Paying your Council Tax

Death and Taxes are the only two certainties in life. One of the many taxes which we are burdened with is the good old council tax. Like or loath it is a bill that you do not want to miss any payments on. To be clear, you should pay all your bills on time, but there is something about the council tax that stands out as unique.

If I was behind on my bills and I had to list in order of important the bills which need to be paid I would most definitely put council tax right at the top, with mortgage, gas and electricity.

The council do not take too lightly to you missing payments or failing to pay, they are quite active in pursuing non-payments. They really want that money ?

If you are reading this article from America, the council tax equivalent there is called property tax. If you own a home in America you pay property tax, if you are a tenant then your landlord will pay the property tax.

How it all started

Local government needs funds to be able to run local services. Some of the money it needs is received from central government the rest of it is made up from taxing the local residents based on the size of the property in which they own.

The council tax has been around in many forms, just the name has change and all the various instances of this tax were the same. To take money from your pocket and place it into the clutches of the local council

The poll tax or also referred to as The Community Charge was introduced into Scotland in 1989 and then into service in England and Wales from 1990.

The Poll Tax was a single flat-rate per-capita tax on every adult. The rate was to be set by the local council, although there was a reduction for poorer people.

This charged each person for the services provided in their community. Due to variations in the amount of local taxes paid by residents and the amount of money given to each local council which was provided by central government, led to differences in the amount charged between councils and the money which they could raise.

The change from payment based on the worth of one’s house to a poll tax was widely criticised as being unfair, and needlessly burdensome on those less well-off.

By the time of the 1992 general election, legislation had been passed replacing the poll tax with the Council Tax from the start of the 1993/1994 financial year. During that time the VAT rate went from 15% to 17.5% to go towards paying for £140 reduction in the tax. (The government will not be denied the money they believe they are owed)

During this time the higher VAT rate remained despite an earlier policy of charging a higher poll tax.

The same cake just sliced differently

Even though the Poll Tax was abolished in the early 90’s and was “replaced” by the council tax. The two systems closely resemble each other. The way in which council tax was charged was by placing properties into bands.

Placing properties into bands meant that the charge was levied on the property capital value instead of a notional rental value.

The council tax has not changed much since its inception other than the introduction of discount and exemptions for example people living on their own will receive a discount of around 25%

How Is Council Tax bands work?

Council tax is charged based on which of the many bands your property falls within. Different councils will charge different rates across the country. The resident of each property will pay tax based on the property as it is assessed in its band.

It may not seem like a fair system as the council tax that you buy is not set the same across the country or even in the same town. You may find yourself paying more than your friend down the street simply due to the fact that your house is on the border of a council tax band.

Local councils use the money which they collect to pay for local services such as schools, road maintenance, social services and the like.

The council tax is determined on how much money they get from central government. It may surprise you that the council tax only makes up 25% of what the councils need to operate, and the rest comes from central government. In recent years central government has frozen the amount of money which they give to local councils. This is led to local councils to make the decision as to whether they wish to raise taxes or leave them as they are.

Council Taxes are either as one lump sum or monthly across 10 months from April until February.

What does the Local Council spend the money on?

Local service like:

  1. Bin collection
  2. Police services
  3. Fire service
  4. School funding
  5. Local public services. Libraries, social centers
  6. Social care.

If I don’t pay the council tax what will happen?

If you decide that you do not want to pay council tax you can be assured that they will not be too happy with you. They are very keen to get that money out of your pockets and into theirs.

It is important that you pay on time and in full. Although if you are finding it difficult in making the payments it is important that you contact your council as soon as possible, they may be able to offer you help.

If you do not pay the council will request the local Magistrate issue a “liability order”. This order will mean that they are legally demanding payment. 

If you continue not to pay the council could take the taxes directly from your wages or benefits. If money is still outstanding, they can request the bailiffs to pay you a visit to remove any good of value which they may be able to sell to cover the cost of the debt.

One way to foil the bailiffs is to not allow them entry into your property and state to them that their implied right of access to your property has been revoked. Now they are trespassing anytime they step foot on your property. (Seek legal advice on this)

If again you fail to pay, and the Bailiffs are unable to recover and assets of value then you could face up to 3 months at her Majesty’s pleasure breaking rocks.

Getting help with paying your council tax.

Should you find yourself in a position where you are unable to pay the council tax you could do the following:

Single:  If you are the only person living in the property you could be eligible for a 25% discount.

Financial Hardship:  Some councils could provide you with help if you are on a low income or are having financial problems. The schemes which councils have in place are dependent on individual councils and also depends on eligibility.

Disabled:  You may be able to apply for disabled band reduction if you or someone in your household is disabled.

Empty Property:  If your property is empty for over 6 months you can apply for a discount of up to 50%. This will depend on individual councils.

Holiday Home:  If it is not your main property for example is used as a holiday home and is fully furnished you could apply for a discount. Varies between individual councils.

In Hospital or Care home: If you are in the hospital, or a care home you do not have to pay Council Tax.  Make sure that you or someone else notifies the local council.

Property repossessed: If your property has been repossessed you do not need to pay council tax.

Exemptions from Council Tax:  If the property is occupied by full time students or those under 18 are exempt.

Properties under repair: Properties under repair or renovation do not pay council tax

Property Tax Band:  Check to see that your property is in the right band. If you are in the wrong band you can ask for a reduction. If you are in a lower band but ought to be in a higher band, we would suggest keeping quiet. (Not to be taken as legal or financial advice)

Credit card companies are also regulated by The Financial Conduct Authority

Many people in the U.K struggle with debts and many do not know how to start to repay them speaking to a debt advisor is one of the best things you will do along with taking action yourself by speaking directly with your creditors. and

You should always seek professional advice when handling debt problems. Cashute are not licensed debt advisers and any information contained in this article should not be taken as legal advice. It is your Responsibility to seek out correct legal advice

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