Council Tax: Bills are about to rise by nearly four percent – how much will this cost you?

How is Council Tax calculated?

Council tax calculations are focused entirely around the band system. The tax paid is calculated based on the value of the person’s property at a specific point in time. In England, it is based on what the value of the property would have been on 1 April 1991. The bands are calculated using other methods in Scotland, Wales and Northern Ireland. It is possible to get a council tax reduction if a person is on a low income or receives benefits. Challenges can also be made if an individual thinks that their home is in the wrong valuation band.


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There are currently eight bands in England which are categorised by ranges of value for properties.

The lowest value goes up to £40,000 and the highest exceeds £320,000. There is similar band systems in the rest of the UK with slight variations on values.

A recent report from the County Councils Network, a cross-party special interest group of local authorities, revealed that there is currently a large funding problem with council tax across the UK.

How are council tax bills changing?

Analysis carried out by the organisation revealed that local authorises face a funding shortfall of more than £19 billion over the next five years.

This deficit will likely occur despite the government providing councils with the “largest real-terms funding increase in a decade”.

This £19 billion deficit is based on forecasts of councils raising tax bills by 3.99 percent (the maximum allowed) for next year and then 1.99 percent for the following four years.

While this is currently just a forecast, the outcome is likely to follow this prediction.

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Councils across the UK are currently finalising their budgets for the coming financial year and 133 councils thus far have published their plans, there are still 18 councils who haven’t declared their intentions.

Analysis of the published announcements reveals that the vast majority of councils plan to raise their bills by the maximum allowed.

116 councils so far have acknowledged that they will raise council tax by 3.99 percent.

While council tax bills will vary across the country, it is possible to gauge how much this will cost in monetary terms by looking at the averages.


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Residents in inner London will see an average rise of £45, with taxpayers in county areas paying nearly £70 more.

The County Councils Network detail that people living in shire counties will be hit particularly hard.

Rises here are likely to be around £1,853, which is roughly 40 percent higher than inner London. Councils process their budgets in February and the new council tax rates are introduced in April.

Council leaders have detailed that they “do not have a choice” with these raises as they face funding and deficit problems. With these coming changes it is important to know how properties are evaluated and what may trigger a new revaluation. 

What triggers revaluations and applicable discounts?

The government detail the the following refurbishments or changes in circumstances will affect tax bands:

  • Part of the property is demolished and it is not rebuilt
  • Alterations are made to the property to create 2 or more self-contained units, for example an annexe – each unit will have its own band
  • A person splits a single property into self-contained flats
  • A person converts flats into a single property
  • The person starts or stops working from home
  • Previous owners made changes to the property
  • There are significant changes to the local area, like a new road being built
  • A similar property in the area has its Council Tax band changed

There is a Valuation Office Agency (VOA) in place who can provide information on if any changes to a property will affect a tax band. The government also provides a council tax band tool which allows users to find out the band for their local area. To use this tool, a postcode will need to be entered. Once this is done, all the addresses for that postcode will be details with their current council tax band. There will also be a local authority reference number for the addresses which should help if a person wishes to enquire further about their options.

Most people will have to pay council tax but there are some exceptions and discounts in place. Any adult over 18 years of age will have to pay council tax on their home but 25 percent can be taken off the bill if the occupant lives alone or no-one else in the home counts as an adult. This discount can be as high as 50 percent if the occupant does not count as an adult. Discounts are also available for full-time students and disabled people. Reductions in council tax bills can also be requested if there is low income within the household or if benefits are being received. If reductions are offered they will vary by individual councils and specific circumstances.

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