Thousands of households face 25% council tax hike

Just over 150,000 households in Windsor and Maidenhead could see their council tax rise by a quarter next April.

The area’s struggling council has warned that it will be forced to issue a section 114 notice, meaning it is effectively bankrupt, if it’s not allowed to raise council tax bills by 25%.

According to the Local Government Chronicle, the council has made a formal request to the government to increase council tax above the allowed 4.99%.

If the request is passed, the 25% rise would mean households living in an average band D property would see their council tax increase by £320 a year.

But Windsor and Maidenhead council argue that their bills would still be ‘the lowest of all other Berkshire authorities.’

It says it has ‘an unstainable low level of council tax income’ compared to most other authorities, blaming the previous administration for cutting council tax over a since 2010.

They are not expected to receive a response until the new year.

What is council tax?

Council tax is a tax local authorities (councils) charge to pay for local services. It is paid by residents of properties within the area. The amount varies depending on your property's value, its location, and the number of people living there.

The tax is used to support local services such as:

• Waste collection and recycling
• Local education
• Police and fire services
• Social services
• Local infrastructure (roads, parks, etc.)

Council tax is typically calculated based on a property's valuation band, which reflects its estimated market value as of a certain date (usually 1991 in England and Wales).

Properties are assigned to one of eight bands (A to H), with band A being the lowest and band H being the highest.

The amount of council tax a household has to pay can also be affected by factors like:

• Discounts for single occupancy (if only one adult lives in the property)
• Exemptions for students or certain vulnerable groups
• Local council policies (some areas may have additional charges or rebates)

Each local authority sets its own council tax rates, so the amount you pay depends on where you live.

How much can local authorities increase council tax each year?

The government sets limits for council tax increases each year and local authorities must follow these limits or get special permission from the government, like Windsor and Maidenhead has.

The limits for 2024-25 were set at 3% for core council tax, with a future 2% allowed to cover adult social care - 5% in total.

The new Labour government recently confirmed that it will continue with the 5% increase cap for rises from April 2025.

What should I do if I can’t afford my council tax and fall behind on payments?

There are several things you should do if you’re struggling to afford your council tax or have fallen behind on payments, such as:

Contact your local council

Speak to your council and explain your situation as soon as you realise you have a problem. Councils often have processes in place to help people in financial hardship. They might offer you a repayment plan to help spread the cost over a longer period to make it more manageable.

Check for discounts and exemptions

You may qualify for discounts, reductions, or exemptions if:

• You live alone (25% discount)
• You or someone in your household is a full-time student
• You or someone in your household has a severe mental impairment
• You're on a low income or receive certain benefits (Council Tax Reduction or Support)

Visit your council's website to see what you're eligible for.

Prioritise your council tax payments

Council tax is a priority debt because councils have strong enforcement powers, including sending bailiffs. You should pay your council tax before other non-priority debts like credit cards or personal loans.

Seek free debt advice

We provide free and impartial advice so we can help you find a solution for managing your debts, including council tax arrears.

Avoid enforcement actions

If you ignore council tax arrears, your council may take enforcement action, such as:

• Applying for a liability order to allow them to take legal action, or
• Appoint bailiffs to recover the debt which will add extra costs to your debt.

Taking proactive steps, like contacting the council or seeking advice, can prevent this from happening.

Emergency support funds

Some councils have discretionary hardship funds or emergency grants. Speak to you council to see if any of these schemes are available in your area.