Council Tax is a mandatory bill raised by local councils in England, Scotland and Wales on residents in their area. To qualify for a council tax bill, one must be (a) an adult; this means being above 18 years of age and (b) renting or owning a house. While the tax itself is an annual payment, it is divided into 10 instalments to make payments convenient for residents.

Collections made by local councils through council tax enable them to provide for community-based services such as police, fire and rescue, street lights, parks, schools, roads, garbage collection and elderly care.

The amount of council tax varies from council to council and property to property. There is no flat rate for council tax bills. Properties are assessed based on their value and then assigned a band between A to H; with band A qualifying a property’s residents for the lowest band of taxes and H making residents eligible for the highest band. Homes in London, generally fall under band D for council tax payments.

When Does Council Tax Run From?

Council Tax bills are payable from the start of the financial year in April with 10 monthly instalments concluding in January. While councils maintain February and March as tax-free months to collect payments that were not made in time; those liable to pay council tax bills may request their local council for 12-month instalments to make payments convenient by reducing the amount of each instalment.

Through the next few paragraphs, we will explore various areas of interest concerning Council Tax Bills, including the following:

  • the nature of a council tax bill
  • assessment of properties for council tax
  • annual collection of council tax
  • council Tax debt and its consequences
  • forecasted changes in council tax

What Does Your Council Tax Bill Tell You?

Essentially, your council tax bills indicate the following three areas:

  • the total amount due for the entire year
  • how the annual amount has been worked out by the local authorities
  • the dates are payments will be due

A standard bill is spread over 10 monthly instalments that run between April and January. However, if residents find it difficult to make timely amounts as per the monthly amount that is due, they can request their local council to divide this annual tax into 12 instalments; thus, reducing the size of the monthly instalment.

It must be remembered that you may not receive the same amount of council tax bill as another person living in your council. This is a property-based tax that varies depending upon the value of the property. 

Also, each council designs their council tax scheme. This means that your bill may be different as compared to another individual living in a different council. You can click on this link to contact your local council Find your local council – GOV.UK (www.gov.uk)

How Are Properties Assessed For Council Tax?

Council tax applies to properties used only for residential (not commercial or business) purposes. Based on the value of the property, the Valuation Office Agency (VOA) assigns one out of eight bands to determine the total amount of council tax due on the residents. Council tax bands can be found here How domestic properties are assessed for Council Tax bands – GOV.UK (www.gov.uk)

This value is based on the assumed market value of the said property on April 1 1991 in England and April 1 2003 in Wales. There are no adjustments made for inflation or a rise in housing prices during this time.

In addition to this, the Valuation Office Agency considers the following factors when assessing a property:

  • location
  • size
  • character
  • layout
  • change in use

What Is The Amount Of Council Tax Collected In A Year? 

According to statistics released by the Department for Levelling Up, Housing and Communities, Collection rates for Council Tax and non-domestic rates in England, 2020 to 2021 (publishing.service.gov.uk) local authorities collected a combined sum of £32.2 billion as council tax during 2020-2021. This amount is not year specific and may include arrears from previous years as well. 

While it is an increase of 1.9 per cent or £0.6 billion from the previous year, it must be noted that the amount is much less as compared to previous years since the UK Government had extended many support programs post covid-19 due to which the number of collections, as well as the amount collected per collected, have decreased.  

It should also be noted that this amount shows a 95.7 per cent collection rate by local authorities. The remaining amount is considered as arrears in council tax bills and is yet to be collected from residents.

What Happens If Someone Is Unable To Pay Their Council Tax?

If an individual is struggling to pay their council tax bills, they must contact their local council office immediately. The first convenience extended towards such individuals is that the local council may allow them to pay their council tax bill in 12 instalments as compared to the standard 10. This reduces the amount that is due each month; thus reducing the size of each payment.

If this is not a workable solution, the council office may offer the individual a one time discount so that future payments are made easily.

If someone is low on income or receiving other forms of state benefits, they may not be eligible to pay their council tax in full. To check your eligibility for a reduction in council tax bills, contact your local council office here Apply for Council Tax Reduction

However, if someone deliberately fails to make their council tax payments and does not inform the council of their situation, they will be sent a reminder notice to clear their payment within the next 7 days. Failure to do so may impose the full payment of the annual tax on the individual.

Continuing to miss council tax payments may call for legal action from the council’s side as they will be authorised to send a liability order (a legal demand) to clear your unpaid dues. All legal fees incurred for this process will be added to the defaulter’s council tax bill.

As a final resort, the council office can send enforcement agents/bailiffs to seize the property of the defaulting party. If someone does not have a good reason to default on their council tax payments, they may be sent to jail for 3 months. 

Are Council Tax Bills Expected To Rise In The Future?

According to research that appeared in a news article on the BBC website Council tax could rise by £220, say researchers – BBC News it is expected that council tax bills will rise by at least £220 by 2025.

The prime reason for this tax hike is perhaps the reduced funding towards local councils during the covid 19 pandemic. Local authorities are now being encouraged by the government to come up with alternative sources of income. 

Under the current situation, there needs to be an annual increase of 3.6 per cent in council tax bills so that local council services may be provided at the same level as they were pre-pandemic.   

On the other side, local councils are requesting the government to step up in these difficult times as increased pressure on households, coupled with a tax hike is going to increase the challenges faced by households that are already finding it difficult to make ends meet. 

Meanwhile, the government, which has already injected £12 billion into local council funds since the onset of the crisis that the pandemic brought, is asking local councils to consider alternate sources of revenue to sustain public service provision.

FAQs: When Does Council Tax Run From?

Why is council tax paid over 10 months?

Although Council Tax is an annual bill, it is spread over 10 monthly instalments to make partial payments convenient for residents. Bills are accounted for the months between April and January; with February and March being tax-free months. In this way, if residents are unable to make a certain payment during these 10 months, they can clear their dues in the remaining 2 months. 

 

What date is council tax paid?

Council tax bills are due on the 1st day of each month with 10 payments spread across April 

through January. However, residents can request to pay by the 15th or 25th of each month. Those individuals who pay via direct debit have the option to choose between the 1st, 10th or 21st of each month.

How long before council tax is written off?

In case of severe hardship, council tax may write off arrears in bills. As a general rule, if council 

debts continue for 5 years, the next year they will be written off and the defaulter will become debt-free.

Do you pay council tax a month in advance?

Individuals have the choice to make full payment for their annual council tax bill upfront. The total bill may also be divided into 2 semi-annual payments. However, as a general rule, council tax bills are paid every month.

How long can a house be empty without paying council tax?

Property that is unoccupied and unfurnished may be applied for a 100 per cent reduction on council tax payment. However, once the month is over, a full tax will be applicable. If the property is not the main residence of the owners, is a holiday home or is empty due to the owner being in hospital or living elsewhere to take care of someone else, the premises become eligible for a council tax exemption.

References: 

Council Tax: Paying your bill – GOV.UK (www.gov.uk)

Paying your Council Tax (merton.gov.uk)

Council tax bills can be spread over a year from April (moneysavingexpert.com)

Frequently asked questions about Council Tax (chesterfield.gov.uk)

Council tax could rise by £220, say researchers – BBC News

Covid: What is council tax and should it go up in the pandemic? – BBC News

Pay Council Tax arrears – GOV.UK (www.gov.uk)

Collection rates for Council Tax and non-domestic rates in England, 2020 to 2021 (publishing.service.gov.uk)

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John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.