Outstanding council tax debt in England has reached £7.4 billion, according to the Ministry of Housing, Communities and Local Government, up 11.3% on the £6.6 billion recorded at the end of 2024/25. Debt charity StepChange says one in three of its clients is behind on council tax, and is calling for collection rules to be reformed.
TL;DR · LAST REVIEWED Updated 2 July 2026
- Outstanding council tax debt in England has reached £7.4 billion.
- That is an 11.3% rise on the £6.6 billion recorded at the end of 2024/25.
- One in three StepChange clients is behind on their council tax bill.
- New collection rules from next April will give households longer before a full year's bill can be demanded.
KEY FACTS
- Outstanding council tax debt across England has reached £7.4 billion.
- That is up 11.3% on the £6.6 billion recorded at the end of the 2024/25 financial year.
- One in three people contacting debt charity StepChange is behind on council tax.
- Council tax is classed as a priority debt, meaning councils have stronger legal powers to recover it than most other debts.
- From next April, councils must wait two months rather than three weeks before demanding a full year's council tax after a missed payment.
- Administration costs added to council tax debt recovery will be capped at £100 under the same reform.
Outstanding council tax debt across England has reached £7.4 billion, according to figures from the Ministry of Housing, Communities and Local Government, an increase of 11.3% on the £6.6 billion recorded at the end of the 2024/25 financial year.
Outstanding council tax debt, England
Why council tax debt is treated differently from other bills
Council tax is classed as a priority debt, meaning councils have significantly stronger legal powers to recover it than apply to most consumer debts such as credit cards or personal loans. Missing a single payment can trigger a fast-moving process: a reminder is typically sent around two weeks after a missed payment, and if a household misses payments for a third time in a year, or does not pay within seven days of a reminder, the council can demand the entire remaining year's council tax in one lump sum. If that goes unpaid, the council can apply to a magistrates' court for a liability order, giving it the power to use bailiffs to recover the debt.
What debt charities are saying
Debt charity StepChange has said one in three of the people contacting it for help is behind on council tax, describing the latest figures as unsurprising given a wider pattern of households struggling to afford essential bills. The charity is calling for reform of council tax collection rules, including a formal pre-action protocol before enforcement action begins, and greater uptake of council tax support, which it describes as a widely under-claimed benefit.
What is actually changing
Reformed collection rules are due to take effect from next April. Under the new rules, councils will have to wait two months, rather than the current three weeks, before demanding a full year's council tax after a missed payment, giving households significantly longer to catch up before facing the most severe recovery action. Administration costs added on top of the debt itself will also be capped at £100 under the same reform, addressing a specific complaint from campaigners that these charges can escalate a manageable arrears situation quickly.
What to do if you are behind on council tax
The most important step if you fall behind is not to ignore the reminder or final notice. Councils are generally willing to agree a revised payment arrangement if contacted before enforcement action begins, and anyone struggling should also check whether they are eligible for council tax support, known as council tax reduction in some areas, which reduces the bill itself rather than just spreading payments over a longer period. Free debt advice is available through charities such as StepChange, National Debtline and Citizens Advice before a situation escalates to bailiff involvement.
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DISCLAIMER
This article is editorial information, not financial advice. Kael Tripton Ltd is not authorised or regulated by the Financial Conduct Authority. Figures were correct at the last review date shown above; verify current rates and rules with the primary sources listed below before acting.
Frequently asked questions
How much council tax debt is outstanding in England?
£7.4 billion, according to the Ministry of Housing, Communities and Local Government, up 11.3% on the year before.
Why can councils demand a full year's council tax after one missed payment?
Council tax is a priority debt with stronger recovery powers than most consumer debts. Missing payments or a reminder can trigger a demand for the full year's remaining balance.
What is changing in council tax debt collection rules?
From next April, councils must wait two months rather than three weeks before demanding a full year's council tax, and administration costs will be capped at £100.
What should I do if I am behind on council tax?
Contact your council before enforcement action begins to arrange a revised payment plan, check whether you qualify for council tax support, and seek free debt advice from a charity such as StepChange or National Debtline.
SOURCES
- GOV.UK: Council tax collection statistics – accessed 2 July 2026
