Council Tax Bills

Council Tax Bills

The UK council tax system is a local taxation which is collected by your local authorities in order to pay for local services. It applies to all domestic properties, including houses, bungalows, flats, maisonettes, mobile homes or houseboats, whether owned or rented.

When the Council Tax system was first introduced in 1991 (replacing the unpopular poll tax), all properties in England were valued and put into a particular banding ranging from A to H. A being the cheapest and H being the most expensive banding. The average tax band is ‘D' and all council tax bills are relative to this band. Typically band ‘D' tax bills are £1400 for 09/10.

Band

Value

Ratio

Ratio as %

Average

A

up to £40,000

6/9

67%

£933

B

£40,001 to £52,000

7/9

78%

£1089

C

£52,001 to £68,000

8/9

89%

£1,244

D

£68,001 to £88,000

9/9

100%

£1,400

E

£88,001 to £120,000

11/9

122%

£1,711

F

£120,001 to £160,000

13/9

144%

£2,022

G

£160,001 to £320,000

15/9

167%

£2,033

H

£320,001 and above

18/9

200%

£2,800


How Council Tax is Spent

Once the Council Tax has been collected it is distributed to a number of different services, typically the County Council will take up to 75% of the taxes, the fire and police take a further 10%-15%, leaving 10%-15% to the district, parish or town councils.

The lions share of the money goes to the County Council and they use the tax to fund day to day running of services such as educiation, social services, waste disposal  as well as funding larger projects on transport improvements, schools etc. Usually the largest bill comes from providing housing benefit, social services, childrens services whilst the services often talked about such as waste disposal, recycling, footpaths, leisure, street cleaning etc are spent by the city or parish council and actually take up only a small amount of the total tax bill.

District Council Tax Bills

The city or district councils only take a small proportion of the council tax bill, but they spend the money on the more visibile items to the residents, such as:

 

Council Tax Government Top Ups

Typically your council tax bill only makes up 25%-35% of the councils earnings, with additional funds coming from business rates and government grants. In certain areas the government grants are particularly large, this is usually in densely populated areas where there is a tedancy to have a higher proportion of social issues per head.

Most of the county council expenditure is actually stipulated by central government and local councils are obliged by law to provide a number of services. The remaining money can be spent on discretionary services and are determinded by the local council.

Council Tax Bill Review

The biggest critism laid at the Council Tax system is that it is a regressive tax in that isn't calculated with referance to an individuals ability to pay. The tax bill that you receive depends entirely on the value of your home, rather than your income. Therefore as someones income decreases the proportion of their total income that is spent on the tax increases dramatically.

Recently there have been studies into the amount of Council Tax that goes on funding local government pensions which have found that between 20% and 25% of all the tax is used to boost these pension pots. Typically the argument is that council employees suffer a lower salary when compared to the private sector and so these ‘gold-plated' pensions are designed to mitigate that somewhat.



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