GB News: Expert discusses potential rise in Council Tax
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The Institute for Fiscal Studies (IFS) has predicted council tax may have to be increased by up to five percent a year over the next three years. This could push bills up by £220, adding to already mounting monthly outgoings for Brits as the cost of living soars.
The IFS found council tax bills would have to increase by at least 3.6 percent to keep services at levels seen before the pandemic.
But by 2024/25 the extra pressure and demand on services are likely to see an increase of five percent.
Kate Ogden, a research economist at IFS and an author of the chapter, said: “The Government has stepped up with billions in additional funding for councils to support them through the last 18 months, it is likely to have to find billions more for councils over the next couple of years if they are to avoid cutting back on services, even if they increase council tax by four percent a year or more.
“The coming financial year is likely to be especially tough, with the likelihood of at least some ongoing Covid-19-related pressures, and a particularly tight overall spending envelope pencilled in.
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“At the same time, Government needs urgently to deal with a local government funding system which is becoming hopelessly out of date, being based on population levels and characteristics in 2013.
“This results in manifest unfairnesses in the distribution of resources between councils.”
Council tax is paid by everyone in the UK aged over 18 who rents or owns a home.
The amount you pay is based on which band your home is placed into – with some deductions based on certain circumstances.
But how do you know if you’re paying too much council tax?
James Andrews, senior personal finance editor at money.co.uk told Express.co.uk: “Council tax bands were first introduced in the early 90s, and haven’t been updated since.
“And the speed at which the banding was implemented at the time means potentially hundreds of thousands of properties could be mis-attributed.
“And all that is before we get to the homes that have been built since then.
“The first step in bringing your council tax payments down is to check your tax band on the government website.
“If you think your band is wrong, then you can make an appeal.
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“Just be careful to do your research first, as you could see your council tax rise as well as fall.
“It’s also essential to check if you are entitled to a discount on your council tax, as this could save you a substantial amount over the course of the year.”
There are certain circumstances which could see your council tax bill decreased.
Mr Andrews explained: “For example, if you’re the only adult at the address, are currently receiving benefits or on Universal Credit, then you may be entitled to up to 25 percent off your council tax.
“If you, or someone you live with is a carer, or has a health condition or disability, then you may also be able to claim a discount.
“People diagnosed with a serious mental health condition are also entitled to a discount.
“Most students can claim exemption from paying council tax, meaning they won’t have to pay a thing, however, this isn’t done automatically – students need to visit the government website to check their eligibility for a discount.”
If you’re a student you can visit the website here to see if you qualify.
Your property may be revalued and put in a different band in some circumstances, for example if:
- you demolish part of your property and do not rebuild it
- you alter your property to create 2 or more self-contained units, for example an annexe – each unit will have its own band
- you split a single property into self-contained flats
- you convert flats into a single property
- you start or stop working from home
- the previous owner made changes to your property
- there are significant changes to your local area, like a new road being built
- a similar property in your area has its Council Tax band changed
And if you’ve been paying too much for your council tax, there’s good news as discounts are backdated.
Mr Andrews said: “Discounts and exemptions are backdated, so if you’ve overpaid then you could be able to claim the money back.
“The same goes for a refund for being in the wrong tax band, meaning you could in theory backdate payments to the 1990s, a serious sum in most cases.”
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