Council tax is a domestic property tax which is paid by all adults – whether they are homeowners or are living in rented accommodation. The money raised from council tax is used to fund services provided by local authorities such as waste disposal, police, etc. In this article we examine:
- How council tax works in the UK
- How much council tax you should be paying
- How council tax bands are calculated
- Who has to pay council tax
- Consequences of missing payments
How does council tax work?
Council tax is usually paid in 10 equal instalments although some councils give residents the option to pay monthly, twice a year or annually. The price is the same however it is paid. It can be paid online, or inhabitants can choose to pay in cash (at post offices, banks, etc.), by cheque or through direct debit.
How much council tax should I be paying?
How much council tax you pay depends on where you live in Britain as different councils charge different amounts. To find out how much you should be paying, you should go to the website of your local council and enter your postcode.
There are 3 factors which affect your council tax bill:
- the council tax evaluation band for your home,
- how much your council charges for that band, and
- whether you are exempt from paying, or entitled to a discount.
How are council tax bands calculated?
Council tax bands are calculated according to the value of the property where you live, and there are different bands for England, Wales and Scotland.
The tiered system for council tax bands means that the more expensive your home is, the higher your council tax bill will be.
The bands for England and Scotland were set according to the April 1991 Nationwide House Price Index while the bands in Wales were updated in April 2003. The band you’re placed in is calculated according to how much your property would have been worth in 1991 (or 2003) even if it’s a new-build. This tiered system means that the more expensive your home, the higher your council tax bill.
Who has to pay council tax?
Council tax is compulsory for all residents over the age of 18. However, there are a number of discounts and exemptions.
If you live alone (with or without children), you’re entitled to a 25% single person discount. If you have a low income and/or are claiming certain state benefits, you might also be entitled to a council tax reduction. Also known as council tax support, the discount can be as high as 100%, but this depends on the scheme run by your local council and your personal circumstances. Households with a disabled member and full-time students (even over 18s) are exempt from paying council tax.
Questions on council tax
Tenants in the UK are normally expected to pay council tax. In some cases, the council tax payment may be integrated into the rent payments, and the landlord would be responsible for paying the council tax. However, if there are no tenants in a residence, the landlord would be responsible for paying council tax. In the case of refurbishment of the property, which remains empty for the duration of the renovation, each council may decide whether to charge and how much to charge for council tax.
A property in the UK can be exempt from council tax if it is fully occupied by full-time university students. Student residences are automatically exempt from council tax. However, the liability to pay the tax remains with the tenants, and some councils may not grant a full exemption if there are any non-student residents living in a property.
Council tax in the UK is calculated per household, not per person. The full amount is due if the property has not tenants, depending on the terms set by each council. If only one employed person resides in a property, they may apply to a 25% discount on their council tax bill.
What happens if you don’t pay council tax?
If you’re struggling to pay your council tax, it’s crucial that you let them know as soon as possible. If you are late in paying and ignore the reminders, your local council can demand the whole year’s council tax as an upfront payment. They can take a number of measures to force payment. These include:
- taking out a liability order from a magistrate,
- sending bailiffs to seize property from your home,
- taking money directly from your salary and/or state benefits, and/or
- up to a 3-month prison sentence.