Overview

• Under the proposals, most households would by default pay council tax over 12 monthly instalments instead of 10, which could reduce average band D payments by about £38 a month.
• Councils would face stricter rules on debt recovery, including longer intervals before declaring full-year liability, capped enforcement fees and requirements to offer welfare checks and repayment plans.
• The consultation would introduce a modernised ‘significant cognitive impairment’ discount to replace the current severe mental impairment allowance and seek ways to simplify its application.
• Authorities with historically low bills in southern England are set to lose central grants under a recalibrated formula that assumes equalised tax bases, forcing them to consider service cuts or higher levies.
• Temporary protections and extra support for rural and coastal councils have been proposed to cushion the impact ahead of final decisions expected in autumn 2025.