What is Council Tax and does it fund essential local services?
Council Tax may seem like yet another monthly bill which has little benefits. While set by each local council, it contributes a significant amount of the funds for local services.
Discover what is Council Tax and how it funds services you use daily. Find out if you’re paying the right amount and how to ask for a reduction. We’ll also cover what to do if you’re struggling to pay.
What is Council Tax?
Set by each local council, Council Tax is an annual fee that funds local services. Without it your rubbish wouldn’t get collected, public spaces wouldn’t be maintained and potholes would be a much worst problem!
Typically, you pay it in 10 monthly instalments with the following two months each year, there’s nothing to pay.
How is my bill calculated?
Like any tax, the rules that govern how much Council Tax you pays depend on:
- Your circumstances
- Valuation band of your property
- How much funding the council needs to raise
What does Council Tax pay for?
Many local services that we use daily are funded by Council Tax including planning, transport, highways, police, fire, libraries, leisure and recreation, rubbish collection and disposal, environmental health and trading standards.
The Local Government Association have produced a datasheet [PDF] which shows how each £1 of Council Tax is spent. Social care, unsurprisingly receives the largest share of fund.
What it doesn’t fund is health services, which are covered by other taxes.
How much is my Council Tax?
Your Council Tax bill largely depends on where you live and the value of your property. If you’re unsure of your local authority or what your bill will be, then either look at their website or give them a call.
If you’re in England then use the GOV.UK’s Find your local council tool. Simply enter your postcode and the website will do the rest.
Located in Scotland? Then the Scottish government has a list of all the local authorities along with their websites and contact details.
The Welsh government have a tool to look up your local authority. You can search using your postcode or list of local authorities.
Each local authority will list the amount that’s due for each Council Tax band. If in doubt, you should be able to get an answer quickly over the phone or via email.
What is my Council Tax band?
All property in the UK is split into multiple groups based on their value. These bands form the basis for Council Tax.
Both England and Scotland have 8 bands which range from A (cheapest) to H and are based on property values on 1 April 1991.
In Wales, there are nine bands ranging from A (cheapest) to I. These are based on property values on 1 April 2003.
The more expensive your property, the higher your band, which means you’ll pay more in Council Tax.
Can you change your home’s Council Tax band?
Your property could be in the wrong band, meaning you’re paying more than you should. You could even be entitled to a refund.
That said, you only ask the Valuation Office Agency (VOA) for a review. You can’t demand to be a different band. This can be risky as the VOA could decide to raise your property’s band.
Money Saving Expert estimate that around 400,000 properties are wrongly valued. Thankfully, they’ve put together a fantastic guide to checking and challenge your Council Tax banding. It should only take you around 10 minutes.
It’s worth taking the time to calculate if your property is in the right band or not and whether you deserve a rebate. You could save hundreds of pounds each year and be entitled to hundreds more in debates.
Can you reduce your bill?
As with any tax, you might be eligible for a discount depending on your circumstances.
The most common reasons for a discount are:
- Living alone or are the only adult in your home
- Low income
- In receipt of benefits (such as Jobseekers Allowance and Universal Credit)
- You’re a student or live with students
If you’re a care leaver, then you might be able to get a discount depending on where you live. Scotland, for example, has an exemption scheme for those between 18 and 26. In England and Wales, it depends on your county.
You might be entitled to a reduction if you’re a member of the armed forces, moved into a care home or hospital or in prison. However, you’ll still have to pay if you’re serving a prison sentence for failing to pay Council Tax.
Can you pay it over 12 months instead of 10?
While it’s typical to split Council Tax into 10 payments, most councils will allow you to spread your bill over 12 months.
Some might find having to make a monthly payment easier to budget and pay your household bills than having to pay for 10 months and have 2 months with no payments.
Most councils allow you to choose to spread your payments over 12 months instead of the usual 10. Some might find it easier to budget 12 equally payments. Simply ask your council if you can.
Help! I’ve missed a Council Tax payment
Even missing a single payment can cause problems. Your local authority may demand you pay the full year’s payment upfront. This might mean you now owe the local council thousands of pounds.
If you do miss a payment, it’s best to call your local council as soon as possible. The longer you wait, the less likely they are to be understanding.
They might let you make the payment on the same day and carry on as normal with future payments. Some council will allow you to overpay on future payments to make up for the one you missed.
Your council may be able to help reduce your bill if you qualify for a discount you’re not already using. However, each council has it’s own rules but should be willing to help.
How to complain about your Council Tax
Should you need to raise a complaint, it’s best to talk to your council first. They should resolve the issues within 12 weeks.
If you’re still not happy or they take longer, there’s a chance you can take your complaint to the Local Government Ombudsman.
What happens if I don’t pay Council Tax?
While your local council will do their best to help you, missing multiple Council Tax payments can quickly turn into a serious problem. In England, it could result in prison.
You’ll be sent a reminder within 14 days of a missed payment. You have 7 days to pay, after which your Council Tax debt is cleared and you can return to making regular payments.
If you don’t pay within 7 days or if this is your third late payment, you’ll receive a final notice. This will demand that you pay the remainder of that year’s Council Tax within 7 days.
Failure to pay will result in the council applying to the courts for permission to collect the debt from you. This is known as a ‘liability order’. They might ask your employer to repay the debt directly from your wages or reduce/stop your benefits.
The last resort is sending a bailiff to your home. You will be liable to pay your debt, as well as court costs and bailiff fees. These can quickly add up to hundreds of pounds.