Tackling Your Council Tax
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On top of ever-increasing bills for mortgages, food, fuel and petrol, hard-pressed householders face an above-inflation rise in their Council Tax. According to the Department for Communities and Local Government, the average Council Tax bill in England will rise by 4% with effect from next month.
Band D households face an average rise of £53, with bills increasing from £1,321 to £1,374. In 1999/2000, the average Band D bill was just £798, so it has leapt by £576 in nine years. The Band D rate has risen by more than seven-tenths (72%) over this period, which comes to 6.2% a year compounded. Hence, Council Tax is gobbling up a higher and higher proportion of our income.
Then again, these are the lowest increases in Council Tax for fourteen years. Indeed, in 2003/04, bills rose by more than an eighth (12.9%); recent yearly rises have been more modest. What's more, the government may order some councils (possibly as many as forty) to limit this year's increase to 5%. Although this would bring down householders' contributions to local government spending, it would require councils to cut back on their services in order to remain in budget.
Council Tax bands (England)
Council Tax assigns properties into eight bands -- the more valuable the property, the higher its band. Here are the bands for England, based on property valuations from 1991:
Band | Property value | Multiple of Band D |
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A
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up to £40,000
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2/3
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B
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£40,001 to £52k
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7/9
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C
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£52,001 to £68k
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8/9
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D
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£68,001 to £88k
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1
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E
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£88,001 to £120k
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11/9
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F
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£120,001 to £160k
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13/9
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G
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£160,001 to £320k
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15/9
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H
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£320,001+
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2
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As you can see, Council Tax for a Band A property is two-thirds of the Band D bill, whereas the rate for a Band H property is double Band D. For example, I live in a Band F property, so my Council Tax is 1.44 times the Band D rate. For the record, my bill for 2008/09 is £2,230, up 3.57% on the previous year. Thus, I'm obliged to cough up an extra £77 this year.
Council Tax: like it or lump it!
Almost two in three properties in England fall into Bands A to C, so most of us pay less than you'd expect. What's more, Council Tax only funds around a quarter (25%) of council spending, with the remainder coming from central government and business rates.
However, Council Tax is a statutory tax imposed on us by law, so we have to ‘like it or lump it'. Alas, failure to pay your Council Tax can lead to a prison sentence. Hence, when preparing your household budget, make Council Tax your top priority.
How can you curb your Council Tax?
In brief, there are four ways to reduce your Council Tax:
1. Claim the single-occupant discount. If you are the only adult (excluding students) in your household, then you qualify for a 25% reduction in your bill. However, you only get this discount if you ask for it, so don't forget to tell your council that you live alone.
2. Claim Council Tax benefit. If you are on a low income or rely mainly on state benefits, then you may qualify for means-tested help. For more advice, visit the Department for Work and Pensions website.
3. Appeal against your valuation. For more information on how to lower your band, read Cutting Your Council Tax and The Risk Of Rebanding Your Council Tax.
4. Move to a cheaper property!
Right, that's it from me. I'm off to set up a standing order for ten monthly payments of £223. Ouch!
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