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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.
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.
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|
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.
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:
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:
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:
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.
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:
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:
Your local authority will look into the second adult's income, and the lower their income, the higher the rebate.
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:
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:
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.
Nothing in this guide is intended to constitute legal advice and you are strongly advised to seek independent advice on matters that affect you.