More than £9bn is now owed to councils in unpaid council tax, newly published data reveals, as millions of households continue to struggle with their finances and charities warn of a deepening affordability crisis.
The figures show uncollected council tax had risen to £7.4bn in England by the end of March, with separate data from Scotland and Wales pushing the total above £9bn. While £43bn of what was levied during the financial year was collected – a collection rate of 95.6% according to the Ministry of Housing, Communities and Local Government – the £2.2bn that went unpaid represents a growing burden.
“Unpaid council tax in the UK has risen to over £9bn, with charities calling it a crisis and the government planning reforms.”
“Our advisors know all too well just how deep the council tax affordability crisis runs,” said Vikki Brownridge, chief executive of the debt charity StepChange. “With one in three of those coming to StepChange behind on this bill, these latest figures are no surprise to us and point to a system that perpetuates debt with little to no constructive route out.”
The problem, charities say, is that billions of pounds in support is going unclaimed. Discounts available include a 25% reduction for adults living alone, full exemption for full-time students, and the ability for people with disabilities to move to a lower council tax band. Those on low incomes can also apply for Council Tax Support, but it requires an active application. Charities such as National Debtline argue that local authorities need more funding to provide consistent support, and have long campaigned against the use of bailiffs, court threats, and prison sentences for non-payment, warning that such tactics deter people from seeking help.
In response, the government has published plans to reform the council tax collection system in England. Under proposals announced in April, people struggling to pay would be given 63 days – roughly two months – to settle their bill, rather than facing demands for the full year’s payment after a single missed month. Councils would also be required to work with residents on sustainable repayment plans. The changes, which include spreading payments over 12 months instead of the current 10 instalments, could be introduced next year.