Aadal Shafiq reports on how recent changes to enforcement legislation and guidance on council tax recovery help low income taxpayers.
Council tax billing and recovery reforms
New reforms to council tax collection and enforcement practices across England and Wales are being welcomed as a significant step toward fairer treatment for households facing financial hardship.
Evidence of financial pressure from council tax debt
Council tax arrears remain one of the most serious forms of debt. Under the current system in England, missing a single instalment could trigger liability to pay the entire annual council tax bill within just two weeks, often pushing struggling households further into crisis.
Research from the Money Advice Trust found that one in four people who contacted National Debtline with council tax arrears owed an average of £2,000. The impact extended far beyond finances.
Three quarters of people issued with full-year demands fell behind on other essential bills
More than half reported going without food
Nearly two in five borrowed money to keep up with payments
Over half said the debt negatively affected their mental health
Two in five feared imprisonment for non-payment
Support organisations have long argued that the legal framework for council tax recovery escalates debt too quickly and disproportionately affects vulnerable households.
Wales took action first
Wales was ahead of England in its efforts to address these concerns through reforms introduced from April 2026.
Under the new rules, households now have 63 days from receiving a reminder notice before local authorities can apply for a liability order or begin enforcement action. The Welsh Government has also introduced clearer guidance and standardised notices designed to encourage earlier engagement and improve access to repayment plans and debt advice.
The changes work alongside the existing Council Tax Protocol for Wales, which all local authorities are required to follow.
England has confirmed major reforms ahead
Following its council tax modernisation consultation, the UK Government has now confirmed a package of reforms for England aimed at making council tax repayment more manageable.
From April 2027, new council tax liabilities in England will automatically be spread across 12 monthly instalments instead of 10, reducing monthly payment amounts and helping households budget more effectively.
Residents will still be able to request 10 monthly instalments if preferred.
England will adopt the same 63 day protection period introduced in Wales before councils can move toward enforcement action.
Cap on liability order costs
Liability order costs will be capped at £100, limiting the additional charges added to debts for what is mostly an administrative process.
From April 2028, the new 12-month instalment system will apply to all council tax accounts.
The government has also committed to consulting local authorities on reminder notice procedures, including how and when councils should engage with residents and signpost debt advice services before enforcement begins.
While most advice agencies have welcomed the reforms, some concerns remain.
Research from the Campaign for Better Policy suggests that capping liability order fees at £100 could encourage some councils to raise their charges up to the maximum permitted amount, potentially generating millions of pounds in additional revenue annually.
The long-term impact will depend on how individual local authorities choose to implement the new rules.
Change to language describing cognitively impaired people
Another reform includes updating legislation to replace the term 'severe mental impairment' with 'severe cognitive impairment' to describe the class of people exempt from council tax.
This change could help reduce stigma and encourage more vulnerable people to seek the financial support and exemptions available to them.
Enforcement agent reforms introduced
Alongside council tax reform, the Ministry of Justice has introduced major updates to the enforcement sector through the Taking Control of Goods (Miscellaneous Amendments) Regulations 2026.
The reforms aim to encourage earlier debt resolution and reduce the financial pressure caused by enforcement action.
Longer notice periods before enforcement begins
From May 2026:
enforcement agents must now wait 14 clear days after issuing a Notice of Enforcement before taking control of goods, doubling the previous seven-day period
if a debt adviser requests additional time, the notice period must be extended to at least 28 days
notices must include information about free debt advice services and explain the right to request additional time
Extra opportunity to resolve debts
Enforcement agents who have not made contact with a debtor during the first stage of enforcement must now provide another opportunity for repayment or a controlled goods agreement before escalating the case and applying higher fees.
Higher thresholds for percentage based fees
The threshold for percentage-based enforcement fees has also increased. High Court cases have increased from £1,000 to £1,200, and other cases from £1,500 to £1,900.
This change is expected to reduce the number of households subject to higher enforcement charges.
At the same time, fixed enforcement fees have increased by five percent. This is the first rise in 12 years.
Enforcement Conduct Board calls for higher standards
The independent Enforcement Conduct Board (ECB), established in 2022 with support from debt charities and the enforcement industry, continues to play a growing role in improving standards across the sector.
The ECB reports that enforcement firms handle almost eight million cases annually and recover more than £1 billion each year, much of it linked to unpaid council tax and traffic penalties.
While the majority of cases comply with current standards, the ECB has identified ongoing concerns, including:
threatening behaviour
poor treatment of vulnerable people
threats involving goods that are legally exempt from seizure
The Board is continuing to call for stronger legal powers to improve oversight and accountability.
New Vulnerability Standards from 2027
New ECB Vulnerability and Ability to Pay Standards will take effect in January 2027.
The updated framework moves away from fixed categories of vulnerability and instead focuses on how personal and financial circumstances increase someone’s risk of harm during enforcement action.
Under the new definition, vulnerability may be permanent, temporary, or fluctuating.
Enforcement firms must submit implementation plans by June 2026 outlining how they will comply with the standards.
A more measured approach to debt recovery
Taken together, the reforms across England and Wales represent one of the most significant shifts in council tax collection and enforcement practices in decades.
Longer repayment periods, greater protection before enforcement begins, improved signposting to debt advice, and stronger vulnerability standards are all intended to reduce unnecessary hardship and encourage earlier support for households struggling with debt.
Find out more about council tax billing and recovery and council tax enforcement on Shelter Legal.