Council Tax Is A System of Debt Creation

This is a guest post by Alan Murdie, LL.B, Barrister, editor, CPAG Council Tax Handbook  Director, Council Tax Legal Services and Chairman of Nucleus Legal Advice Centre 

It is hard to believe that when Council Tax was introduced in 1993, it was promised to be a system that would be ‘simple’, ‘fair’  and one that would ‘protect the unemployed and those on low incomes from court action’

It is impossible to make such a claim today. Record numbers of people are ending up in court for failure to pay the council tax. Until 2013 millions of adults of working age on low incomes were protected by Council Tax Benefit (CTB), in place since the council tax was set up. Then CTB was removed virtually unnoticed and replaced with haphazard and confusing systems of localized support.i The numbers of people failing to pay the tax has soared by 40-50%.ii Council tax is now less a system of local taxation than one for creating debt for the poorest.


There are still many people who do not realise this even occurred, or what has replaced CTB from Land’s End to John O’Groats. It now means in England alone 326 different local schemes now operate. Trying to understand local support regulations since 2013 has proved well-nigh impossible for council officers. The one thing schemes have in common is that they are insufficient to protect the poorest adults in each area. Having no real idea how to implement Govt schemes, councils have largely proceeded by taxing previously protected adults. Most have done it simply because the Govt says they could, without considering the ethical, legal or financial implications in the long run. With certain councils liability has also been imposed to cover shortfalls caused by other financial mismanagement.

Privately, many local authority officers admit that they still do not know what they are doing. Supported neither by Central Government, nor their senior executives, there is a marked official silence on rising debts. What is clear is the growing number of people appearing on court lists (See: 120,000 summonsed to court)

Although dealt with in the magistrates’ court, non-payment of council tax is not a criminal offence, but recovery of a civil debt. The complexity of the system means that each recovery stage is delegated to computers, save at the court hearing where magistrates make liability orders. As most debtors don’t attend court, the first actual human being they encounter is a bailiff who demands fees, increasing the debt.

However, those who attend court, disputing liability or demand to see the evidence against them pose a major problem. Hearings are notoriously technical,iii  and the process being worsened by a spate of court closures over 2015- 2016. Breaches of basic rights at proceedings are common, with Councils also adding their own inflated charges as ‘Court Costs‘ often lacking any proper legal basis and never explained.


The actual cost to the Council of issuing the summons is £3.00 set down in the Magistrates Court (Fees) Amendment Order 2013 SI 1409. Yet Councils routinely add sums far in excess and are unable to explain what they represent. Though successfully challenged in the High Court in 2015, most authorities just continue. See: Nicolson v Tottenham Magistrates’ Court [2015] EWHC 1252

Many thousands of people are being pushed into debt for sums that they cannot afford and which in some cases are unlawful and unprovable. Beyond this, a policy of taxing the poor for money they do not have is irrational, making neither moral, economic or even mathematical sense. A policy of charging working age adults is luminously and fundamentally flawed by the failure to recognise that the same adults now being taxed are the same adults simultaneously suffering the bulk of means-tested benefit cuts: the housing benefit caps; the overall benefit cap: sanctions imposed on Jobseeker’s Allowance and the bedroom tax. So having suffered their incomes thus eroded, from where are they supposed to get the money for paying council tax.

i Section 33 Welfare reform Act 2012; Part I Local Government Finance Act 1992

ii Ollerenshaw Committee Report to Parliament 8 April 2016 Three Years On: A Report of an independent Review of Local Council Tax Support Schemes a link to the full text and findings can be found here:

iii  – See the Council Tax (Administration & Enforcement) Regulations 1992 SI 613 as amended.

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