Barnsley Council will be working with HM Revenues and Customs (HMRC) to be the first to use debt information sharing powers introduced by the Digital Economy Act (2017).
It means the council, alongside 29 other local authorities in England and Wales, will be able to access employer and income information from HMRC for people who have failed to pay their council tax - a move which could lead to an order being imposed by magistrates.
Throughout the one-year pilot project, non-paying customers who are employed or have an income will be contacted to start paying their debts, or they will have their debt deducted directly from their earnings through their employer.
Council tax rose by 4.49 per cent earlier this year which, when broken down, includes 2.99 per cent to help fund general services - such as bin collections, roads and area councils - and 1.5 per cent which will be ring-fenced for adult social care.
Coun Alan Gardiner, cabinet spokesman, said: “We’re pleased to be working with the HMRC on the pilot to recover unpaid council tax as this has a direct impact on the services that we deliver to all of our residents.
“It’s great that the vast majority of Barnsley people pay their council tax every month. This money contributes towards our day-to-day running costs and helps to fund vital services to our residents.
“We know that there are many reasons why people do not pay their council tax. This pilot will help us to recover unpaid council tax from non-paying customers who are employed or have an income.”
There are 111,618 domestic properties in Barnsley, but of these around 8,100 have nothing to pay due to exemptions such as students, pensioners and residents who are in receipt of 100 per cent council tax support.
While £109m was collected in 2018/19, a total of £2.7m was unpaid, according to the council.
After the pilot year ends, a review will take place to gauge its impact before a decision is made whether it’s rolled out to every local authority.
“We’ll always continue to support people who are genuinely struggling financially to make ends meet, working closely with financial support services across the borough,” Coun Gardiner added.
“Anybody who finds themselves in a position where they cannot pay their council tax should contact us immediately to discuss their situation.”