Almost every council with responsibilities for social care in England will be raising its council tax bills by the maximum 4% this year, according to new analysis from the County Councils Network (CCN).
The CCN’s analysis of 151 councils in England found that, of the 133 that had published draft budgets, all but two were proposing to levy the full 2% social care precept in addition to the maximum council tax 2% cap.
While the research covers only a limited proportion of the total 317 billing authorities and 98 major precepting authorities in England, and doesn’t include any responses from councils in Scotland and Wales, the vast majority of councils did increase rates last year.
Here, Which? explains why council tax rates are on the rise and what you can do to get your bill reduced.
Why are council tax rates increasing?
Councils don’t have to increase council tax by the maximum amount, but councils in England are facing a funding shortfall of £19bn over the period to 2025 – and that’s even if all councils raise their rates by 4% next year and 2% for the following four years.
Bill increases above 4% are also possible; councils can increase rates by more than the cap, but have to get the motion passed by a local referendum to do so, and parish councils may add an additional parish precept charge.
As a result, it’s likely that the vast majority of councils will be forced to up their rates for the next few years to come, and funds will still be squeezed. Many councils will be hoping the upcoming Budget announces a significant amount of funding for local authorities.
Many people have already seen their council tax bills rise significantly over the past couple of years. In 2018-19 the cap for general council spending was increased from 1.99% to 2.99%, with an additional 3% social care precept. In 2019-20 the most that councils could increase rates by without a referendum was 4.99%.
If government funding and council tax income aren’t sufficient, councils will be forced to reduce spending on services such as libraries, parks and leisure, waste collection, and arts and culture.
- Find out more: paying council tax
When will I find out what my council tax will cost for 2020-21?
Most people will receive their council tax bill for the upcoming tax year towards the end of March.
You can either pay your full year’s bill in one go, or split it into 10 payments from April to January (you usually won’t be billed in February or March).
Your local authority’s website might publish its rates before the letters are sent out.
The UK government also publishes rates tables for England and Wales, but these aren’t set to be available until 25 March – by which time you might have already received your bill.
The Scottish government statistics aren’t usually released until April.
- Find out more: what is council tax?
What is council tax spent on?
Councils charge a tax on their residents to fund local services such as the police, refuse disposal, street cleaning and support for vulnerable people.
Expenses will vary depending on the needs of the residents, which is why bills can vary widely between areas.
Councils also receive government funding each year, which they are responsible for managing.
As to how your bill will change in real terms, it will depend on where you live and which council tax band your property falls into.
Someone in a Band D property in Basildon could see their bill rise from £1,823 to £1,896. But someone in a Band D property living in Hartlepool could be facing a council tax bill of £2,095 for the 2020-21 tax year, following a rise of around £80.
To see how your area compares, you can use the free Which? council tax calculator. Simply enter your postcode, and you’ll be shown your local authority’s tax rates for all property bands.
- Find out more: council tax calculator
Could you reduce your council tax bill?
Depending on your circumstances, there are a few ways you could reduce your council tax bill.
Change your council tax band
If you think your property is in the wrong council tax band, you can request a revaluation from the Valuation Office Agency (VOA).
This can be the case if, for instance, a property has been split into smaller flats, or was perhaps put into the wrong band when it was first built.
You could be moved into a lower council tax band, which would result in cheaper bills in the future and a refund of any bills you’ve overpaid in the past. However, properties can also be moved up a band, in which case your bills would increase.
- Find out more: how to get a council tax refund
Get a single-person discount
As council tax bills assume that two adults live in a property, you can get a 25% discount if you live alone.
But, as some people are not counted as second residents for council tax bill purposes, even if you share the property you could still get the discount.
‘Disregarded’ people include:
- student nurses
- carers (providing at least 35 hours’ care a week) if they are not the main resident’s husband, wife or civil partner
- monks and nuns
- resident hospital patients
- a young person (under the age of 25) in approved training.
See our guide for the full list.
If everyone in the home is ‘disregarded’, you’ll usually get a 50% discount; if everyone in the property is exempt (eg full-time university or college students) then you won’t pay any council tax.
Get a discount based on income
Those on low incomes can get council tax reductions of up to 100%, paid as rebates. Eligibility criteria vary between local authorities, so you’ll need to check with yours first.
Hardship relief can temporarily reduce your council tax bill in events such as losing your job. To apply for this, you’ll need to prove things like:
- having no savings
- your essential outgoings exceeding your income
- personal circumstances preventing you from paying your bill.
Find out more: reducing your council tax bill