Everything You Need to Know About Council Tax

Council Tax is something that we all must pay, but there is so much to it than getting an annual bill from the Council and making sure you pay it on time. For this week’s Top Tip Tuesday, we will be investigating everything everything you need to know about Council Tax, what it is, who it applies to, what the bands mean and exemptions/reductions.

What is Council Tax and what does Council Tax pay for?

Council Tax is a charge imposed by your local Council to pay towards the services that the Council provides such as libraries, refuse collection, police and fire service, street lighting, street cleaning and road maintenance.

FUN FACT – Road maintenance falls under services paid for by Council Tax because your Car Tax is an environmental tax based on the vehicle’s CO2 emissions and goes into the national coffers to be used as the government see fit.

Who must pay Council Tax?

Usually, anyone aged over 18 must pay Council Tax for the property they live in, and a full Council Tax bill is normally based on at least 2 people aged over 18 living in the property. However, there are some exemptions and discounts that can be applied to Council Tax bills.

Who is exempt from Council Tax?

According to the Government, the following individuals are disregarded as far as Council Tax is concerned:

  • Those living in the property that are under the age of 18.
  • Those living in the property who are on particular apprenticeship schemes.
  • Those living in the household who are 18 or 19 years old and in full-time education.
  • A full-time student at college or university (course should be for at least 1 year with 21 hours study per week as a minimum).
  • Those living in the property that under the age of 25 and are getting funding from the Education and Skills Funding Agency.
  • Those living in the property who are a student nurse.
  • Those living in the property who are a foreign language assistant registered with the British Council.
  • Those living in the property that are severely mentally impaired.
  • Those living in the property who are a live-in carer for someone who is not their partner, spouse, or child under 18.
  • Those living in the property who area a diplomat.

Even if you are disregarded according to the rules set by the Government, the discount or exemption is not automatic, and you will need to apply to the relevant local Council to have your discount or exemption registered.

In many cases, disregarded people will merely mean that the rate of Council Tax payable is discounted rather than abolished completely. For example, if you live in a property where everyone is registered as a full-time student, then no Council Tax will need to be paid. However, if everyone falls under the category and is “disregarded” then you will be entitled to a 50% reduction in Council Tax. For example, if someone who is severely mentally impaired is living with their carer, then the 50% discount applies, even though both are disregarded.

Council Tax reductions

Even if you are not exempt and would not qualify for a discount on your Council Tax bill through being disregarded, there are other circumstances that qualify for a Council Tax reduction. Again, you will need to apply for any reductions as these are not automatically applied.

So, what qualifies for a Council Tax discount?

  • A single adult living in a property. If you are the only person over the age of 18 in the property, then you could be entitled to a 25% discount on your Council Tax.
  • Second Adult Rebates can be claimed if there is a second person in your property over the age of 18, but they are on a low income. The size of the rebate is dependent on their individual circumstances and the local rules set by the Council.
  • Council Tax Reduction. To qualify for a Council Tax reduction, you will need to be on a low income and claiming certain benefits. Typically, you will need to be able to show that you have a low income and receive certain benefits such as Jobseeker’s Allowance, Pension Credit, Income Support or Employment and Support Allowance. Claiming Universal Credit does not automatically entitle an individual to help towards their Council Tax bills. As for the second adult rebate, Council Tax reduction rules can be set by each local Council individually and you will need to talk to them to see what you might be entitled to. The rules applied will depend on whether you are working or a pensioner. To apply for a Council Tax reduction, you will need to go to your local Council’s website.
  • If you live with someone who is disabled and your home has been modified to suit the needs of that person or live in a larger property than you would otherwise need, you may be entitled to a disabled person’s discount. If you are entitled to a discount, this will typically be in the form of a reduced banding for your property. For example, if your property has been banded as a C, then it will be reduced to a B. If you are already at the lowest band of A, you will receive a 17% reduction on your bill.
  • Discretionary reductions can be applied in individual circumstances if you can show that you are struggling financially and cannot afford to pay Council Tax. You will need to contact your local Council and discuss your circumstances with them.

Exempt properties

It is not just people that can be qualified from Council Tax exemptions or reductions, certain properties can also be entitled to either an exemption or discount too:

  • An empty property might be eligible for a discount, especially if it is derelict and unsafe to live in, if it is being redeveloped and improved, the owner has moved into a care home or hospital, the property has become vacant due to a death or the property has been repossessed. Check with your local Council as the rules vary between different Council’s. It is important to note that, for properties that have been empty for over 2 years, a Council Tax premium might be charged. You could end up paying 4 times your normal Council Tax rate.
  • Second homes which are not frequently occupied, might also be given a discount. Again, you should talk to your local Council as this is not guaranteed.

How much is Council Tax?

This very much depends on your personal circumstances, where you live and the property you live in. One thing that all Councils have in common when calculating Council Tax, is that the properties are banded from the lowest Band A to the highest Band H Rating. What you actually pay in each of those bandings is entirely down to your local Council.

So, the obvious question you will have is “what is my Council Tax band?”. The first thing to know is that the Banding that your property falls under is based entirely on the value that your property would have sold for on the 1st April 1991 (England and Scotland) so it has very little to do with the current market value. The assessment is based on things like the size of the property, location, layout, and character of the property. If you think your property has been assigned the wrong Band, then you can challenge the banding of your property by submitting your challenge to the Valuation Office Agency via the Government website. You can also email them using the email address given or write to them at the address given on the website. You must continue to pay your Council Tax while you await the result of your challenge.

What is my Council Tax Band?

The current banding for your home can be found on the Government’s website.

See below the current Council Tax bands in Derby:

Valuation BandCouncil Tax 2022/23
Band A£1,273.57
Band B£1,485.85
Band C£1,698.10
Band D£1,910.37
Band E£2,334.89
Band F£2,759.42
Band G£3,183.94
Band H£3,820.74
Current Council Tax Bands for 2022/2023

How to register for Council Tax

To register for Council Tax, you will need to contact your local Council’s Council Tax Office or do it online. Most Councils have a section on their website which allows you to inform them of either moving home within the region, moving out of the region, or moving into the region. If you would prefer, you could also call the Council, visit the Council offices, or even write to them to register yourself for Council Tax.

Council Tax when moving house

Whilst we are on the topic of registering, let’s look at what happens with Council Tax when you move properties. Once you know when you are moving, you need to contact your local Council. If you are moving within the same region, then they will help you to simply change your address.

They will need proof of your move date and they will then send you a final bill for your old address for you to pay or provide you with a refund if it is due. You will also, within a few weeks, get a new bill for your new address.

You can inform your Council a month before the move and set up your new account and cancel your old Council Tax payments at that time.

If you are moving in the same region, you should, if you pay by direct debit, be able to keep your details the same and the Council will simply alter the payments once your new bill has been calculated.

Remember that you become liable for Council Tax on your new property the day you take ownership of it or take over the tenancy and not when you actually move in.

How to cancel Council Tax

If you are moving out of the region, you will need to cancel your Council Tax account and pay any final balance or provide a forwarding address for a refund. Once you have paid your final bill, if you pay by direct debit, do not forget to cancel the direct debit. You will also need to set up a new account for your new region/ Council and set up a new direct debit or standing order. Do not delay and wait for a new occupier letter to come through, as this will not reduce your payments, it will only serve you less time to pay the amount due. Do not, under any circumstances simply cancel your automatic payment as this will not cancel your account.

How to pay Council Tax

Typically, Council Tax is paid monthly over 10 months rather than a full year and you do not pay Council Tax in the months of February and March, but you can discuss this with your local Council and extend the payments to go across the full 12 months. If you want, you can pay the entire amount upfront in one go.

There are several ways to pay your Council Tax. You can set up a direct debit or a standing order with the Council, which will take each month’s payment automatically from your bank account; you can pay via the Council’s website payment tool or via BACS transfer; you can pay in person at the Council offices or over the phone using a credit or debit card; you can also pay at a post office, a Payzone or Paypoint outlet. Your Council Tax bill will have all the different payment options on the back.

What happens if you do not pay Council Tax?

You might be wondering what happens if you do not pay your Council Tax. This is not advisable. If you do not pay a Council Tax demand, the Council is perfectly within its rights to, after due process, to take you to court.

If the court decides you have no good cause for not paying the Council Tax bill and you continue to refuse, it can sentence you to up to 3 months in Prison. Alternatively, the court could sanction the use of a bailiff to seize your property to cover the cost of the bill.

Each of these options will incur more costs for you on top of the overdue Council Tax payments. The Council can also apply to your employer for deductions from your wages to pay the Council Tax arrears or they can apply to have money taken directly from your benefits if you receive them.

Please note that, if it comes to legal action by the Council, you will lose the ability to pay the Council Tax bill in instalments and you will need to pay the entire balance in one go.

As you can see, Council Tax can be a complex matter and there are many different aspects which affect how much you must pay. If you have any doubt about your Council Tax bill, we strongly recommend that you have a conversation with your local Council’s Council Tax Office so that you fully understand your situation and ensure that you are paying the right amount.

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