Council tax bill crush Britain’s poorest – just like poll tax

Struggling families are being squeezed harder than ever by sky-high council tax bills – with low-income households now forking out nearly as much on council tax as they do on income tax.

A new report from the Resolution Foundation has revealed that the poorest households in the UK spend 4.8% of their income on council tax, a huge jump from 2.9% in 2002. Meanwhile, the wealthiest are barely noticing the cost, paying just 1.5% of their income on the levy.

This means that in 2020, the poorest families were spending more than three times as much of their income on council tax as the richest households.

And those less well-off households now spend only £300 less on council tax than they do on income tax each year.

The Resolution Foundation warns that the council tax system is ‘outdated’ and broken, and is looking more and more like the dreaded poll tax that sparked riots and played a big part in bringing down Margaret Thatcher.

Hard-up households pay more

Council tax was introduced in 1993 as a fairer way of funding local services. The tax is based on property values from 1991 in England and Scotland – meaning people in modest homes are being stung, while those living in large properties get off lightly.

The problem has been made worse by cuts to council tax benefits under the Tory/Lib Dem government in 2013, resulting in millions struggling to pay.

And things could be about to get much worse, with councils across the country running out money, forcing them to increase bills.

Basic council tax rates will rise by up to 4.99% in April, with some councils – including Labour-run Bradford and Newham – given permission to hike bills by 9.99%.

Lalitha Try, an economist at the Resolution Foundation, said: “The poorest families are being hammered by council tax. It’s a totally broken system that looks more like the poll tax every day.”