(qlmbusinessnews.com . Thurs 26th June, 2025) London, UK —
Households Saddled with £8 Billion in Council Tax Arrears as Further Increases Loom
Households across England, Scotland and Wales now owe over £8 billion in unpaid council tax, with the burden expected to grow as local authorities look to increase bills in the coming years.
New government data reveals that local authorities in England are owed £6.6 billion, with £642 million added to the tally in the year leading up to April. When including arrears in Scotland (£1.5 billion) and Wales (£160 million), the total outstanding debt surpasses £8 billion—more than double the value of unpaid energy bills in those nations combined.
Campaigners and charities are calling for urgent reform to council tax debt recovery practices, particularly condemning the use of bailiffs to chase payments from financially vulnerable households.
Debt Justice’s Toby Murray commented: “Most people falling behind on council tax are on low incomes, many already living in poverty. Rather than offering help, councils often send in the bailiffs—punishing people simply for being poor. This approach must end.”
Current rules in England mean that missing a single payment by three weeks—or missing three instalments—can trigger a demand for the entire year’s bill upfront. If the debt remains unresolved, bailiffs may be deployed.
Despite a growing outcry, the government is pressing ahead with plans that suggest council tax could rise by up to 5% annually. When asked during a recent Treasury Committee hearing, Chief Secretary to the Treasury Darren Jones confirmed that such increases are being “baked in” to government forecasts.
While councils are allowed to raise council tax by up to 5% without requiring a local referendum, many warn this could place unsustainable pressure on low-income families.
In the 12 months to April, councils in England collected £41.2 billion in council tax—a 7.2% increase on the previous year. Yet unpaid tax debts have climbed by 11% over the same period.
To address the crisis, the government is reviewing enforcement procedures, including bailiff conduct, and has proposed reforms such as capping court fees added to debts and switching the standard council tax schedule from 10 to 12 monthly payments.
The Local Government Association (LGA), which represents councils, emphasised that local authorities rely on council tax to fund essential services but acknowledged the challenges facing struggling households.
“Councils have a duty to collect taxes, but they recognise the financial hardship many residents face. Government must ensure sufficient funding is available to support those in need, or else costs will continue to rise for those least able to afford it,” a spokesperson said.
What To Do If You’re Struggling to Pay Council Tax
Contact your council as soon as possible—do not ignore payment reminders
Request smaller, manageable instalments based on what you can realistically pay
Apply for a council tax reduction if on a low income
Look into the Breathing Space scheme for temporary relief
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