Council Tax Collection

Leveraging social norms and omission bias to improve tax collection

Issues and Impacts

Solution

Context

In 2014-15, unpaid council tax payments equated to £4 million in London Borough of Haringey (LBH). Households that fail to make payments on time risk legal consequences and poor credit history. Amid consistent budget cuts, it was more important than ever for LBH to increase council tax collection rates.

Solution

Applying principles from behavioural science and design, The Behaviouralist modified the existing council tax reminders sent out to households who had recently missed a payment. We tested two new versions of the letters: one utilised contextualised social norms about the number of LBH residents that pay their taxes on time and the other omission bias messages.  The effectiveness of these new letters was compared to the letters previously sent out by LBH using a randomised controlled trial design.

The Results

The new communications led to an ROI of over 400% in just 75 days. Applied to all households over the course of a year, we projected an increase in over £400,000 in collected council tax payments.