How Is Council Tax Calculated?



Find out how council tax is calculated

How Is Council Tax Calculated?

Find out how your council tax is worked out

With the exception of Northern Ireland (which still uses the old system of domestic rates), everyone in Great Britain is liable for Council Tax – whether they are a homeowner or living in rented property. Tenants in the private rented sector may find that their landlord pays the Council Tax on their behalf. However, if this is the case, it will be mentioned in the terms and conditions of their tenancy agreement. Usually tenants are directly liable for their own council taxes regarding the property they rent.

The factors which local councils use to calculate Council Tax are:

  • The evaluation tax band that the property falls into (depending on property price)
  • The members of the household (how many, age, whether they are in full-time education, etc.)
  • How much funding your council needs to operate efficiently.

Let’s look at these factors separately.

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Factors used to calculate Council Tax

Your Council Tax Band

Wherever you live in Great Britain, your tax band depends on the value of your property at a certain time in the past (not its current value). Evaluators consider property type, layout, age and condition to arrive at a number. The higher the value of your property, the higher your Council Tax bill will be.

In England, there are eight property tax bands which go from the cheapest A (for properties valued at up to £40,000 according to April 1991 property prices) up to H (for properties worth over £320,000).

Scotland also has eight bands, but the corresponding value of properties is different to England. Band A starts at residential properties valued at £27,000 in 1991 while Band H is for houses worth £212,000 or more.

Wales has nine tax bands rather than eight and reviewed its tax bands more recently than England and Scotland, so its evaluation is based on April 2003 property prices. Its lowest Council Tax band starts at houses worth £44,000 while its highest band is for properties worth £424,000 or more.

Property Resources
Government information about council tax
Council tax in Scotland
Council tax for Wales

The members of your household

Council Tax is calculated according to two adults sharing a home. However, this is not always the case. If you live alone or with minors, then you will be entitled to a single-person discount which will reduce your Council Tax by 25%.

You may also be entitled to a discount if you are living with people with special needs, who are in full-time education or if one member of the household is a full-time carer.

Low-income households may also be entitled to a discount or may even be exempt from paying any tax at all. The criteria for exemption vary from council to council, but they will take into account your income, any savings and the number of members in the household to calculate how much tax you should be paying.

Council Tax Questions

What is the money from Council Tax used for?

The money collected from Council Tax is used to provide essential services for the inhabitants of a town or city. These services include rubbish disposal and collection, the emergency services, libraries, leisure facilities such as parks and local transport. Council Tax fees are used to supplement the funding which local authorities receive from central government. The money is not used for health services which comes out of a separate funds.

What happens if I do not pay my Council Tax?

If you cannot pay an instalment of your Council Tax, you should contact your local council as soon as possible as this can have very serious consequences for you. If payment is not made, then you will receive a reminder. If it remains unpaid after 7 days or it is the third time you have gone into arrears, you will receive a final notice to pay the amount in full within 7 days. After this period, the council can request a ‘liability order’ from the court which allows your Council Tax bill to be deducted from your earnings or state benefits. Councils also have the right to send in bailiffs to recoup the amount you owe by seizing possessions and in some parts of England, non-payment of Council Tax can even result in a prison sentence.

Do I have to pay Council Tax on an empty property?

No. If you have unfurnished vacant property, you might be entitled to a discount of 50%-100% on your Council Tax bill. However, bearing in mind the housing shortage in the private rented sector in the UK, you may also be penalised if your property is left empty for long periods. In Scotland, you will have to pay a 100% premium if the home is empty for longer than 12 months. In England and Wales, you pay the penalty after 2 years. From April 2020, the penalty will rise to 200% if the property is uninhabited for 5 years or more while in 2021, the premium will go up to 300% for properties which have been left empty for 10 years or longer.


How much funding your council needs


The amount of funding that your council needs to top up funds from central government depends on the demographics of your town or city. Neighbourhoods with deprived areas will need more local funding while councils with lots of businesses can often get a lot of their funding through business rates.

3 tips to reduce your Council Tax

1. Check your Council Tax band

It has been estimated that 400,000 homes in England and Wales have been placed in the wrong tax band. If you think you are paying too much, contact the VOA (Valuation Office Agency) and ask them to re-evaluate your home. If they do not change the tax band, you have the right to appeal through the Valuation Tribunal.

2. Check eligibility for Council Tax discounts

If you believe that you are paying Council Tax for household members who are entitled to a discount or are exempt, you should contact the Housing Department of your local council. You may be expected to provide proof of low income, disability, etc.

3. Check eligibility for hardship relief

If you are having unexpected financial difficulties as the result of something like a redundancy, you may be entitled to a discount or exemption from Council Tax. Provision for hardship funds is discretionary and varies from council to council.

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