The monthly round-up of news, guidance, legislation, and case law from Shelter's Specialist Debt Advice Service.
News and legal updates
This month's legal round up includes Freedom of Information requests made by SDAS, Shelter’s council tax consultation response, enforcement standards consultation, HMRC direct recovery of debts, and more.
Freedom of Information requests
Shelter’s Specialist Debt Advice Service recently made two Freedom of Information (FOI) requests.
The first FOI request was made to the DWP to clarify whether it continues to take deductions from a joint Universal Credit claim for overpayments or advance payments, where one client enters insolvency and the other does not. The DWP confirmed that recovery does continue against a joint claim even where one party is insolvent, but that recovery is against the solvent party.
The second FOI request was made to the Student Loans Company (SLC). We asked whether the SLC would place recovery of student loan overpayments on hold during a DRO moratorium. The SLC has confirmed that it will continue with recovery action during the DRO moratorium. However, where there is a both a grant and a loan overpayment and the grant has been included in the DRO, then the loan will be placed on hold during the moratorium.
Shelter’s response to council tax consultation
Shelter’s Specialist Debt Advice Service has submitted a response to the Ministry of Housing, Communities and Local Government’s consultation on the administration of council tax.
We agree with the government's assertion that the current enforcement practices are heavy-handed, disproportionate and do not properly consider the impact on vulnerable taxpayers. We also agree with the government that councils are taking aggressive recovery action too quickly and too intensely.
We therefore support the government in their endeavours to improve the current council tax system.
SDAS would like to see councils and local authorities working with taxpayers and the debt advice sector to better understand a taxpayer’s circumstances and, importantly, to minimise aggressive enforcement action.
SDAS response to the MHCLG consultation - download PDF
Enforcement Conduct Board standards consultation
The Enforcement Conduct Board (ECB) has launched a new consultation asking for views on their proposed standards on vulnerability and ability to pay.
The ECB intends to move away from the list of ‘characteristics and conditions’ in the 2014 Taking Control of Goods: National Standards and proposes to use the FCA model of ‘key drivers of vulnerability’.
In effect, the ECB wants to shift focus to how someone’s overall circumstances are affecting them, and assessing what this means for the individuals ability to engage with the enforcement process.
The ECB is also proposing a new definition of vulnerable / vulnerability:
‘A person subject to enforcement is defined as being vulnerable or experiencing vulnerability for the purposes of these Standards at a time when, due to their personal circumstances, they are especially susceptible to experiencing harm if those involved in carrying out the enforcement process do not identify the person’s vulnerability and provide appropriate safeguards or support. Vulnerability may be temporary, permanent or fluctuating in nature’.
The consultation closes on 31 October 2025. The ECB is planning to launch the new standards by January 2026.
ECB standards consultation on vulnerability and ability to pay
HMRC has restarted direct recovery of debts
HMRC has announced that it will restarted its ‘Direct Recovery of Debts’ by requiring banks and building societies to pay directly from the accounts of people that choose not to pay. HMRC states that that the recovery from bank accounts can only be used for debts of over £1,000. It also confirms that there are ‘stringent safeguards’ and that adequate protection for vulnerable customers are in place to ensure that people don’t suffer undue hardship.
Time period before council tax enforcement to extend to 63 days (Wales)
The Welsh Government has announced that households will have 63 days from receiving a reminder to pay council tax before enforcement action can be taken. This is an increase from the current seven days of receiving a reminder before the full annual bill becomes payable.
The new rules will come into force from April 2026.
Welsh Government announcement extending enforcement period
Spotlight
This month's article from Shelter's Specialist Debt Advice Service.
Council tax disability reductions
A local authority must reduce the council tax on a property if a disabled person is eligible and the property has certain features to make it suitable. Our new Shelter Legal page explains who is classed as disabled for the purposes of a reduction, what features the property needs to have, how much the reduction is and how an application is made.
Read about Council tax disability reductions on Shelter Legal.