Council tax increases: what you need to know

Most local authorities will be hiking council tax by the maximum amount this year – with some receiving special permission to increase rates even higher.

Recent analysis by the PA news agency reveals that a whopping 85% of the 139 top-tier councils are planning to increase council tax by the maximum allowed.

Local authorities who want to hike council tax by up to 4.99% have to put the suggestion to a full council meeting, where it’s voted on.

They need special permission for any increases above this.

According to the PA:

• 122 councils are waiting for their proposals to be approved
• 17 proposals have been confirmed
• the remaining 14 authorities haven’t revealed their plans yet

Which councils are opting for smaller rises?

Just 15 councils say they’re proposing increases of less than the maximum allowed – with seven keeping rises at, or below, 4%:

• Wandsworth – 2.00%
• Lincolnshire – 2.99%
• Rotherham – 3.00%
• Essex – 3.75%
• North East Lincolnshire – 3.98%
• Doncaster – 3.99%
• Kensington & Chelsea – 4.00%

And which ones have asked for bigger increases?

So far, these councils have received permission to exceed the 4.99% limit:

• Birmingham – 7.49%
• Trafford – 7.49%
• Somerset – 7.50%
• Newham – 8.99%
• Windsor & Maidenhead – 8.99%
• Bradford – 9.99%

But what’s prompting such widespread hikes?

Many councils are struggling with rising costs and dwindling budgets because of:

• government funding cuts
• increased demand for services
• rising inflation

This means councils need to raise money so they can maintain essential services like fixing our roads, emptying the bins and supporting vulnerable residents.

 If they don’t raise council tax, they may struggle to provide these basic services.

The impact on residents

Higher council tax squeezes the poorest residents more than three times as hard as those who are well-off.

A recent report from the Resolution Foundation found that those who are struggling spend 4.8% of their income on council tax, compared to 1.5% for the wealthiest.

Experts have described the council tax system as flawed, mainly because it’s based on house values from 1991. It’s also drawn comparisons to the widely criticised poll tax it replaced.

Are you struggling to pay your council tax?

If you’re finding it hard to keep up with council tax payments, it's worth seeing if a discount or exemption can help lighten the load.

See if you’re ‘disregarded’

Some people aren’t counted when it comes to calculating your council tax bill. This can help lower the amount you owe.

People who might be disregarded include:

• under 18s
• those on certain apprenticeships
• full-time students
• severely mentally impaired individuals
• live-in carers for someone not related to you
• diplomats

If everyone in your household falls into one of these categories, you could be eligible for a 50% reduction. If you live alone or everyone else is disregarded, a 25% discount may apply.

Discounts for students

Full-time students living with other students are completely exempt from council tax. If you share your home with non-students, you will be disregarded but not exempt.

To qualify, your course must last at least a year and involve over 21 hours of study a week.

Discounts if you’re disabled

If you need a large home due to a disability, you might qualify for the disabled band reduction scheme.

This can lower your bill to the next lowest band or give you a 17% discount if you’re already in the lowest one.

Fallen behind on council tax payments?

Council tax is a priority debt, meaning there are serious consequences for non-payment.

If you don’t pay, councils can take legal action, leading to extra fees and bailiff visits.

If you can’t pay, it’s important to act fast:

• Contact your local council right away to discuss your situation.
• Look into any discounts or exemptions you may qualify for.
• If you’ve fallen behind, see if you can agree a payment plan for your arrears.
• Get free debt advice.

Don’t ignore the problem – this will only make things worse.