Householders face an extra month's 'stealth' tax

Posted on November 21, 2006

District says it could save £150,000 by standardising council tax collection date.

South Bedfordshire District Council is to collect council tax payments earlier each month from next spring.

The council's Executive Committee says that changing the collection dates for council tax and non-domestic rates from next April could make annual savings of over £150,000 for the council.

But in effect many householders who are paid their wages later in the month will find they have lost one of their two 'free' annual months.

At present, most people decide to pay their council tax in ten monthly instalments - these are collected from April to January, leaving February and March as 'free' months.

Depending on when people moved to the district, the current payment date is either on the 10th, 18th or 25th of each month.

The Executive have agreed to change the payment date to the 5th.

This will mean in practice that a lot of householders will find the April tax payment is being debited from their March wage packet instead of April's wages.

Executive Member with responsibilities for financial affairs, Cllr Philip Penman, said: "This minor change to the collection dates will make a real difference to our cash flow and should allow us to make significant savings. This will help us to continue to deliver high quality services while keeping council tax bills as low as possible."

The district council collects tax on behalf of the county council, the town and parish councils, and the police and fire authorities - it has to send a calculated amount to these agencies each month. Because much of the tax collected arrives after the time these external payments need to be made, South Bedfordshire District Council has to meet short-term financing costs.

Cllr Penman explained that well over half of the people in the district pay tax by direct debit. He added "This is the most efficient and convenient method of paying these routine bills.

"When the bills are sent out next March, I have asked that a direct debit mandate be included in every envelope. If even more people pay this way, we will be able to further reduce administrative costs and so have more resources available for front-line services."

Source: Leighton Buzzard Observer, 21 November 2006