England: Councils pilot new powers to collect council tax directly from wages

A total of 29 local authorities have been chosen to be part of the trial working with the DWP and HMRC to be the first to use powers introduced by the Digital Economy Act 2017.

Through the trial, non-paying customers who are employed or have an income will be contacted to start paying their debts, or they will have their debt deducted directly from their earnings through their employer - should they be in a financial position to do so.

This is an Attachment of Earnings and is commonly used to recover debt. However, if a person fails to or refuses to supply their employment details, councils have been unable to recover unpaid council tax using this method.

The Act allows councils to obtain employer and income information from HMRC for people who have failed to pay their council tax and have an order to pay by the local magistrates court.

The pilot scheme allows councils to work with HMRC to share employment information that will allow councils to recover millions of pounds per year in unpaid council tax, which could otherwise be used to improve services to residents.

Councils are already working closely with national debt advice charities to support vulnerable residents who are struggling with debt.

If a person is found to be unemployed or does not hit a low income threshold, their debt will not be taken from them automatically.

Anybody who finds themselves in a position where they cannot pay their council tax should contact the local authority immediately to discuss their situation.

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