Tax arrears in England are reaching a record high of almost £6 billion as households struggle with rising bills

Council tax arrears in England have reached a record high of £5.97 billion, with a further £488 million (or 9 per cent) now owed compared to last year, data shows.

Outstanding payment arrears have increased by 67 per cent since 2019, compared to just £3.58 billion five years ago, according to data from the Department for Leveling Up, Housing and Communities.

For England and Wales combined, this amount has passed the £6 billion mark and stood at £6.2 billion as of 31 March.

National Debtline said a third of callers are in arrears with the council, and this is the most common priority debt its advisers have heard about.

The charity said its callers owe an average of £1,762 in arrears, which is up 49 per cent from just £1,181 in 2019.

Overdue taxes owed by the council are known as a ‘priority debt’, meaning they must be paid before other debts, such as credit card debt.

With the average council tax rising to £106 this year, an increasing number of people are likely to fall into arrears.

The charity warned that, combined with the cost of living, more people are at risk of financial difficulties.

Steve Vaid, CEO of the Money Advice Trust, said: ‘The Council’s tax debts are on a worrying upward trend and the sheer scale of arrears now underlines the need for urgent action.

‘But this is nothing new. Council tax remains one of the most common debts among our National Debt Line customers, and recent pressures on the cost of living mean many more people are struggling to keep up with their payments.”

Ahead of the July election, Money Advice Trust, which runs the National Debtline, has called for council tax collection reform to improve collection practices.

It says this will reduce payment arrears and ensure low-income households get the support they need.

The charity said people should not be liable for their entire annual bill if they fall behind on payments, and that councils should offer affordable repayment plans before resorting to other collection methods.

Currently, those in arrears are liable to pay their full annual tax bill if they miss a payment.

Those with debts can be sent to jail for up to 90 days if the court finds that you do not have a good reason for not paying your tax bill.

Money Advice Trust has also called for independent regulation of the bailiff sector to ensure fair treatment of people in debt.

“Councils play a vital role in helping residents with out-of-control bills and ensuring that council tax, crucial to funding local services, is collected in a way that is fair and affordable,” Vaid said.

‘Reforming collection practices should be a priority for the next government, including preventing people from being held liable for their full annual council tax bill after falling into arrears.

‘I would urge anyone concerned about council tax or other bills to seek free, independent advice from the National Debt Line. Our advisors are ready to help you and can tell you the options.’

National Debtline offers free expert advice and can be contacted on 0808 808 4000.