Warnings of council tax debt ‘explosion’ in Scotland

A leading charity has warned of a council tax debt ‘explosion’ in Scotland and added that the pandemic could make the situation even worse.

Citizens Advice Scotland (CAS) said council tax debt is currently the number one debt issue in its network of offices.

According to figures from the charity, more than 2,200 people sought help from the Citizens Advice network in 2019/20 with a complex debt issue involving council tax, owing a cumulative £6.8million in council tax arrears

It added the average debt owed was over £3,000– almost three times the average council tax bill of £1,201.

The charity fears council tax debt could grow even further in 2021, as payment protections and furlough schemes end. This will force more people into reduced incomes and putting extreme pressure on household decision-making around which bills to pay, particularly council tax.

It is calling on people to make use of the Scottish Government’s Council Tax Reduction scheme which can help reduce future payments. For some people, it can also offer a backdate of up to six months.

CAS has an online tool at www.checkmycounciltax.scot for people to use to check all their Council Tax entitlements to savings, reductions, discounts and exemptions to help lessen the pressure on meeting council tax bills.

The charity has also recently developed a new online tool called Money Map, which allows people to round up all their options to boost incomes and cut living costs during these difficult times at www.moneymap.scot.

‘Scotland is potentially facing an explosion of council tax debt in 2021,’ said CAS financial health spokesperson, Myles Fitt.

‘The figures before the pandemic are bad enough, but the real fear is that Covid-19 is going to make matters much worse.

‘Councils across Scotland showed a real empathetic approach to those who found themselves in council tax payment difficulties, and the payment breaks in the first six months of the pandemic were extremely welcome. However this has led to arrears building up, arrears that will be difficult to meet for the many people who have during that period experienced an income drop due to unemployment or reduced working hours,’ added Fitt.

‘For others, this problem is yet to come in 2021 when the economic squeeze on personal finances is felt as the furlough scheme and payment support measures close at the end of April, ironically in the same month the first payments of council tax in the new financial year are due.

‘Action is required to stop council tax debt – already the number one debt issue the Citizens Advice network sees – becoming an even bigger problem next year.’

Photo Credit – Stevepb (Pixabay)