Written by: Kim Jones
It’s the bill I like paying least. Or at least it used to be. Last time my council tax statement arrived, I attempted to set the dog on it, but even he turned his nose up at the opportunity to shred the ‘envelope of doom’ into tiny pieces.
After all, paying council tax can seem like a great waste of cash – a huge chunk of income disappearing into the great unknown. And not only does it seemingly evaporate into the blue, there are the sneaky yet annoyingly-regular price increases, and the baffling payment structure too.
Where does the council tax money go?
But then I decided it was time to research, and find out more about council tax. Now I know precisely where my cash goes, and as a result, some of the sting has gone from the tail.
Council tax was introduced in 1993 and is a property tax, paid by residents of England, Scotland, and Wales. If you live in Northern Ireland, your local taxes are called rates.
How your tax is calculated
Your council tax is determined by the value of your property relative to other residents in your local area. Factors which affect council tax are the amount of tax payers in your local authorities territory, how much your local authority intends to spend each year, and the amount of funding from central Government.
Valuations were carried out by inspectors from the Valuation Office Agency, which is a division of HM Revenue and Customs. These were first carried out in 1991, and there are eight different price bands.
Band A – up to £40,000.
Band B – over £40,000 and up to £52,000.
Band C – over £52,000 and up to £68,000.
Band D – over £68,000 and up to £88,000.
Band E – over £88,000 and up to £120,000.
Band F – over £120,000 and up to £160,000.
Band G – over £160,000 and up to £320,000.
Band H – over £320,000.
Is the Council Tax band system fair?
And if you’re grumbling about paying too much, be reassured, because the banding system is rather fair – if you’re in the top band, you’ll be paying three times as much as people in the bottom band. If you’re in the average, or middle bands – C and D, you will pay one and a half times that of B and A.
History of the council tax
Council tax had a turbulent birth – it combined elements of both its predecessors – the incredibly unpopular community charge, or poll tax, and the property-based rates system. The poll tax, which was introduced by the Thatcher government, attempted to tackle weaknesses of the domestic rates system. It taxed people rather than property, and was so unpopular it caused widespread rioting. John Major’s government replaced the community charge with fairer council tax, which at first, was widely accepted.
Big tax increases
But rapidly accelerating increases, which reached an average of 12.9% in 2003, once again made the tax unpopular, and the Audit Commission called it ‘fundamentally flawed’. Calls for a replacement were made, as accelerating rates hit people on lowest incomes hardest, such as those on fixed incomes, and pensioners.
Council tax exemptions
Your council tax is based on two adults living in a home. If you live on your own, you’ll get 25% off your bill.
Certain people are not counted as adults, and these include:
People under 18.
People on apprentice schemes.
18 and 19-year-olds who are in full-time education.
College and university students (full-time)
People under 25 who receive funding from the Skills Funding Agency, or Young People’s Learning agency.
People with a severe mental disability.
Foreign-language assistants who are registered with the British Council.
Live in carers who are looking after a person who isn’t their partner, child, or spouse.
What your council tax pays for
Here’s a list of the main things your council tax pays for – as you can see, it’s an extraordinarily wide range of services:
Local and regional transport planning and policies.
Elections, registrar of births, marriages, and deaths.
Health and social care.
Support for older citizens, housing strategies, and help for homeless people.
Internet access in libraries.
Leisure centres, swimming pools, athletics tracks, and watersports.
Funeral services, cemeteries, and crematoria.
Maintenance of roads, bridges, and pavements.
Parking enforcement and car parks.
Museums and art galleries.
Refuse collection and provision of recycling facilities.
School and nursery facilities.
Magistrates and Coroner Court services.
Maybe not so bad?
So the next time my bill arrives, I won’t encourage the dog to attack it. Instead, I will go for a walk in the park and contemplate just how many things it pays for, plus how much it improves my local environment and quality of life.