Billions of pounds in unpaid council tax owed by struggling households ahead of expected rise

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BBC News (Business)

Newly-released data reveals that local authorities in England are owed a total of £6.6bn in unpaid council tax, with an additional £642m added to those arrears in the last year. When combined with figures from Scotland and Wales, the cumulative amount owed in the three countries exceeds £8bn. Some campaigners are calling for a more compassionate approach to collecting council tax debt, rather than relying on bailiffs. The government is also anticipating a 5% annual increase in council tax, according to Chief Secretary Darren Jones. Councils are allowed to raise council tax by up to this amount, but can go above this limit with approval from central government or a local referendum. In the past year, local authorities in England collected a total of £41.2bn in council tax, a 7.2% increase from the previous year. However, the amount owed cumulatively has risen by 11% over the same period. In Scotland, £1.5bn is owed, while Wales has arrears of £160m. Charities argue that the current method of council tax collection in England disproportionately affects low-income households and those living in poverty. The government has announced plans to cap the fees added to debt when going to court and to make 12 monthly payments the default option for council tax. They are also reviewing debt enforcement practices, including the use of bailiffs.

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