Introduction to Council Tax

Council tax is tax collected by a local authority throughout the UK (England, Scotland, Northern Ireland and Wales) on any domestic property. There are more than 27 million residents that are liable to pay council tax within the UK.

However, depending on their individual circumstances, some residents may be able to receive a reduction on their council tax bill or be exempt altogether. The money raised from council tax payers goes towards services within the public sector, such as education, police, cleaning, and fire services etc. The idea behind this is that anyone living within a community across the UK will be contributing to fund the requirements of that community. It is also estimated that council tax accounts for 25% of all local government expenditure.

If you’re struggling with council tax debt or you’ve been threatened with bailiff action and need help setting up an affordable and sustainable repayment plan, the experts at Refresh Debt Services will be happy to help.

Call 0800 121 48 63 or complete the online form on this page to request a call-back.

Council tax liability and rights

Not everyone is aware how council tax rules and exemptions are set when making their contribution. Council tax was introduced by the Local Government Finance Act of 1992 in 1993. It replaced the previous Community Charge. The tax is calculated by looking at the market value of a property.

Your local council will inform you on how much you have to pay for each tax year (April to March). As a general rule, it is calculated by looking at your property banding, as well as how much money a local authority will have to raise each year to cover service costs. It is worth noting that in some scenarios, some residents may be exempt from paying council tax. These include the following:
• If the property is only occupied by residents who are under 18 years old
• If the property is only occupied by full-time students
• Accommodation for armed force members
• If the property is unoccupied due to structural alteration or major repair work
• If the property is unoccupied after someone on the estate has passed away (limitations apply)
• If the property is unoccupied due to being repossessed by a bank or liable trustee through bankruptcy proceedings

Council tax spending is calculated by how much is received by a local authority. Yearly increases are often a result of budget cuts and the increasing costs to maintain a high level of service throughout the community. As an example, if the UK Government reduces spending for public sector areas such as education, policing or the NHS, local councils will have to find ways to raise money for this deficit. If they’re unable to raise the extra funding, service level agreements will either have to be reduced or shut down entirely in some areas.

Generated revenue from council tax will also look to cover the costs of school funding, libraries, leisure centres, refuse and recycling collection.

Call 0800 121 48 63 to speak to a specialist advisor today or request a call-back by completing the form to the right.

How does council tax banding work?

The council tax band of your property will determine how much you will have to pay each year. Council tax ranges from Band A to Band H in England and Wales. The following criteria may be used to assess your council tax banding:
• Location
• Valuation (on a specific date)
• Size of the property
• Layout
• Change in use (if applicable)

Here’s a general guide to how much council tax you would have to pay for each corresponding band:

EnglandThe price the property would have sold for in April 1991
• Band A – Up to £40,000
• Band B – £40,001 to £52,000
• Band C – £52,001 to £68,000
• Band D – £68,001 to £88,000
• Band E – £88,001 to £120,000
• Band F – £120,001 to £160,000
• Band G – £160,001 to £320,000
• Band H – More than £320,000

ScotlandThe price the property would have sold for in April 1991
• Band A – Up to £27,000
• Band B – £27,001 to £35,000
• Band C – £35,001 to £45,000
• Band D – £45,001 to £58,000
• Band E – £58,001 to £80,000
• Band F – £80,001 to £106,000
• Band G – £106,001 to £212,000
• Band H – More than £212,000

Wales – The price the property would have sold for in April 2003
• Band A – Up to £44,000
• Band B – £44,001 to £65,000
• Band C – £65,001 to £91,000
• Band D – £91,001 to £123,000
• Band E – £123,001 to £162,000
• Band F – £162,001 to £223,000
• Band G – £223,001 to £324,000
• Band H – £324,001 to £424,000
• Band I – More than £424,000

Northern IrelandMultiply property value by domestic rate poundage (DRP) for your local authority
Antrim and Newtownabbey Council – DRP = 0.007634
Ards and North Down Borough Council – DRP = 0.007256
Armagh City, Banbridge and Craigavon Borough Council – DRP = 0.008285
Belfast City Council – DRP = 0.007376
Causeway Coast and Glens – DRP = 0.007745
Derry City and Strabane District Council – DRP = 0.008724
Fermanagh and Omagh Council – DRP = 0.007564
Lisburn and Castlereagh Council – DRP = 0.007062
Mid and East Antrim Council – DRP = 0.008269
Mid Ulster Council – DRP = 0.007303
Newry, Mourne and Down Council – DRP = 0.007869

We realise these figures aren’t 100% up to date, this is why we recommend visiting your local authority’s website directly for all the latest figures.

Speak to a specialist advisor today on 0800 121 48 63 or complete the form to request a call-back.

Council Tax Liability Hierarchy

For each UK household, there will likely be at least one person who is liable to pay council tax. This could be the home owner, tenant or between a couple/group of people (categorised as severally liable). Please see above for a list of exemptions. In some scenarios, tenants may not be liable, these include, but are not limited to: property is shared by residents under the age of 18, student accommodation, buildings that provide asylum (care homes, hospitals, and accommodation for asylum seekers). In these examples, the owner(s) will have to pay the council tax.

If you’re over the age of 18, and live in a property on your own, this is referred to as ‘single occupancy’. You will be eligible for a single person’s discount.

If there is more than one person living in the property, the liability hierarchy system will apply. This is used to identify who should be addressed when a bill is sent to the property in question. The individual who is higher up within the hierarchy will assume liability.

1. Resident owner or occupier who holds the leasehold/freehold for all or part of the property
2. Resident tenant who is above licensee residents, licensee residents aren’t considered to be tenants, they only have permission to stay
3. Residents considered to be squatters
4. Owner of the property that does not occupy or reside in the property
5. Residents under the age of 18, students and other exempt people (see above). Although they’re included within the hierarchy, they are not liable for council tax, at this point, the bill should be forwarded to the property owner (see number 4)

The circumstances of each property owner or resident may also be taken into consideration. This is to assist those who are unable to pay the council tax in full. These are referred to as council tax reductions and exemptions.

Council Tax Discounts and Exemptions

The financial situation of any individual could change at any moment. If you’re unable to pay your council tax, it’s worth contacting your local authority to see if you’re eligible for a reduction through a discount. In most cases, reductions and exemptions aren’t always publicised.

A new system for council tax reductions was introduced by the UK Government in April 2013. These discounts are available to households in England, Scotland and Wales that meet specific criteria. Northern Ireland applies an alternative tax assistance scheme for eligible households. The following areas are evaluated when calculating any potential reduction or exemption for council tax:
• Income (e.g. low income and/or in receipt of benefits)
• Location
• Disability
• Number of dependents
• Sole occupancy

Need more advice?

If you need help with council tax arrears or you’ve facing enforcement action. We can help you stop bailiff action and set up an affordable and sustainable repayment plan.

Call 0800 121 48 63 or complete the online form on this page to request a call-back.