Council Tax is a local tax on residential properties throughout England, Scotland and Wales. It helps councils fund a wide range of essential services, such as:
- Rubbish collection
- Street lighting
- Recycling services
- Road maintenance
- Local schools
- Libraries
- Public parks
- Police and Fire services
In short, this tax helps ensure that areas such as counties or districts, remain functional and that public services continue to operate for residents.
Who Pays Council Tax?
Most people aged 18 or older who live in a property as their main home are responsible for paying Council Tax. This rule applies to both homeowners and tenants. If you rent, you will usually be the one paying the Council Tax unless your tenancy agreement states that your landlord is responsible, which is uncommon but does occur.
If several adults live in the same home, they are jointly and severally liable. This means the Council can recover the full amount from any of the adults. However, some residents may be “disregarded” for Council Tax purposes. These include:
- Full-time students
- Apprentices (only if they meet approved apprenticeship criteria)
- Live-in carers (cannot be the spouse or partner, must provide at least 35 hours of care a week, the client must be in receipt of qualifying disability benefits)
- People with severe mental impairment
In such cases, discounts or exemptions may apply.
Council Tax Calculation and Council Tax Bands
Council Tax is based on the following three things:
- The valuation band of your property
- The rate set by your local council
- Any discounts or exemptions you qualify for
All properties fall into bands based on their estimate market value on a specific date. In England and Scotland, this date is 1st April 1991. In Wales, it is 1st April 2003.
The Council Tax bands in England are as follows:
- 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 – Over £320,000
Local councils set an annual rate for Band D properties. They calculate charges for other bands as a proportion of the Band D rate.
For example: A council will charge Band A properties around two-thirds of the Band D rate, while charging double for Band H properties.
The total bill also depends on your property’s location, its size and features. It also includes precepts for police, fire and sometimes parish/community councils. These are not optional extras but part of the legally set charge.
Available Discounts and Exemptions
Not everyone pays the full amount of Council Tax. Several discounts and exemptions are available:
- Single Person Discount – You can claim a 25% reduction if you live alone or are the only counted adult
- Student Exemption – Your property is exempt if everyone in your home is a full-time student
- Severe Medical Impairment – The property may receive a discount or full exemption if someone qualifies medically and receives certain benefits
- Live-In Carers – Councils may disregard Council Tax if someone is a live-in carer (not a spouse or partner)
You may also qualify for the Disabled Band Reduction Scheme. If your property has been adapted for a disabled resident, such as extra rooms or wheelchair space, your bill could be charged at one band lower. If your home is already in Band A, councils apply a fixed percentage reduction equivalent to the difference between Band A and what a lower band would be.
Certain properties are completely exempt from Council Tax. These include homes that are empty because the resident is in hospital, a care home or prison. Student halls of residence and properties occupied only by people under 18 are also exempt.
Second Homes and Empty Properties
If you own a second home, you will usually have to pay Council Tax on it. These homes are typically furnished but not used as a main residence. Local councils can offer discounts, but many now apply a premium or no discount at all.
Empty homes are also subject to Council Tax. Councils may apply premiums on long-term empty properties, increasing the bill by 100% or more, with some charging up to 300% for homes empty over 10 years. These premiums vary by council.
There are exceptions. Homes undergoing major repairs, properties in probate or those up for sale or rent may be eligible for relief. Time limits and rules vary locally.
How to Pay Your Council Tax
Paying Council Tax is simple. Most councils offer several payment methods:
- Direct Debit (the most popular and hassle-free option)
- Online payments via your council’s secure website
- Phone payments using a debit or credit card
- Bank transfers or standing orders set up through your bank
- In-person payments at local Post Offices or PayPoint locations
Most councils offer 10 monthly instalments from April to January, but you can usually request 12 to spread the cost evenly over the year.
If You Cannot Afford to Pay
If you are struggling to pay your Council Tax bill, you must contact your local council to discuss your options. They may be able to arrange a more manageable payment plan.
You may also qualify for Council Tax Reduction (also called Council Tax Support) if you have a low income. This benefit varies by local council and is based on your household income, savings and who lives with you. In some cases, your bill could reduce to zero.
Unpaid bills can lead to legal action, court fees and even enforcement visits.
How to Check or Challenge Your Band
You can ask the Valuation Office Agency for a review if you think your property is in the wrong band.
Before you apply, compare your home with similar ones in your area. If you find a large difference in bands, collect evidence such as sale prices or layout changes. Then, submit a request to the Valuation Office Agency.
You can also request a valuation if your property has undergone major changes, such as building an extension. Be aware that your band could go up instead of down, depending on the outcome.
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This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK tax laws and regulations are subject to change. Please speak to an accountant or tax professional for advice tailored to your individual circumstances. Pi Accountancy accepts no responsibility for any issues arising from reliance on the information provided.