Council tax missed payment: new rules from April 2027

What the government confirmed

On 12 October 2026 the Ministry of Housing, Communities and Local Government published council tax information letter 5/2026, its response to the technical consultation on council tax enforcement. The letter applies to England. It sets out the steps councils in England will be required to take before enforcement action over a missed council tax instalment, and confirms the move to 12-month billing. The technical consultation, Improving enforcement of council tax, was published on 1 July 2026 and closed on 29 July 2026.

The letter follows a written statement made on 15 April 2026 by the Minister of State for Local Government and Homelessness, Alison McGovern, who announced the reforms, including the 100 pound cap on liability order costs and the 12-month payment option. The written statement said the consultation on council tax administration received over 3,000 responses, and that the reforms would be delivered over the course of this Parliament. The 12 October 2026 letter confirms the detail of the enforcement steps and the billing changes for households in England.

The new steps before enforcement

From April 2027, councils in England will be required to issue both a reminder notice and a final notice before a household loses the right to pay council tax by instalments, according to MHCLG. MHCLG says a final notice may not be issued earlier than 41 days after the first missed payment, and at least 14 days after the last reminder. After a final notice, the taxpayer has 21 days to bring the account up to date. If they do not, they lose the right to pay in instalments, according to MHCLG.

MHCLG describes this as extending the period before a household loses the right to pay in instalments to 63 days from the first missed payment. If the account is brought back up to date during the year and payments are missed again later, the two-notice sequence begins afresh. MHCLG says guidance will include an optional template for reminder and final notices, so that councils can use a standard format for the two documents.

Liability orders and costs

The costs a council can seek for a liability order are capped at 100 pounds, a measure announced in April 2026 and confirmed in the 12 October 2026 letter. The government says it will not remove any council tax recovery tools, and that guidance will consider best practice in using them. The letter therefore keeps the existing recovery powers available to councils in England while setting the cap on the costs that can be sought for a liability order.

MHCLG says the Ministry of Justice will require bodies that employ or contract certificated enforcement agents, including councils with in-house agents, to be accredited by the Enforcement Conduct Board. This applies to the bodies that employ or contract certificated enforcement agents, and covers councils with in-house agents as well as those that contract such agents. The accreditation requirement sits alongside the retention of recovery tools and the 100 pound cap on liability order costs.

12-month billing

From April 2027, councils must make newly liable households aware of their right to request 12-month billing. Households will not be moved automatically unless they ask, according to MHCLG. The requirement therefore applies to households that become newly liable from April 2027, who must be told of the option to spread payments over 12 months rather than the usual 10.

From April 2028, 12-month billing becomes the default for all households in England, and households keep the right to request 10-month billing, according to MHCLG. The 10-month option is therefore retained after the default changes. The two dates set out in the letter are April 2027 for newly liable households and April 2028 for all households in England.

The arrears picture

MHCLG statistics show local authorities in England collected 43.9 billion pounds in council tax in 2025-26, an increase of 2.6 billion pounds or 6.4% on 2024-25. The average in-year council tax collection rate in England was 95.6% in 2025-26, a decrease of 0.3 percentage points on 2024-25, according to MHCLG. The collection rate measures the share of the year's council tax that was collected during the year.

Council tax arrears outstanding in England at 31 March 2026 were 7.4 billion pounds, an increase of 782 million pounds on the end of 2024-25, according to MHCLG. The arrears figure is separate from the in-year collection rate and covers amounts outstanding at the end of the financial year. The statistics release sets out both the amounts collected in 2025-26 and the arrears position at 31 March 2026.

What happens before April 2027

Until the new rules take effect in April 2027, the existing council tax enforcement rules continue to apply. The reminder and final notice requirements, the 41, 14 and 21 day rules and the 63 day window described in the 12 October 2026 letter therefore do not apply before April 2027. The same applies to the requirement for councils to make newly liable households aware of the right to request 12-month billing, which begins in April 2027.

MHCLG says a further data collection exercise will assess the new burdens costs for councils, with details to be circulated with local authorities shortly. The letter also states that guidance will include an optional template for reminder and final notices, and that guidance will consider best practice in using recovery tools. The 100 pound cap on liability order costs was announced in April 2026 and confirmed in the letter, while the accreditation requirement for bodies employing or contracting certificated enforcement agents is set out by MHCLG as a Ministry of Justice requirement.

Source: MHCLG: Council tax information letter 5/2026.

Related coverage on Kael Tripton: Council Tax Liability Order 2026: What It Means After Court, Council Tax Arrears in England: Why the Debt Keeps Growing, Council Tax Arrears: Process, Bailiffs, Recovery Options, Council merger plans paused: what it means for council tax and 2027 elections, Council Tax Reform: What It Could Mean for Your Bill.

Frequently asked questions

What did the government confirm on 12 October 2026 about council tax enforcement?

MHCLG published council tax information letter 5/2026, its response to the technical consultation on council tax enforcement. It applies to England and confirms that from April 2027 councils must issue both a reminder notice and a final notice before a household loses the right to pay council tax by instalments.

What are the 41, 14 and 21 day rules?

According to MHCLG, a final notice may not be issued earlier than 41 days after the first missed payment, and at least 14 days after the last reminder. A further 21 days then runs from the final notice; only after that does the household lose the instalment right.

How long is the period before a household loses the right to pay by instalments?

MHCLG describes the new steps as extending the period before a household loses the right to pay in instalments to 63 days from the first missed payment.

What happens if the account is brought back up to date?

The requirement to issue a reminder and a final notice resets if the household catches up during the financial year, MHCLG says, so the council starts again with a fresh reminder and final notice.

What is the cap on liability order costs?

The costs a council can seek for a liability order are capped at 100 pounds, a measure announced in April 2026 and confirmed in the 12 October 2026 letter.