Revealed: the worst deals on Council Tax rates in the UK

Which areas of the UK get the best – and worst – deals on their Council Tax rates? We take a look at how Council Tax rates vary across the UK.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

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Some parts of the UK pay high rates of Council Tax compared to the average income of residents, according to research by specialist mortgage platform Haysto. Let’s break down the findings and what they mean for you. 


Council Tax rates compared to annual income

In response to rising rates, Haysto conducted a study to see which area in the UK has the highest Council Tax rate in proportion to annual income. They did this by determining:

  • the average annual salary per area of the UK; and
  • what percentage of this salary residents typically pay out in Council Tax. 

In other words, if you’re in an area where the Council Tax rates are relatively high compared to the average annual salary, proportionately, you’re paying ‘more’ in Council Tax than someone living in a region where the average salary is high compared to the Council Tax rates.

So, although you might be paying roughly the same amount of Council Tax as someone based elsewhere, the impact on your living costs may be more noticeable. And, at a time when people are trying to recover from the financial impact of Covid-19, this new rate increase could cause further difficulties in less affluent areas. 

Where in the UK can we find the lowest and highest relative rates, though? Let’s check out the research in more detail.

Where people pay the lowest Council Tax rates relative to income

Some people in the UK only pay a relatively small proportion of their annual income in Council Tax. 

Surprisingly, Westminster is the winner here.  

Why is it surprising? Well, house prices in London are often well over £650,000, so Council Tax rates are typically high. However, the annual salary is higher, too, normally exceeding £40,000 on average, according to the research. 

As a result, Westminster residents only pay approximately 1.4% of their annual salary on their Council Tax bill.

Other top contenders include: 

  • Wandsworth: 1.43%
  • Hammersmith and Fulham: 2.07%
  • Camden: 2.74%
  • Lambeth: 2.79%

As we can see, the London boroughs dominate the top 10. People living in the top 10 areas will never normally spend more than 3% of their salary on Council Tax.  


Where people pay the highest Council Tax rates relative to income

At the other end of the scale, many people pay a relatively high amount of Council Tax each year. 

Residents in Richmondshire pay a hefty 7.85% of the average salary in Council Tax. While house prices are typically lower than in London, so is the average salary, which is just under £24,000. 

Proportionately, this means people in Richmondshire pay more in Council Tax as a proportion of the average income than elsewhere in the UK. 

Other areas with high rates include:

  • Gwynedd: 7.20%
  • North Devon: 7.11%
  • Rutland: 6.74%

In Scotland, rates are a little lower than in Rutland, with the ‘worst’ area being Argyll & Bute at 5.04%. However, rates are still higher than in London, and there’s no Scottish entry in the top 10. So, overall, many people in Scotland could be paying a high rate of Council Tax in proportion to their annual income.


What can we take from all this? Well, put simply, council tax rates vary widely across the UK. And while campaigners push for reform to make rates fairer, many of us face paying a substantial amount of our salaries towards the bill. 

Do you think you’re paying too much Council Tax? Well, you normally can’t challenge the amount itself, but you might be able to request a tax band review. The lower the band, the lower the rate – check your local council website to find out more about the process. 

Are you struggling to pay your bill? If you’re a student or you receive certain benefits, you might be entitled to a discount. Contact HMRC to learn more. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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