Council tax is a payment you make to your local council. The money the council collects is to help pay for services like bin collections, street lighting or to deal with those annoying potholes.
Council tax is one of the big expenses most of us face each month. What’s more, it’s recently become more expensive too, with an increase of up to 5% kicking in from the start of April.
Here we explain exactly how council tax works, who has to pay it, and what happens if you’re not able to pay your council tax bills.
Why do I pay council tax?
Council tax pays for essential services that we rely on.
Each year your local authority will publish records of what it has spent the money raised through council tax on. These include:
- Emergency services, such as the police and fire brigade
- Cultural services, such as libraries, galleries and parks
- Rubbish and recycling collections
- Elections and local tax services
- Environmental health
- Providing housing advice and support, especially for homeless people
- Planning policy and transport, including car parks
- Running community centres
- Dealing with antisocial and noise complaints
- Keeping open spaces, including parks, clean and tidy
- Leisure facilities such as swimming pools and gyms
How much council tax do I have to pay?
The size of your council tax bill depends on the council tax band your home has been placed in.
Homes are put into bands from A to H depending on their value in England and Scotland, and from A to I in Wales. In Northern Ireland a different system is in place.
Each local authority then sets a rate of council tax for each property band. As a result, the cost of being in band D in one area may be significantly different from the council tax bills paid by a similar band D property located at the other end of the country.
These council tax rates are then adjusted each year.
Homes in band D in England, for example, pay an average of £2,065 for the 2023-24 tax year. That’s up by 5.1%, or £99, on the previous year according to government data.
You can check what band your property is in via the gov.uk website or by looking at your latest council tax bill.
How can I check if my home is in the right council tax band?
In England and Scotland the current council tax bands are based on valuations from 1991. The system at the time was criticised for not being thorough enough, and clearly a lot has changed regarding the value of individual properties since then.
As a result, many properties are now in incorrect bands, resulting in people paying the wrong amounts of council tax. In some cases, households have been paying the wrong level of council tax for many years. In Wales the council tax bands were updated in 2005 so they are slightly more accurate.
If you think your property is in the wrong council tax band, it is possible to challenge this decision and, in some cases, receive a refund for every year in which you’ve made incorrect payments.
This usually happens if your home is in a different band to other similar properties on your street. You can check your home’s council tax band at gov.uk in England or the Scottish Assessors Association for properties in Scotland.
If you believe your home is in the wrong council tax band, you can use these websites to challenge the decision. While it’s possible that your home will be moved to a cheaper council tax band, it is possible that you may actually be moved to a higher band, resulting in higher council tax bills.
Who pays council tax?
Council tax is paid by the household, rather than levied against individuals. However, whether a full council tax bill is due will be dictated in part by who is living in the property.
A full council tax bill is based on two adults living in a property. However, there are some people who are ‘disregarded’ from this assessment. These include anyone who meets the following criteria:
- Aged under 18
- Aged 18 or 19 and in full-time education
- Full-time students at college and university
- Some students on apprentice schemes
- Student nurses
- Aged under 25 with funding from the Education and Skills Funding Agency
- Foreign language assistants registered with the British Council
- Those who are severely mentally impaired
- A live-in carer for someone who is not a partner, spouse, or child under 18
So if for example the property is occupied by two adults, but they are both full time students at university, then no council tax will be due. Equally if one adult is over 18 and working full time, but they live with a child, then the household will be entitled to a council tax discount.
Some properties are also exempt from council tax. This includes those which are unoccupied and unfurnished for up to six months, condemned properties, and in cases where the person living in a home has moved out to care for someone else. A full list of exemptions can be found at gov.uk.
How do I pay my council tax?
Council tax payments are usually split over 10 months but you can request to pay over 12. The bill can also be paid in one lump sum.
There are a few different ways to pay your council tax. You can do this online, via monthly direct debit, or in cash with a paypoint, payzone or quickcard at post offices, banks, newsagents and convenience stores.
Can I get a council tax reduction?
There are discounts available for council tax, ranging from 25% to 100% of the annual bill.
If you live alone, for example, you can get 25% knocked off the cost of your bill, and if you’re a full-time student you won’t pay it at all.
If someone living in a home has a disability, there is also usually a discount applied, while those with low incomes or receiving benefits may also pay less.
For a full list of discounts, see our guide to council tax reductions.
What happens if I can’t pay my council tax?
The pandemic, combined with the cost-of-living crisis, means many have fallen into debt with council tax and are unable to pay their bill.
Sue Anderson, head of media at the StepChange Debt Charity, says: “Council tax is a particularly problematic priority bill, because once instalment payments are missed, councils demand that the whole annual bill is paid in full and may appoint bailiffs ‒ incurring additional costs ‒ to try to collect the debt.
“In practice, people experiencing problem debt are unlikely to be able to meet these payment demands. Local councils will usually agree to come to a repayment arrangement, but they may seek to deduct money directly from people’s earnings or from any income received in universal credit or other benefit payments to repay council tax arrears.”
If you’re not able to pay your council tax, you should contact your local authority straight away. It can offer you help and a more affordable plan, such as by spreading the payments out over 12 months. You can also contact your local Citizens Advice Bureau or a free debt charity for advice and support.
When a payment isn’t made after 28 days, a court summons can be issued by a local authority for the amount due. If this isn’t paid, a liability order can be issued which allows the authority to collect the money from a person’s income, wages, or benefits.