The government says it’s changing the way council tax is administered, for the first time in 33 years.
Billing for council tax will be shifted to 12-month payments by default, rather than the current 10 months.
There will also be a cap on the costs which councils can charge when seeking a liability order to recover overdue bills: this cap will be £100.
And vulnerable people will have more time and support to settle their outstanding council tax bills under the reforms.
Under the current system, missing one monthly payment means taxpayers become liable to pay the entire year’s council tax in a single payment just two weeks later.
This will change from next year with households given 63 days, roughly two months, to settle their bill.
A statement from the government says councils will be “required to work with them on a sustainable repayment plan.”
Housing Secretary Steve Reed says: “Too many families are facing aggressive enforcement action, with people left terrified of bailiffs knocking on the door because one month’s council tax bill was missed.
“We will stop this and make the system fairer by supporting families who fall behind.
“I want to thank Martin Lewis and his charity for their tireless campaigning, shining a light on this crucial issue affecting millions of people.”
MoneySavingExpert Martin Lewis, who is also the founder and chair of the Money and Mental Health Policy Institute, says: “Council Tax debt collection is so aggressive it’d make banks blush.
“It’s the most vicious and damaging form of legal debt collection out there – causing counterproductive misery for millions.
“Currently, in England, if you miss a monthly payment, many councils, usually within three weeks, demand payment for the entire year.
“How people who can’t find a month’s money are expected to find a year’s I don’t know.
“Yet if they can’t pay, within just three more weeks, they are often taken to court, have ‘admin costs’ added, and soon see bailiffs sent in.
“No commercial firm would be allowed to do anything close – constituents are treated worse than customers.”
The new rule from next April means councils must wait two months, not three weeks, to ask for a year’s money, and the ‘admin costs’ will be capped at £100.