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17 November 2021 12:00 AM

Council tax

17 November 2021

How does council tax work in England?

Local government is financed by a combination of centrally-administered funding and locally-administered taxes. The most significant of these local taxes is council tax, which is charged on domestic properties.

Council tax combines elements of both its predecessors: the property-based rates system which existed until 1990, and the ‘poll tax’ on individuals that was introduced briefly in the late 1980s.

Rates of council tax are determined by an individual’s property value, personal circumstances, and how much funding is required by the local council (coupled with how much has been allocated by central government). People pay the fee related to the band in which their residence falls.

Everyone over the age of 18, who rents or owns a property, is liable to pay council tax. A council tax bill is based on two cohabitating adults. Spouses and partners who live together are jointly liable for the payments.

Council Tax

Council Tax bands have remained unchanged since 1991, something which has benefited those in South West London where house prices have rocketed.

Discounts and Exemptions
Adults receive a 25% reduction in council tax if they living alone, or if no one else in the property counts as an adult. A 50% council tax discount is granted if no one living in the home counts as an adult.

Full-time students and student nurses are not liable to pay council tax. Neither are people with severe mental health impairments, or live-in carers of no relation to their patient. Further exemptions apply to prisoners or people awaiting deportation, a member of a visiting armed forces, and foreign diplomats.

Those living on a low income or in receipt of state benefits may be eligible for Council Tax Reduction (previously known as Council Tax Benefit).

How Council Tax is paid
Council tax payments are split into 10 monthly instalments. Payments are generally made by setting up a direct debit or standing order. The tax can also be paid online, over the phone by a debit card or credit card, or by sending cheques in the post. More recently, ‘Paypoint’, ‘Payzone’ or ‘Quickcards’ are used for cash payments at post offices, banks, newsagents and convenience stores.

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