Number of council tax dodgers soars to highest level since 2009
Research by Debt Justice, a campaign group, found the figure increased by 40pc last year, from 3.2 million in 2023.
It amounts to the largest number of households in council tax arrears since 2009, when the global financial crash wiped out families' savings.
In total, taxpayers owed around £6bn to cash-strapped local authorities last year, up from £5.5bn the year prior. Councils are already facing a £2.3bn funding gap this year, according to the Local Government Association.
Campaigners said the figures show local authorities should focus on the 'growing crisis' of tax arrears rather than increasing council tax.
Nine in ten town halls increased the tax by the maximum 5pc this year, bringing the average cost of a Band D property to £2,280.
And a nationwide clampdown on second home owners has left them being charged double council tax. The premium, which has been introduced by more than 200 councils, means the average bill on a second home is £3,672. Telegraph Money is campaigning for the levy to be abolished.
John O'Connell, of lobby group the TaxPayers' Alliance said: 'With a record 4.4m people now in council tax debt, town hall bosses should be focusing on helping struggling households, not hammering second homeowners with punitive premiums.
'Hiking taxes on one group won't solve the growing crisis facing millions of others.'
Earlier this year, The Telegraph revealed that Labour councils are chasing almost twice as much unpaid council tax as Conservative-led authorities.
Our analysis showed councils are already chasing £4.4bn in unpaid taxes. Of this, more than £2.5bn was owed to councils run by Labour, compared to £673m owed to Tory councils.
Debt Justice highlighted that people who miss a council tax payment are generally from the poorest households.
The Government is currently considering a ban on the use of bailiffs to chase arrears and will publish a consultation later this year.
Andrew Dixon, of campaign group Fairer Share, said: 'I am deeply concerned by Debt Justice's recent findings. This alarming increase underscores the urgent need to reform our outdated and regressive council tax system.'
Councillor Adam Hug, housing spokesman for the LGA said: 'All councils make every effort to collect the that which is owing to them and 96 per cent of council tax is collected in the year in which it is due.
'When there are instances of unpaid council tax, it is often due to complex circumstances or people already facing hardship, and local authorities seek to work with individuals to work out a payment plan and avoid them lapsing into debt.'
The Ministry for Housing, Communities and Local Government was contacted for comment.
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Average pay was 1.5pc higher after taking inflation into account. Total pay, which measures average wages including bonuses, fell from 5pc to 4.6pc during the period. Public sector pay grew by 5.7pc, while private sector pay slipped from 4.9pc to 4.8pc. The wholesaling, retailing, hotels and restaurants sector showed the strongest regular annual growth rate in the wake of the Chancellor's decision to raise the national minimum wage in April. Yael Selfin, chief economist at KPMG UK, said the labour market outlook 'is uncertain' days after the Bank of England cut rates to 4pc but indicated it was becoming cautious about cutting rates further. He said: 'Slow to abate wage pressures may warrant caution from the Bank of England before cutting rates further. 'We anticipate unemployment to continue to trend upwards and improved labour supply to contribute to easing pay pressures throughout the remainder of 2025.' 07:30 AM BST Jobs in retail and hospitality hit hard ONS director of economic statistics Liz McKeown said: 'Taken together, these latest figures point to a continued cooling of the labour market. 'The number of employees on payroll has now fallen in ten of the last twelve months, with these falls concentrated in hospitality and retail. 'Job vacancies, likewise, have continued to fall, also driven by fewer opportunities in these industries.' 07:19 AM BST Good morning Thanks for joining me. The number of people on payrolls has fallen to its lowest level since October 2023, official figures showed, in the wake of Rachel Reeves's tax raid on businesses. Staff numbers declined by 164,000 in July compared to the same month last year, according to the Office for National Statistics (ONS), taking the total to 30.3m. 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