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Council Tax, the ins and outs.

May 30, 2022 | Landlords   Tenants  

Council tax is something we all have to pay but there is so much more to it than simply getting an annual bill from the council and making sure you pay it on time. In this article we will take a detailed look at everything to do with council tax, what it is, who it applies to, what the bands mean and describe who is exempt or entitled to a reduction.

What is Council Tax and what does Council Tax Pay for?

Let’s start right at the beginning and explain what council tax is. Council tax is a charge levied by your local council to pay towards the services that the council provides such as libraries, refuse collection, police and fire service, street lighting, street cleaning and road maintenance for example. In case you were wondering why road maintenance falls under the services paid for by council tax rather than coming out of your car tax payment, this is because your car tax is actually an environmental tax based on your car’s CO2 emissions and simply goes into the national coffers at the exchequer to be used as they see fit. Car tax has nothing to do with road maintenance!

Who has to pay Council Tax?

Typically, anyone over the age of 18 has to pay council tax for the property they live in and a full council tax bill is normally based on at least 2 people over the age of 18 living in the property. There are, however, exemptions and discounts that can be applied to council tax bills.

Who is exempt from Council Tax?

According to the Government, the following are disregarded as far as council tax is concerned:
  • those living in the household who are under 18 years old
  • those living in the household who are on certain apprentice schemes
  • those living in the household who are 18 or 19 years old and in full-time education
  • a full-time student at college or university (course should be for at least 1 year with 21 hours of study per week as a minimum)
  • those living in the household who are under 25 years old and get funding from the Education and Skills Funding Agency
  • those living in a household who is a student nurse
  • those living in the household who is a foreign language assistant registered with the British Council
  • For those living in a household who are severely mentally impaired – this link gives more detail about exemptions and discounts for disabled people
  • those living in the household who is a live-in carer for someone who is not their partner, spouse, or child under 18
  • those living in the household who is a diplomat
Even if you are disregarded according to the rules set by the Government, the discount or exemption is not automatic and you will need to apply to the relevant local council to have your discount or exemption registered.
One point to note is that, in a lot of cases, disregarded people will merely mean that the rate of council tax payable is discounted rather than abolished completely. For example, if you live in a property where everyone is a registered full-time student, then no council tax needs to be paid, but if everyone in the property falls under a different category and is “disregarded” then you will only be entitled to a 50% reduction in council tax, for example, if someone who is severely mentally impaired is living with their carer then the 50% discount applies, even though both are disregarded.

Council Tax Reductions

Even if you are not exempt and wouldn’t qualify for a discount on your council tax bill through being disregarded, there are other circumstances that qualify for a council tax reduction. Again, you will need to apply for any reduction as these are not automatically applied.
So, what qualifies for a council tax discount?
  1. A single adult living on a property. If you are the only person over the age of 18 in the household then you could be entitled to a 25% discount on your council tax.
  2. Second Adult Rebates can be claimed if there is a second person on your property over the age of 18 but are on a low income. The size of the rebate is dependent on their individual circumstances and also the local rules set by your council.
  3. Council Tax Reduction. To qualify for a council tax reduction, you will need to be on a low income and claim certain benefits. Typically, you will need to be able to show that you have a low income and receive certain benefits such as Jobseeker’s Allowance, Pension Credit, Income Support or Employment and Support Allowance. Claiming Universal Credit does not automatically entitle you to help towards your council tax bill. As for the second adult rebate, council tax reduction rules can be set by each local council individually and you will need to talk to them to see what you might be entitled to. The rules applied will depend on whether you are working or a pensioner. To apply for a council tax reduction, you will need to go to your local council’s website, you can find that by visiting this Government website and typing your postcode into the field. This will tell you who your local council is and give you a link to their website.
  4. If you live with someone who is disabled and your home has been modified to suit the needs of that person or you live in a larger house than you would otherwise need, you might be entitled to a disabled person’s discount. If you are entitled to a discount, this will typically be in the form of a reduced banding for your property, i.e. if your property has been banded as a C then it will be reduced to a B. If you are already at the lowest band of A, you will receive a 17% reduction on your bill.
  5. Discretionary reductions can be applied in individual circumstances if you can show that you are struggling financially and cannot afford to pay council tax. You will need to contact your local council and discuss your circumstances with them.

Exempt Properties

It is not just people who are exempt from council tax or entitled to a reduction, certain properties also attract either an exemption or a discount:
  1. An empty property might be eligible for a discount, especially if it is derelict and unsafe to live in if it is being redeveloped and improved, the owner has moved into a care home or hospital, and the property has become vacant due to death or the property has been repossessed. Check with your local council as the rules vary from council to council. It is important to note that, for properties that have been empty for over 2 years, a council tax premium might be charged. You could end up paying 4x your normal council tax rate.
  2. Second homes which are not frequently occupied might also be given a discount. Again, talk to the local council as this is not guaranteed.

How much is Council Tax?

This very much depends on your personal circumstances, where you live and the property you live in. One thing that all councils have in common when calculating council tax, is that properties are banded from the lowest Band A to the highest Band H rating. What you actually pay in each of those bandings is entirely down to your local council.
So, the obvious question you will have is “what is my council tax band?”. The first thing to know is that the Banding that your property falls in is based entirely on the value that your property would have sold for on the 1st April 1991 (England and Scotland) or the 1st April 2003 (Wales) so it has very little to do with the current market value. The assessment is based on things like the size of the property, location, layout and character of the property. If you think your property has been assigned the wrong Band then you can challenge the banding of your property by submitting your challenge to the Valuation Office Agency via the Government website. You can also email them using the email address given or write to them at the address given on the website. You must continue to pay your council tax while you await the result of your challenge.

What is my Council Tax Band?

The current banding for your home can be found on the Government’s website. Simply type in your postcode, select your house number and you will be taken to the information held on your property, including the council tax band.
You now have your council tax band but how is the council tax calculated from that? Each local council will have its own charges by band and parish. The council will look at the band your property is in, relate that to the location and then determine the annual charge. A quick search on your local council website will give you a full list of individual parishes as well as the annual charge per band. Once this has been determined the council will apply any reduction that you are eligible for based on your circumstances. This will then give you the final annual bill.

How to Register for Council Tax

To register for council tax, you will need to contact your local council’s Council Tax Office or do it online. Most councils have a section on their website which allows you to inform them of either moving home within the region, moving out of the region or moving into the region. If you would prefer, you could also call the council, visit the council offices or even write to them to register yourself for council tax.

Council Tax When Moving House

Whilst we are on the subject of registering, let’s quickly look at what happens with council tax when you move house. Once you know when you are moving, you need to contact your local council. If you are moving within the same region, then they will help you to simply change your address. They will need proof of your move date and they will then send you a final bill for your old address for you to pay or provide you with a refund if it is due. You will also, within a few weeks, get a new bill for your new address. You can inform your council a month before the move and set up your new account and cancel your old council tax payments at that time. If you are moving to the same region, you should, if you pay by direct debit, be able to keep your details the same and the council will simply alter the payments once your new bill has been calculated. Remember that you become liable for council tax on your new property the day you take ownership of it or take over the tenancy and not when you actually move in.

How To Cancel Council Tax

If you are moving out of the region you will need to cancel your council tax account and pay any final balance or provide a forwarding address for a refund. Once you have paid your final bill, if you pay by direct debit, don’t forget to cancel the direct debit. You will also need to set up a new account for in your new region/council and set up a new direct debit or standing order. Don’t delay and wait for a new occupier letter to come through, as this will not reduce your payments, it will only serve to give you less time to pay the amount due. Do not, under any circumstances simply cancel your automatic payment as this will not cancel your account and could leave to open to recovery action from the council.

How to Pay Council Tax

Typically, council tax is paid monthly over 10 months rather than a full year and you don’t pay council tax in the months of February and March, but you can discuss this with your local council and extend the payments to go across the full 12 months. If you want, you can pay the entire amount upfront in one go.
There are several ways to pay your council tax. You can set up a direct debit or a standing order with the council, which will take each month’s payment automatically from your bank account; you can pay via the council’s website payment tool or via BACS transfer; you can pay in person at the council offices or over the phone using a credit or debit card; you can also pay at a post office, a Pay zone or Pay point outlet. Your council tax bill will have all the different payment options on the back.

What Happens If You Don’t Pay Council Tax

You might be wondering what happens if you don’t pay your council tax. This is not advisable. If you don’t pay a council tax demand, the council is perfectly within its rights to, after due process, take you to court. If the court decides you have no good cause for not paying the council tax bill and you continue to refuse, it can sentence you to up to 3 months in prison. Alternatively, the court could sanction the use of a bailiff to seize your property to cover the cost of the bill. Each of these options will incur more costs for you on top of the overdue council tax payments. The council can also apply to your employer for deductions from your wages to pay the council tax arrears or they can apply to have money taken directly from your benefits if you receive them. Please note that, if it comes to legal action by the council, you will lose the ability to pay the council tax bill in instalments and you’ll need to pay the entire balance in one go.
As you can see, council tax can be a complex matter and there are many different aspects which affect how much you have to pay. Suppose you have any doubt about your council tax bill. In that case, we strongly recommend that you have a conversation with your local council’s Council Tax Office so that you fully understand your situation and ensure that you are paying the right amount.

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