Converter transformer inter‐tap short‐circuit faults in on‐load tap changers have occurred successively in recent years, resulting in severe accidents and enormous losses. Due to the lack of an effective model and credible arc‐in‐oil conductance parameters, related fault analysis has remained a challenge. This paper develops a bidirectional field–circuit coupling method for modelling inter‐tap faults, in which the electromagnetic field and electric circuit are directly coupled and simultaneously solved. After verification based on on‐site arcing tests, the Schavemaker model is applied to calculate the non‐linear arc conductance. Taking a ±800 kV UHVDC system as a study case, inter‐tap faults in a 415 MVA/500 kV converter transformer are simulated and analysed. Under an inter‐tap fault, the flux distribution is significantly distorted, with large radial leakage fluxes near the shorted turns, and the circulating current can reach tens or even hundreds of kiloamperes. Further calculation results for faults between various taps indicate that leakage flux distortion and the change in the transformation ratio are the main factors influencing the short‐circuit current. These representative findings effectively reveal the variation characteristics of the leakage flux and the short‐circuit current as well as the non‐linear relationship between fault severity and tap position under inter‐tap faults.