FOI request reveals where the biggest council tax debts are

Most people have heard – and grumbled! – about council tax, but what actually happens if we don’t pay it?

A recent investigation by Sell House Fast looked into unpaid council tax across England, sending freedom-of-information requests to 315 councils to gather important details.

Here’s what they found.

The biggest council tax debts

• Liverpool city council has the highest unpaid council tax debt at £361m.
• Birmingham city council is next with £194m.
• Greater London owes a massive total of £905m in unpaid council tax.
• London boroughs make up many of the top ten councils with significant debts.
• Rural councils have lower council tax debts than highly populated areas.
• Most people who’ve fallen behind live in the north-west.

The financial impact

Unfortunately, unpaid council tax has a knock-on effect, as local budgets become strained when arrears build up.

This means councils have less money for essential services like rubbish collections, street maintenance and local schools.

It can also lead to higher tax bills, causing a vicious cycle.

Liverpool council even had to write off £25m in old debts in 2023, while bailiff referrals in Birmingham grew by 20% between 2022 and 2023.

Why do people fall behind?

Many reasons can lead to unpaid council tax, including:

• losing a job
• illness
• other unexpected costs

Council tax discounts and exemptions

If you’re struggling to keep up with council tax payments, it's worth looking into discounts or exemptions.

See if you’re ‘disregarded’

Certain people are not counted when calculating your bill, which can help lower the amount you owe.

This can include:

• under 18s
• people on certain apprenticeships
• full-time students
• severely mentally impaired individuals
• live-in carers for someone not related to you
• diplomats

If everyone in your household is disregarded, you could qualify for a 50% reduction on your bill.

If you live alone or all others are disregarded, you might get a 25% discount.

Discounts for students

Full-time students living in a household of all students are exempt from council tax. If you live with others who aren’t students, you’ll be disregarded.

To qualify, your course must be at least a year long and involve over 21 hours of study weekly.

Discounts if you’re disabled

If your home is larger than needed due to your condition, you might qualify for the disabled band reduction scheme.

This could lower your council tax bill to the next-lowest band or provide a 17% discount if you’re already in the lowest band.

Fallen behind on paying council tax?

Council tax is a priority debt, so there’s serious consequences if you don’t pay – councils can take legal action, leading to extra fees and bailiff visits.

If you’re behind on payments, it’s important to act fast:

• Contact your local council right away to discuss your situation.
• Look into any discounts or exemptions you may qualify for.
• Think about setting up a payment plan to manage your debt over time.
• Seek free debt advice if you’re struggling with money.

Don’t ignore it and hope the council will forget about it – this will only make things worse.

Free debt advice

If you’re struggling to afford your council tax, you might also be finding it hard to pay your other bills too.

Our free debt advice is here to help you get back on track and on the way to stressing less.