will be required to work with them on a sustainable repayment plan.
Changes to billing and costs
Another change from April will shift council tax billing to 12-month payments by default, rather than the current 10 months. The costs councils can charge when seeking a liability order — the process used to recover overdue bills — will also be capped at £100.
Reaction from Martin Lewis
Earlier this week, housing secretary Angela Rayner shared a video on social media discussing the change, which was originally raised by financial expert Martin Lewis. In an accompanying post on X, Ms Rayner wrote: "I promised we'd make council tax fairer, and I’m getting on with the job. Too many working people have seen council tax debt spiral before they had the chance to get help. That's why we're introducing more time to pay, clearer warnings if you miss a payment and more support from councils. Thanks to @MartinSLewis and @mmhpi for their tireless campaigning to make this change happen."
Martin Lewis, founder of Money Saving Expert, shared the video and wrote: "When I met Angela Rayner to campaign for change to overly aggressive council tax debt collection, with its unprecedented rapid escalation to bailiffs, she nodded like most politicians do. I explained it was destructive for individuals, councils and the economy. She listened more then said she'd change it. I was sceptical. Yet a consultation was launched within weeks and delightfully the change announced within 18mths (its in place from next April) - bullet train pace for politics."
He continued: "I've a rule that if I campaign for a politician (of any party) to do something, and they do it, I say thank you. Its important to recognise it. So thank you so much Angela Rayner for listening and more importantly acting. The changes coming are a great start."
Background to the campaign
When the change was announced back in April, Martin Lewis 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."
He added: "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."
Mr Lewis said: "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."
