2025 Council Tax Debt Crisis: £8.3bn Arrears & How to Stop Bailiffs
Council tax arrears have grown into one of the clearest flashpoints in the UK cost-of-living crisis.
With billions of pounds now unpaid, millions of households face letters, court action and the risk of enforcement agents turning up at their door.
The good news is that council tax debt is rarely a dead end.
There are clear rules on how debts escalate, firm limits on what bailiffs can do, and several ways to agree realistic payment plans or get formal debt help.
TL;DR – What You Need to Know
- Council tax arrears are around £8.3bn UK-wide in 2025, with an estimated 4 million+ households behind.
- Debts usually escalate Reminder → Final Notice → Liability Order → Enforcement (bailiffs).
- You can often stop bailiffs before enforcement by contacting the council, agreeing a payment plan or asking for a hardship reduction (Section 13A).
- If bailiffs are already involved, you still have rights: no forced entry for council tax in most cases, capped fees and the ability to ask for a payment plan.
- Longer-term help can include Breathing Space, DMPs, DROs, IVAs and, in limited cases, write-offs for severe hardship.
1. Why Council Tax Debt Is a 2025 Cost-of-Living Flashpoint
Council tax arrears have reached roughly £8.3bn across the UK in 2025.
In England alone, councils report around £6.6bn of unpaid tax, up by about 10% on last year.
Higher bills, squeezed incomes and greater use of private enforcement agents have pushed council tax up the list of problem debts.
Major UK debt charities say council tax is now a core driver of household debt issues, alongside rent and energy arrears.
Unlike many commercial creditors, councils tend to move quickly to court and enforcement.
That means extra stress and added fees if you do not act early – but it also means that understanding the process gives you real power to stop things escalating.
2. How Council Tax Debt Escalates – Step by Step
Every local authority has its own policies, but most follow a similar route once you miss a payment.
2.1 Typical escalation timeline
- Reminder Notice – sent after you miss one instalment.
- Final Notice – your right to pay monthly can be withdrawn and the full year’s bill demanded.
- Summons to Magistrates’ Court – the council applies for a Liability Order.
- Liability Order granted – legal confirmation that you owe the debt, giving the council extra powers.
- Enforcement agents (bailiffs) instructed – to collect the debt plus fees.
- Possible Attachment of Earnings / Benefits, or in larger cases, bankruptcy.
2.2 Why the timing matters
Once a Liability Order is granted, the council can use more serious recovery options and costs can climb quickly.
Acting at the Reminder or Final Notice stage usually gives the best chance of agreeing a plan without court or bailiff fees.
3. How to Stop Bailiffs Before They’re Instructed
3.1 Contact the council early and engage
Councils would usually rather recover the core tax than pay enforcement agents and risk extra fees going unpaid.
The key is to show that you are engaging with the debt, not ignoring it.
When you contact the council, be ready to provide:
- a simple income and expenditure breakdown (what comes in and what goes out);
- a proposed affordable monthly payment towards the arrears, based on what you can genuinely manage;
- a brief explanation of your situation – for example job loss, sickness, caring responsibilities, benefit delays or separation.
Many councils will accept low arrangements such as £10–£30 per month towards arrears,
provided you also keep up with your current-year council tax.
3.2 Ask about a Section 13A hardship reduction
Under Section 13A(1)(c) of the Local Government Finance Act 1992, councils can reduce or even write off council tax in cases of exceptional hardship.
This is often called a “discretionary hardship” or “Section 13A” application.
Section 13A can be especially helpful if you:
- are on Universal Credit or other income-related benefits;
- have disabilities or caring responsibilities that limit your ability to work;
- have had a sudden, sharp drop in income (redundancy, illness, relationship breakdown);
- are at risk of eviction, homelessness or severe fuel poverty.
Councils rarely promote Section 13A, but they must legally consider an application.
Awards are discretionary, yet even a partial reduction can make arrears far more manageable and reduce the risk of enforcement.
3.3 Check if you qualify for Council Tax Reduction (CTR)
Many people in arrears have never applied for Council Tax Reduction (CTR), even though they are eligible.
CTR schemes are run by local authorities and can reduce your bill by anything from a small percentage up to 100%, depending on income and circumstances.
You may be eligible if you receive:
- Universal Credit;
- Pension Credit (Guarantee Credit);
- income-related ESA or JSA;
- low or fluctuating wages, including zero-hour contracts;
- disability-related benefits or Carer’s Allowance.
In some cases, CTR can be backdated, which may reduce the arrears figure as well as future bills.
Check your council’s website for “Council Tax Reduction” or “Council Tax Support” and use its online claim form where possible.
3.4 Ask to merge arrears with your ongoing bill
Some councils will agree to combine existing arrears with the coming year’s council tax to create a single payment plan. This can:
- help avoid or halt enforcement where a realistic arrangement is in place; and
- allow you to spread the total across a longer period.
This option is not automatic, but it is worth requesting, especially if you have previously kept to an agreement and have only recently fallen behind.
4. If Bailiffs Have Already Been Instructed: Your Rights
4.1 Bailiffs cannot usually force entry for council tax
For council tax, enforcement agents can only enter your home by peaceful means. This means they can:
- come in if you invite them or you leave a door unlocked;
- take control of goods outside, such as a vehicle, if it belongs to you.
They cannot:
- force their way in or push past you;
- climb through windows or over fences to get inside;
- break doors or windows purely for council tax enforcement.
The safest approach is not to allow entry.
You can speak through a window, letterbox or intercom while you negotiate with the council or the enforcement firm’s office by phone or in writing.
4.2 Bailiff fees are capped by law
Fees for council tax enforcement are set by the Taking Control of Goods (Fees) Regulations.
For each Liability Order, the main stages are:
- Compliance Stage – £75 (when the case is first passed and a Notice of Enforcement is issued);
- Enforcement Stage – £235 plus 7.5% of any balance over £1,500 (for a visit to your property);
- Sale Stage – £110 plus 7.5% of any balance over £1,500 (if goods are removed and sold).
Stopping matters from reaching the Enforcement or Sale stages can save hundreds of pounds in extra fees on top of the original council tax.
4.3 You can still agree a payment plan with bailiffs
Even once enforcement agents are involved, you can usually propose a realistic repayment plan.
They are expected to take your circumstances into account and should not insist on lump sums you clearly cannot afford.
Ask for:
- a full income and expenditure assessment so you can evidence affordability;
- a written repayment plan with dates, amounts and reference numbers;
- a pause on further visits once the plan is agreed, as long as you keep to it.
If the suggested payment is too high, say clearly what you can afford and that you will pay this regularly.
A free, regulated debt charity can help you put forward a sustainable offer.
4.4 Extra protection for vulnerable households
Councils and enforcement firms are expected to take extra care if you are considered vulnerable. This can include situations where you are:
- disabled or living with a long-term health condition;
- experiencing serious mental health difficulties;
- pregnant or a single parent with young children;
- recently bereaved or affected by domestic abuse;
- struggling with literacy, language or understanding paperwork.
Where vulnerability is identified, enforcement may be paused, reduced or, in some cases,
returned to the council. Always tell both the council and the enforcement firm if you believe you are vulnerable,
and provide supporting evidence where you can.
5. Debt-Management Options That Can Pause or Write Off Arrears
5.1 Breathing Space (Debt Respite Scheme)
Breathing Space is a statutory scheme that can give up to 60 days of legal protection from most enforcement, interest and charges
while you work with a debt adviser.
Council tax arrears can be included once an approved money adviser has assessed your situation.
During Breathing Space, bailiff action should generally stop, giving you time to put a longer-term plan in place.
5.2 Debt Management Plan (DMP)
A Debt Management Plan is an informal arrangement where you make a single monthly payment to a DMP provider,
who then distributes it to your creditors, including councils in many cases.
Pros:
- one manageable monthly payment;
- interest and charges are often frozen by participating creditors;
- can be adjusted if your circumstances change.
Cons:
- does not automatically write off debt;
- may last several years, depending on what you can afford.
5.3 Debt Relief Order (DRO)
A Debt Relief Order is a form of insolvency aimed at people with very low income and few assets.
Council tax arrears can usually be included.
You may be suitable if you:
- owe less than a set total debt limit (for example around £30,000, depending on current rules);
- have assets below a modest threshold and do not own your home;
- have little or no disposable income after essential costs.
If a DRO is approved, it typically runs for 12 months. If your situation has not improved by the end,
included debts – often including council tax arrears – are normally written off.
5.4 Individual Voluntary Arrangement (IVA)
An IVA is a legally binding agreement between you and your creditors, arranged through an insolvency practitioner.
Council tax arrears can sit alongside other unsecured debts in the arrangement.
Pros:
- remaining included debts are usually written off after around 5 years of payments;
- creditors and enforcement action are generally stopped once the IVA is in place.
Cons:
- requires a reliable income and regular payments;
- can fail if payments are missed, which can leave you worse off;
- appears on your credit file for 6 years.
5.5 Bankruptcy (last resort)
Bankruptcy usually includes council tax arrears along with other eligible debts,
but it is a serious step with long-term effects on your finances, employment and assets.
It is generally considered only when other routes are unsuitable or have failed.
Independent, regulated debt advice is strongly recommended before exploring bankruptcy.
6. How to Reduce the Risk of Council Tax Arrears in Future
6.1 Switch to monthly Direct Debit
Paying by monthly Direct Debit can make it easier to stay up-to-date with instalments.
Some councils offer small incentives for this, and it reduces the chance of simply forgetting a manual payment.
6.2 Ask for 12-month instalments instead of 10
Many councils collect over 10 months, leaving two “payment-free” months.
You can usually request to spread payments across 12 months instead, which lowers each instalment and can make budgeting easier.
6.3 Claim every discount and reduction you are entitled to
A significant number of people with arrears are paying more council tax than they need to.
Check whether you qualify for:
- Single Person Discount – 25% off if you are the only adult in the property;
- Student exemptions – full-time students are usually exempt;
- Carer discounts – if you care for someone in your home;
- Severe Mental Impairment (SMI) exemption for eligible conditions;
- Disability Band Reduction where the home is adapted for a disabled person;
- discounts or rules for empty properties or second homes, depending on your council.
Your council’s website should list discounts, exemptions and how to apply, including what evidence is needed.
7. Final Takeaway: Act Early, Know Your Rights
The 2025 council tax debt crisis is real: arrears of around £8.3bn mean millions of households face letters, court action and potential bailiff visits.
Yet even at this stage, council tax debt is usually manageable if you act early and use the tools available.
The most important steps are to:
- contact your council as soon as possible, ideally before a Liability Order is granted;
- check your entitlement to Council Tax Reduction and consider a Section 13A hardship request if you are in serious difficulty;
- understand your rights around bailiffs, including limits on entry and fees;
- explore formal solutions such as Breathing Space, DMPs, DROs or IVAs if you have wider debt problems.
Handled early, council tax arrears can almost always be stabilised.
In many cases you can prevent bailiffs entirely and work towards a realistic, sustainable way to clear what you owe.
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