New government proposals could see some councils significantly hike up their tax bills
Councils across the country may soon increase bills for local residents, but you may be able to dodge the rise.
It comes after Deputy Prime Minister Angela Rayner explained proposals that would redistribute government funds to the local councils that are at the highest disadvantage. The government claims this would allow councils to have enough funds to pay for services.
However, a report from the Institute for Fiscal Studies (IFS) notes that significant changes to the system could result in a number of council not having enough cash, potentially leading to an increase in council tax. According to the IFS, around 186 councils will see funding reduced by £2.1 billion altogether if the proposals are implemented.
A spokesperson for the Ministry of Housing, Communities and Local Government said: “The current, outdated way in which local authorities are funded means the link between funding and need for services has broken down, leaving communities left behind.
“That’s why we are taking decisive action to reform the funding system so we can get councils back on their feet and improve public services, with the IFS recognising that our changes will better align funding with councils’ needs.”
Despite this, people throughout the UK could be eligible for a significant discount or even a complete exemption on their council tax bill, depending on their circumstances. This means that if any proposals are implemented that would see a rise in council tax for some areas, the extra costs could be avoided completely.
Council Tax exemptions
Those with low incomes, student households, and people with disabilities or caring responsibilities may not realise that they don’t have to pay the full amount of their council tax bill. In England alone, over 2.5 million people receive a discount on their council tax.
There are numerous situations that could enable you to claim a Council Tax Reduction. Full details on eligibility can be found on GOV.UK.
You might be exempt from paying Council Tax if the following apply to you:
- Your home is unoccupied and empty (up to six months) – for example, if you’ve gone into hospital
- You have a severe mental impairment (e.g. dementia) – if you only live with someone who has dementia, then you’ll be treated as a sole occupant as they will be disregarded, but you won’t both be exempt
- You are a full-time student
- You live in a care home or hospital
Exemptions and discounts can vary based on your local authority’s rules. It might be worth contacting your local authority to check your eligibility and learn how to apply for an exemption.
Council tax discounts
There are certain scenarios where you may be entitled to a reduction on your Council Tax, with the amount of discount varying depending on your situation.
If you live with someone under 18 or a student
If you’re residing with someone under 18 or a student, Council Tax isn’t calculated for anyone aged under 18, full-time students, student nurses, and some apprentices or trainees.
If you are a carer
If you’re a carer, those who provide care for someone in the household for at least 35 hours per week and meet additional criteria may be exempt from Council Tax. You should contact your local authority to understand their eligibility criteria.
However, this exemption does not apply if the person receiving care is the carer’s partner or a child of the carer under 18 years old.
Applying for a Council Tax Reduction
If you’re on a low income or receiving certain benefits, applying for a Council Tax Reduction could be an option. You can claim Council Tax support whether you own or rent your home, and irrespective of your employment status.
Each local council operates its own Council Tax support scheme, so the level of assistance varies across the country.
The support you receive depends on several factors, including the benefits you receive, your age, income, savings, who you live with, and how much council tax you pay. If you’re receiving a disability or carers benefit, you may be eligible for additional Council Tax support.
Those receiving the Guarantee Credit Part of Pension Credit might even have their Council Tax fully covered. Even without this, if you’re on a low income and have less than £16,000 in savings, you could still receive some help.