The UK city that went bankrupt and is owed £194m in unpaid council tax

Overflowing rubbish on a UK street

A new survey of local councils has revealed the amount of unpaid tax across England (Image: Getty)

Over 4.4 million bills have gone unpaid, piling up a staggering £4.4 billion in – and forcing over one million people into the hands of bailiffs, according to a survey

Property specialist Sell House Fast found that 1.8 million cases of unpaid council tax in England and Wales were referred to court in 2022/23, rising to 2.1 million in 2023/24, a 14% increase.

Liverpool City Council has the largest amount of unpaid council tax, with £362m owed.

has the second most unpaid council tax but the dubious honour of having some of the largest single accounts owing council tax.

After declaring bankruptcy in September 2023, Birmingham City Council has £194 million owed across all accounts in council tax arrears.

Among these accounts, the average debt stands at £997. However, some cases are far more extreme, with one account holder in Birmingham owing an eye-watering £641,777.

The three highest council tax debts in England and Wales, all within Birmingham City Council’s jurisdiction and exceeding £465,000, are linked to portfolios of multiple properties.

Birmingham, which has been slashing public services in 2024 to balance its books, said these cases had been in recovery for four years without resolution.

Councils are increasingly turning to bailiffs, with referrals rising sharply by 21% – reaching nearly 1.3 million cases in 2023/24.

Councils in the East Midlands have seen the sharpest spikes in referring residents with council tax arrears to bailiffs for collection, with an increase of 68% compared to the previous year. The West Midlands follows closely behind, with an increase of 58% in bailiff referrals.

Sell House Fast collected the data under Freedom of Information laws. The figures include responses from 84% of the councils in England and Wales, with the remainder failing to respond to the survey.

For more information about this research visit:

Birmingham Bullring and Selfridges building

Birmingham City Council was declared bankrupt last year (Image: Getty)

The average single council tax debt stands at £997. However, some cases are far more extreme, with one account holder in Birmingham owing an eye-watering £641,777.

The three highest council tax debts in England and Wales, all within Birmingham City Council’s jurisdiction and exceeding £465,000, are linked to portfolios of multiple properties.

Birmingham, which has been slashing public services in 2024 to balance its books, said these cases had been in recovery for four years.

Councils are increasingly turning to bailiffs, with referrals rising sharply by 21% – reaching nearly 1.3 million cases in 2023/24.

Councils in the East Midlands have seen the sharpest spikes in referring residents with council tax arrears to bailiffs for collection, with an increase of 68% compared to the previous year. The West Midlands follows closely behind, with an increase of 58% in bailiff referrals.

Ten councils with the biggest council tax arrears in England and Wales 

Source: Sell House Fast

If you are struggling to pay your council tax

Contact your council as soon as possible if you’re struggling to pay your Council Tax or are behind with your payments.

You can choose to spread your payments over 12 months instead of the usual 10 to reduce the amount you’re asked to pay on each bill. Ask your council to set this up for you.

Your council may give you a one-off discount if you still can’t pay what you owe.

You should also check if you’re eligible for:

  • Council Tax Reduction if you’re on a low income or get benefits including pension credit
  • A reduced council tax bill, eg if you live on your own or if you are a student

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