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HouseWorth
© GetAgent Limited 2024
  1. Blog
  2. What do I pay Council Tax for?
Advice about properties
20 October 2023

What do I pay Council Tax for?

Sam Edwards
Senior Writer & Researcher
What do I pay Council Tax for?

Table of contents

  1. 1. What is Council Tax?
  2. 2. What do I pay Council Tax for?
  3. 3. How much is Council Tax?
  4. 4. What happens if I don't pay Council Tax?
  5. 5. Summary: All for one, and for all!

Council Tax is one of the largest taxes we pay in this country. But where does all the money go? In this article, we take a closer look at how our hard-earned cash is spent by local authorities.

What is Council Tax?

Council Tax is a yearly property tax imposed by councils to fund local services like education, rubbish collection, and libraries. The amount you pay depends on factors like your property's value and personal circumstances.

Most people pay Council Tax in ten monthly instalments. It's a big part of local funding, making up about 13% of the budget, along with government grants and business rates.

Who's responsible for paying Council Tax?

Council Tax is the collective responsibility of adults cohabitating in a domestic property. This includes:

Owner-occupiers: If you own a house and live in it as your main residence, you're responsible for making a monthly Council Tax payment.

Second homes: You're also liable for the Council Tax if you own a second home, even if it's not your primary residence.

Unoccupied homes: If your second home is unoccupied, you're still responsible for paying Council Tax. However, there are discounts and exemptions available for certain situations, for example, properties undergoing major renovations or being actively marketed for rent.

Tenants: If you're renting a property, you, the tenant, are responsible for paying Council Tax. However, if you have a joint tenancy, all tenants are jointly liable, meaning any one of them can be held responsible for the full amount. Landlords are usually not responsible for paying Council Tax for their rental properties.

What do I pay Council Tax for?

You might be wondering - what does Council Tax pay for, and how does it affect me?

Council Tax pays for state education in your local area, as well as social care, libraries, parks, cemeteries, street cleaning, council housing, and much, much more.

If you're a healthy adult who hasn't had children, you probably won't experience the direct benefits of Council Tax, but that doesn't make it any less important. Society benefits from access to valuable public services. Without them, vulnerable residents in your local area will experience a massive drop in both life quality and life expectancy.

Trafford Council 2023/24

Trafford, part of Greater Manchester, relies on Council Tax to fund its local services. Check out the table below to see how it's spent.

ServicesGross spending (£million)Income (£million)Net spending (£million)
Children’s services and schools242.3191.950.4
Adult social services130.556.773.8
Highways12.33.98.4
Growth and planning20.122.9-2.8
Environment and infrastructure9.21.67.6
Waste collection22.20.321.9
Recreation and tourism8.73.35.4
Corporate support28.18.120.0
Benefit payments and other services83.658.924.7
Net spending557.0347.6209.4

How much is Council Tax?

The amount of Council Tax you pay is determined by several factors, including your valuation band, your local's Council Tax rate, their Council Tax requirement, and your personal circumstances.

Your valuation band

In England and Wales, every property belongs to a valuation band (or council tax band) - a table designed by the Valuation Office Agency (VOA) which categorises properties from A to H according to the value the property was assigned on April 1st 1991.

England
BandProperty value at 1 April 1991
Aup to £40,000
B£40,001 to £52,000
C£52,001 to £68,000
D£68,001 to £88,000
E£88,001 to £120,000
F£120,001 to £160,000
G£160,001 to £320,000
Hmore than £320,000
Wales
BandProperty value at 1 April 2003
Aup to £44,000
B£44,001 to £65,000
C£65,001 to £91,000
D£91,001 to £123,000
E£123,001 to £162,000
F£162,001 to £223,000
G£223,001 to £324,000
H£324,001 to £424,000
Imore than £424,000

Local Council Tax rate

Your local council uses the VOA'S valuation bands as a basis for their tax rates, which are updated according to how much they need to raise each year (Council Tax requirement). Parish councils also can request a precept (an additional amount on top of your Council Tax bill) to fund specific local projects. In the capital city, it works a little differently - the Greater London Authority (GLA) collects the precept to fund important London-wide organisations.

Every billing authority can have different tax rates. Find yours on your local council's website.

What's a parish council?

A local parish council is one of the smallest levels of government, focusing on community-specific matters within parishes, villages, or small towns. It deals with local issues like parks and community even, often working with higher-level councils to address community needs.

Your personal circumstances

Some households are eligible for discounts or exemptions which reduce the amount of Council Tax you owe. Common examples include a single-person discount, student discount, or exemptions for certain types of properties, like places of worship.

If you are on a low income or facing financial hardship, you may be eligible for Council Tax support, which can be used to reduce your Council Tax bill.

What happens if I don't pay Council Tax?

If you don't pay Council Tax, you could run the risk of having a charging order made against you. Let's take a closer look at the process a council will likely follow to claim its money:

  1. Payment reminders: Initially, your local council will issue reminders in the form of letters and emails. These outline the outstanding tax amount and the due date for payment.
  2. Penalty charges: If you continue to ignore your payment reminders, the council will introduce additional charges in the form of penalty fees, often referred to as 'surcharges'. These are added to the outstanding balance.
  3. Debt recovery measures: If you continue ignoring your Council Tax reminders, the council may employ various debt recovery measures, like sending bailiffs to your property or obtaining a court order.
  4. Attachment of earnings: In some cases, the council may seek permission to have your employer deduct the tax directly from your wages or benefits, a process known as 'attachment of earnings' or a 'deduction from benefits'.
  5. Bankruptcy or charging orders: In extreme cases, the local council may pursue legal action, such as obtaining a court order to declare you bankrupt or placing a charging order on your property. This can potentially lead to the forced sale of your property to recover the outstanding debt.

Summary: All for one, and for all!

Council Tax is a tax that funds both your local community and area - whether you're happy with it or not, when the tax works right, it works to benefit everyone in society. Hopefully, after reading this article, you know a bit more about where your money goes each month.

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