Council Tax Debt
The next Scottish Government must act on Council Tax debt.
by Myles Fitt, head of CAS Financial Health team.
This article was first published in The Herald on 4 April 2026,
On Wednesday, higher Council Tax bills became a reality for every single one of us.
As I’ve written here before, Council Tax debt is the most common debt issue people bring to the CAB service in Scotland and has been for well over a decade. This will continue unless reform happens, particularly around debt recovery.
What’s different this year is that we’re about to elect a new Scottish Parliament and Scottish Government, providing a new opportunity to make the case again for progress on this.
A key contributing factor of Council Tax debt is the fast and harsh debt recovery process, particularly when it’s applied to those who are unable to pay due to low income. If you miss just one month’s payment, the Council very quickly demands that you pay the whole year’s bill. This then escalates to the legal recovery of the debt, which can include funds being taken directly from your bank account.
This can have a hugely damaging effect on those who are struggling to pay. Their already limited funds need to be urgently redirected from essential living costs such as food, heat and shelter or from paying off other debts, to avoid the legal consequences. Bank accounts can also be frozen for several days, leaving people unable to access their money.
Duncan (not his real name) was just about managing to pay his rent and Council Tax. One month, he was unable to pay his Council Tax, but due to the speed of the enforcement and recovery process, he had to prioritise paying the arrears on the Council Tax to avoid having to pay for the whole year’s bill. This meant he fell behind in his next month’s rent, moving him from one form of Local Authority debt to another.
Duncan’s experience starkly highlights the unnecessary and indeed counter-productive debt recovery process. If someone is on a low-income and unable to pay this month’s Council Tax, how on earth are they then supposed to be able to pay the bill for the whole year?
Councils have a wide range of payment flexibilities to help those in need, and they stand ready to help. This is welcome. But the problem is this recovery process is driving some of the demand for that help when it doesn’t need to be.
This is because the process is aimed at people who have the money to pay but refuse to pay. It is not designed for those who are struggling to pay but who always seek to pay. These are the people we are seeing coming into the CAB service, day after day. Typically on low incomes, they are caught up in a recovery process that’s not intended for them.
The system is misaligned. It needs reformed.
Yet Scotland is the only part of the UK not committed to some form of wide-scale review of Council Tax administration and debt recovery. The Welsh Government has already made reforms to make it fairer on those struggling to pay while protecting Council incomes. England is poised to follow suit.
The next Government at Holyrood must follow the same path and deliver this much-needed, too long-awaited reform.