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Council Tax - Complete UK Guide

Council tax is something that most people will be familiar with. It regularly features in the news as governments do, from time to time, change the amount of money that is liable for Council tax. The problem however is that the rules governing Council tax can be difficult to understand.

This guide sets out in detail everything that you need to know about Council tax.




What is Council tax?

Council tax is tax that is applied by your local authority or city council. It is a tax that is payable on the property that you live in.

How is Council tax calculated?

Your home and everyone else's will be given a valuation banding by the Valuation Office Agency (VOA), based on the value of your property on 1 April 1991. The particular banding that your property is given will determine how much tax council tax you will be liable to pay. This information will be retained by your local authority in what is known as a 'valuation list'.

The different valuations bands are as follows:

Valuation band Value of property
A Up to £40,000
B Between £40,000 and £52,000
C Between £52,000 and £68,000
D Between £68,000 and £88,000
E Between £88,000 and £120,000
F Between £120,000 and £160,000
G Between £160,000 and £320,000
H Above £320,000


It is impossible to give an account of every different rate of council tax, as each local authority in the UK will set a new rate of council tax for each valuation band every year.

Who has to pay council tax?

It may sound obvious but the person that is living in a property will be responsible for paying council tax. They will be called the 'liable person'. If however you are living in a property as a couple and are married, cohabiting or are in a civil partnership then you will be both responsible for payment of Council tax. The situation becomes slightly more complicated where there are more people living in one property. In these situations there is a ranking of who will be responsible for payment of Council tax, known as the hierarchy of liability. The hierarchy for payment of Council tax is as follows:

  1. The owner-occupier of the property;
  2. A tenant who is living in the property;
  3. A resident who lives in the property but is a licensee – this is someone that is not technically a tenant but does have persmission to live in the property;
  4. Any person living in the property – at this point, where a squatter is living in the property, they will be deemed liable for any outstanding Council tax; and
  5. The owner of a property where no one is currently living.

Are there any exemptions?

It is important to understand that there are certain exemptions and discounts available for council tax. However your ability to make use of these depends on your particular circumstances.

1. People living with a disability

If you live, or there is someone living in the same property as you, that has a significant or permanent disability then it is possible for the Council tax bill to be reduced. The reduction works in such a way that your property will be charged at a lower valuation band than the one your property is in. In order to take advantage of this facility, you must be able to demonstrate that:

  1. A disabled person is living in the property; and
  2. The property has at least one of the following rooms:
    1. An additional bathroom or kitchen to cater for the needs of the disabled person;
    2. Any other room (other than a toilet) that is primarily used to meet the needs of the disabled person; or
    3. Sufficient indoor space that allows the disabled person to make use of their wheelchair (if they have one).

The decision to grant this reduction in Council tax lies with your local authority. They will need you to fill out an application form, and may also require supporting evidence to support your seeking a reduction in council tax e.g. photographic evidence, letter from your GP etc.

2. Someone lives in a property alone

Where only one adult lives in a property, then will be entitled to a 25% reduction (discount) in their council tax bill. This is a very important relief from Council Tax, for when the local authority is working out how many people live in a property, certain people will not be counted. These people are known as 'disregarded people'. You will be 'disregarded' or 'not counted' if you are:

  1. 17 years old or under;
  2. Someone that is 'severely mentally impaired'
  3. Full-time students on a qualifying education course
    1. It is important to be aware that if everyone living in the property is a student, then the property is completely exempt from council tax.
  4. A patient that is undergoing long-term hospital treatment or is a resident of a care home;
  5. A member of a religious community e.g. priest
  6. A young person that is currently engaged on a Government training scheme or an apprenticeship;
  7. A live-in care worker; or
  8. The spouse, partner or dependant of someone who is a non-British resident student who is not allowed to work in the UK or claim benefits.

The list of people that will be disregarded is quite extensive. In reality a lot of people will be able to enjoy a reduction of their council tax. It is not uncommon that you may find that where more than one person is living in a property, everyone may be a 'disregarded' person. In those circumstances, you will be entitled to a 50% reduction in your council tax bill. As mentioned earlier this does not apply to students – properties housing only students are exempt from council tax.

Can I reduce my Council tax?

Notwithstanding the exemptions that are available, it might be possible for you to apply to your local authority to reduce your Council tax liability. This is possible via an application for a Council Tax Reduction or 'CTR'. There are certain eligibility criteria that you will need to meet before you can apply for a CTR:

  1. You are on a low income;
  2. You live in the property that you are applying for CRT for; and
  3. You are the 'liable person' for payment of Council tax.

You should keep in mind however that other things may be taken into consideration before you will be granted the CTR. Your local authority is unlikely to grant your application if there is evidence that you already have substantial capital (savings or property).

If indeed you are deemed to have too much capital, you might consider applying for the Second Adult Rebate. This will only be available where you have a second adult living with you. However this person must, amongst other things:

  • Not be your spouse, partner or civil partner;
  • Not have to pay rent;
  • Be over 18; and
  • Not be a joint owner/ tenant of the property.

Your local authority will look into the second adult's income, and the lower their income, the higher the rebate.

What happens if I owe Council tax?

It is not uncommon that council tax payments may be missed on the dates that they become due. In these situations, the local authority is obliged to follow a set procedure:

  1. In the first instance of your missing a payment the local authority must issue you with a reminder, asking you to make payment of your outstanding Council tax within seven days;
  2. If you do not make the payment within seven days, you will lose the right to pay council tax by instalments (as you would do every month), and may be compelled to pay the entire years council tax bill;
  3. If you fail to pay within the next seven days then your local authority has the right to ask a court to issue a liability order. If granted this allows the local authority to arrange for your outstanding Council tax payments (arrears) to be paid by deductions from any benefits that you receive being made. Alternatively, your local authority may instruct court officers to seek payment of your council tax by taking possession of your property to the value of your outstanding liability.

The situation facing you if you have been approached by court officers seeking to take possession of property you own, in satisfaction of your outstanding council tax depends where you are in the UK:

  1. In England and Wales – a bailiff will normally, in the first instance, provide notice to you that they have been instructed to take possession of your property in payment of your outstanding council tax – this will also include the action that you can take to stop their taking your property i.e. negotiating directly with your local authority. Seven days following your being provided with a notice, bailiffs will come to your home with evidence i.e. a letter from your local authority, entitling them to come into your property and take possession of your property.
  2. In Scotland – in principle a Sheriff Officer can take the same action as their English or Welsh counterpart. However in practice it is quite rare that they will come into your home and take possession of your property for repayment of Council tax. Before they are able to do so, the local authority must be able to prove to the court that it has taken some steps to help you to make payment of your outstanding tax liability. It is only after this that they can, providing they have the necessary paperwork, use reasonable force to enter your property and take your possessions. This is called 'exceptional attachment'. In most cases a Sheriff Officer will provide you with some notice that they are coming to you to collect property. It is very important to understand that in order for Sheriff Officers to seize your property, there must be someone in your property who is at least 16 years old and understands what is going on.

It is important to understand that local authorities have a significant amount of freedom to decide how they will collect your outstanding council tax liability. In most cases, they will seek to avoid the use of enforcement bodies where possible.

In the first instance when you receive notification that enforcement action is being taken against you for payment of your outstanding council tax, you should contact either the Bailiffs or the Sheriff Officer, and see if it will be possible to come to some kind of arrangement for repayment. It is important that, if possible, you come to an arrangement that you can honour – even if this involves paying relatively small amounts of money over a longer period of time. The presence of large gaps between payments may mean there will be less likelihood of reaching agreement on this.

Key Points

  • Council tax is a tax on domestic property.
  • The amount of council tax depends on the valuation banding given to your property, and the rate of council tax decided by your local authority for that banding.
  • Not everyone is required to pay council tax.
  • If you fail to pay Council tax on time, the local authority will take steps to secure payment.
  • Local authorities have a great deal of freedom in deciding how best to secure payment of outstanding taxes – it is important to engage with them.

Nothing in this guide is intended to constitute legal advice and you are strongly advised to seek independent advice on matters that affect you.

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Last Updated

Thursday, 11 June 2015


Tax Law