The potential impact of the Wales consultation on council tax enforcement

Our thanks to Matthew Evans, Head of Service – Revenues & Benefits, at Wrexham County Borough Council for this guest article.

The Welsh Government has issued a consultation on “Improving the administration and enforcement of Council Tax in Wales”. In this article I am going to give an overview of the proposed change, how it will impact, along with any potential consequences.

Current process

Currently, the regulations state that if a council tax payment is missed, the local authority will send a reminder notice, which gives seven days to pay. If the customer pays within that time, they will be able to continue to pay by instalments.

If they do not pay within seven days, they must pay the entire remaining balance for the year within another seven days. If after this period the amount remains outstanding, the local authority can issue a court summons and, if not paid by the court date, request a liability order.

Local authorities only need to send reminder notices for the first two missed payments in a financial year – if the customer misses a third instalment, a final notice can be issued for the remaining balance.

Whilst the regulations specify the seven day periods as stated above, most councils allow a lot longer, the average being around 20 days, this gives customers time to engage with councils should they encounter difficulties.

The perception from many advice agencies and external organisations is that all councils are working to the exact wording in the regulations; in reality the perception of enforcement to these timescales has been one of the triggers for this consultation.

What are the options

In my opinion, there are four options to address this:

1. Do nothing – this is not realistic given the drive for change amongst certain sectors
2. Change the regulations so that an authority could not summons for a council tax debt in the year in which it is due – in terms of impact on cashflow, I don’t believe this would be feasible and if anything would likely lead to many situations where debt is being compounded
3. Only issue summons for what is owing on the reminder, so if that was two overdue instalments – this could risk a householder being taken to court multiple times in a year incurring additional costs, so I don’t think this would be seen as ethical either
4. Extend the time period between each stage, to give householders more time to engage with their local authority and seek advice – so whilst not perfect, it is probably the most balanced option

Option 4 is what the consultation is considering, so let’s take a look at how that might work.

Proposed changes

Once a payment is missed, the local authority should send a reminder, timing is at their discretion. If payment is still not made, a final notice must be issued. The final notice cannot be sent until 41 days after the due date of the instalment.

Whilst a reminder could be issued say after 15 days, given that a final notice cannot be issued until day 41, councils would look at sequencing and timing. Many will move to pre-reminder engagement, we’ll talk more about that later.

The final notice gives the customer 21 days in which to pay, as well as engage with the local authority and seek advice.

If they do not, on day 22 from the final notice, court summons can then be issued.

The process from default to court summons will therefore become a minimum of 63 days.

The time period for the issue of a summons to attend court and obtain a liability order, if payment is still not made, will depend on the local courts and their case load.

A further proposed change is to remove the current three missed instalments and final notice. If a taxpayer paid over 10 instalments it is possible they could receive 10 reminders and 10 final notices.

The focus of this change is to encourage engagement by the customer with the council, which is absolutely the right approach, provided that it works. If a customer engages at an early stage, we can provide advice and check eligibility for support. The most common problems councils face is a lack of engagement, even with regular nudges and communication.

Potential consequences

Waiting for a second default

Given the extended timescales, I think it possible that some local authorities may decide to wait until the second payment is missed, then start the process with a reminder at that point to capture both instalments within the reminder process.

So if the council’s instalments were due on the 1st of each month, and normally issued reminders say around 28th of the month, they could have previously reminded for the two instalments as the next instalment would be due within seven days of the reminder. They would have to change this slightly and wait until the next instalment was missed and then remind for both instalments.

Financial impacts

The longer timescale will impact on local authority cashflow and, while it is good support for the “can’t pays”, if they engage, it also gives more time to the “won’t pays”.

There will also be additional costs to local authorities as the final notice is compulsory and there is quite a significant cost to sending letters. In the worse case this could move from three documents, two reminders and one final notice, to 12 reminders and 12 finals, if the taxpayer paid over 12 instalments.

Cycle of debt

Whilst the proposals are intended to give customers greater chance to engage should they be in difficulty, I think there is a risk of trapping some customers into a cycle of debt, if they are moving into the new financial year still carrying debt from the previous year because of the longer time frame before councils can issue a reminder and final notice.

Shortening the enforcement stage

The longer timescales at the start of the process might mean that the period at the end for enforcement remains the same, as ideally it is preferable for the council tax to be paid in the year in which it is due.

Pre-reminders

I also think that there will be a move to pre-reminders – texts, emails etc to encourage payment or engagement for people in difficulty. Whilst this will incur additional work for the authority, it may well prevent some defaults, as it is entirely possible that councils may look at this at say day 18 of a missed instalment, allowing time before moving to the statutory reminder process.

Use of data

I think local authorities will start to use data differently, for example looking to identify vulnerable debtors and work on maximising engagement with them, with more tailored communications based on greater knowledge of their individual circumstances. Working smarter, in other words!

What needs to be considered

The consultation does not set a timescale within the reminder for payment to be made, which all of us in the industry think that it should – a clear, timebound call to action will have more likelihood of action than one that is vague on when you need to do something.

Once the consultation has closed and the responses have been reviewed, I would expect that the Welsh Government will consult with local authorities through their associated networks to ensure the final outcome will work, as well as collaborate on standard wording on documents to make sure they are clear and concise and will achieve the intended objectives.

Taking part

I would urge all councils and all interested parties to respond with their views on the consultation, whether you think the proposed changes are good or bad or have other ideas to how things can be improved, respond providing details so that this can be considered.

The consultation is open until 23rd July 2025 and the documentation and process for contributing is on the Welsh Government website within the consultation section.