Council Tax Costs the Poorest Six Times More Than the Rich- Can You Pay Less?

Elizabeth Elden
23rd March 2018, 8:00 AM
  • New study shows council tax is in dire need of reform
  • Burden for the poorest families in London greater than for the rich
  • Many aren’t claiming the council tax support that they’re owed
  • Can you reduce your council tax bill?
Council Tax bills hit the poor harder than the rich, according to a new study. Image: Getty

The council tax burden for the poorest households is six times greater than that for the highest earners as a proportion of their income, according to new research.

The Institute for Public Policy Research, IPPR, found that council tax swallow 10% of poorer households income, whereas it is just 1.3% for richer households.

The IPPR argued that council tax takes too little account of ability to pay, and is therefore unfair.

The research said that a poor take-up of council tax support is partly responsible for the “excessive burden”.

Many don’t know about what benefits and support they are due, which leads families to miss out on support.

Luke Murphy, IPPR associate director, said, “Council tax is a poor tax.

“It hits the poorest hardest, it is increasingly not fit for purpose and is in dire need of reform.”

Earlier this week, another think tank, the Resolution Foundation, argued that council tax is outdated, regressive, and functions in many ways like its controversial predecessor- the poll tax.

The Foundation argued that under the council tax system, wide bands can cover significantly different property value, meaning that council tax’s link to property values is weak.

Council tax will be rising this year, by up to 6% for some families, which will exacerbate the problem being presented by the IPPR.

This means that Council Tax as a whole will rise by £1 billion, yet many are saying that it is still not enough to support struggling local services.

In February, it was announced that Parliament approved a funding settlement for English local authorities that would see a real terms increase in available resources over the next two years, and give them access to over £200 billion from 2015 to 2020 to deliver the services local communities need.

Sajid Javid said in February, “Parliament has today approved a settlement that strikes a balance between relieving growing pressure on local government whilst ensuring that hard-pressed taxpayers do not face excessive bills.”

Can you reduce your Council Tax bill?

One really simple way to reduce your council tax bill is to check if you’re eligible for any discounts, for example, students and those claiming Universal Credit and eligible for discounts.

It’s also really important that you check if you’re in the right Council Tax band, as this could save you thousands.

To do this, check what band your neighbour is in, this information is publically available so you don’t even have to ask them.

If they’re in a similar size property but a lower band, you may have a claim.

To claim, you can contact the Valuation Office Agency, VOA, and you’ll be given the chance to explain why you think you’re paying too much.

If you’ve been in your home more than six months, you might get told that you can no longer challenge the banding, but this isn’t true, so challenge this claim.

If you get rejected, you have three months to appeal, but if your claim is successful, you will get lower payments and a rebate from when you moved into the property, which could be very valuable.

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