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Pilot scheme launched to help recover millions in unpaid council tax

Published: Tuesday, 2nd July 2019

Birmingham City Council is one of 29 local authorities chosen to pilot a scheme that will help local councils recover unpaid council tax.

Currently this costs local authorities in England around £3 billion, as of 31 March 2018, with the arrears dating back to the introduction of council tax in 1993.

Birmingham City Council is taking part in the trial working with HMRC to be among the first to use the debt information sharing powers introduced by the Digital Economy Act (2017).

During this trial non-paying customers who are employed or have an income will be contacted to start paying their arrears, or they will face having their debt deducted directly from their earnings through their employer.

Last year (2018/19) Birmingham City Council issued around 444,000 bills to resident households totalling more than £382m in council tax – with a collection rate of 94.4 per cent, which meant more than £21m was unpaid. The national average collection rate is 97 per cent.

During the same year unpaid council tax was pursued via the courts with 71,000 individuals awarded liability orders – with this pilot scheme aiming to further improve the council’s collection rate.

The Act allows councils to obtain employer and income information from HMRC for people who have not paid their council tax and have an order to pay by the local magistrates court.

Cllr Brigid Jones, Deputy Leader of Birmingham City Council, said: “The majority of Birmingham’s citizens pay their council tax, which helps us pay to for vital services and support some of the most vulnerable people in our city.

“We know households face financial struggles and we offer all the support we can, both directly and through the Citizens Advice Birmingham. But, there is a disappointing minority of people who have the means to pay council tax but don’t. It’s not an option, it’s a legal and civic obligation, and these are the people we will be holding to account through this initiative.”

Anybody who finds themselves in a position where they cannot pay their council tax should contact Birmingham City Council on 0121 303 1113 (option 3) to discuss their situation.

The pilot will last one year before being reviewed before a decision is made whether to roll the programme to all councils in England and Wales.

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