Correspondence

Council tax information letter 3/2026: Response to council tax administration consultation and other issues

Published 15 April 2026

Applies to England

To: Local authorities in England

From: Local Taxation and Pensions Division, Ministry of Housing, Communities and Local Government (council.tax@communities.gov.uk)

Date: 15 April 2026

Dear Colleagues

We are publishing this information letter to inform you of the publication of the government’s response to the consultation to modernise and improve the administration of council tax and the key changes in the response. Furthermore, this information letter provides an update on several other matters of interest to local authorities.

Modernising and improving the administration of council tax

Last year the government launched a consultation to modernise and improve the administration of council tax. The intention was to consider ways to make the system fairer and more efficient for taxpayers and councils.

Today, the government has published its response to the consultation which can be found here. The consultation attracted significant attention receiving over 3,000 responses from a range of sectors and members of the public. We are very grateful to all local authorities who contributed to this consultation. Your views have been vital in informing the government’s approach.

The government’s response sets out a wide programme of reforms to the council tax administration system which will support taxpayers – particularly vulnerable taxpayers – and ensure councils are funded to deliver vital services for their communities.

Changes to billing

The government intends to move to default 12-month billing for all households. However, it recognises the concerns raised by councils about the transition. Therefore, the government will make amendments to move to default 12-month billing for newly liable taxpayers only from April 2027, for all other taxpayers from April 2028. Households will retain the right to request 10-month billing where preferred. The government strongly encourages councils to work with residents to ensure they are on their preferred payment plan from April 2028.

While the government recognises the work many councils undertake to ensure residents are well informed, it also recognises the large percentage of responders who reported that they were unsure of how council tax is used or how to access support. The government wrote to councils on 18 February setting out its expectations over the accuracy of information. The government is committing to working with councils to develop best practice guidance on ensuring council tax information is accessible, accurate and transparent.

Modernising support

The consultation responses supported government’s proposal to change the name and definition of the “Severely Mentally Impaired” council tax disregard. The government will therefore change this when parliamentary time allows. Furthermore, the government recognises calls to simplify the application process and will work with councils and disability charities to introduce a standardised application form. However, this form will not be a mandatory requirement and will ensure that councils can continue to offer bespoke application processes where appropriate. The government will expect councils to consider all applications made through this form.

The government recognises concerns raised in the consultation that the current carers and apprentice council tax disregards may be out of date. However, it appreciates that any changes to these disregards would have cost implications for local government. The government is therefore committing to review the feasibility of any changes to these disregards ahead of the next spending review. This will ensure local government is appropriately funded for any changes.

Collection and enforcement

It is clear from the consultation that there is a need to balance support for households with ensuring councils can collect the council tax they are owed. To improve these processes, we will be extending the time before a household loses the right to pay in instalments to at least 63 days from the first missed payment. The government will consult with councils on the steps councils should be following in this 63-day period, which could include issuing any reminder notices. Furthermore, the government will introduce a cap of £100 on the costs added for seeking liability orders.

These changes will be introduced through secondary legislation from April 2027. Ahead of this the government will engage with local authorities to assess any new burdens which may arise from these changes.

Challenging council tax bands

Since this consultation was published, the government has announced the High Value Council Tax Surcharge (HVCTS) which will be introduced in April 2028. This will require some properties to be placed in additional tax bands based on their values, alongside the council tax system. Given this, the government believes that changes to the banding challenge system in council tax should be aligned with the new HVCTS, to ensure consistency for taxpayers and councils. The government will consult further on the process for challenging bands as part of its consultation on the HVCTS later this year.

Renters Rights Act (RRA) 2025

The RRA will begin to have effect in England from 1 May 2026. The government recognises questions have been raised over the impact of these changes on council tax liability. As noted in our prior information letter of 18 February, the RRA already contains a provision to ensure liability remains with the tenant of a property after fixed term tenancies are abolished.

Furthermore, a class H exception from council tax premiums currently requires that the property has been subject to a tenancy that was granted for a term of 6 months or more before the exception can apply again (for the same owner). Due to all tenancies becoming periodic this could result in the exception no longer being able to reset for the same owner. The government has therefore laid regulations to ensure that the exception can apply again after the property has been subject to an assured tenancy. This amendment, alongside other consequential amendments relating to the RRA, is available here - The Renters’ Rights Act 2025 (Consequential Amendments) and Tenancies (Miscellaneous Amendments) (England) Regulations 2026.

Local government reorganisation and the second homes premium

Since 1 April 2025, billing authorities have been able to charge a premium of up to 100% on a dwelling which is substantially furnished and has no resident (‘the second homes premium’). Councils must make a formal determination in order to charge the premium.

Section 11C(3) of the Local Government Finance Act 1992 requires that “A billing authority’s first determination under this section must be made at least one year before the beginning of the financial year to which it relates”. This provision ensures that taxpayers are given adequate notice before the premium is first charged in the billing authority’s area.

The Local Government (Structural Changes) (Finance) (Amendment) Regulations 2026 were laid before Parliament on 14 April 2026. These clarify that restructured councils must give at least 12 months’ notice before introducing the second homes premium in a predecessor area where it was never previously applied.

The regulations will come into force on 8 May 2026 and can be found here: The Local Government (Structural Changes) (Finance) (Amendment) Regulations 2026

Should you have any queries, please contact the Ministry at: council.tax@communities.gov.uk.