What Is Council Tax?
In England, council tax raises nearly £30bn each and every year, with over 22m properties liable for paying for the bill. But what is the money used for, how much do you have to pay, and are there any exemptions on council tax bills for some people in the UK? We tell you everything you need to know regarding the council tax system in the UK.
How does council tax work?
The introduction of council tax was in 1993, replacing poll tax (the Community Charge), basing your council tax bill based on the value of your property. On average, council tax pays for around 25% of local government spending on services such as:
- Refuse disposal
- Support for the elderly
- Support for the vulnerable
- Policing
- Fire services
- Road maintenance
- Local park maintenance
Who pays for council tax?
The payment of council tax is, generally speaking, the responsibility of either tenant renting the property (whether it be council accommodation or privately rented accommodation) or the home-owner. Council tax is still applicable for empty properties or unfurnished homes, but the local council may provide a discount.
In the broadest terms, you are likely to have to pay for council tax if you are over 18 and own or rent a home. Council tax payments are based on the idea of two adults living in a home so you will receive a discount of 25% if you:
- Live alone
- You are the only adult in your property
- This rises to 50% if no-one in your property counts as an adult.
Who is exempt from paying council tax?
If you belong in one of the following categories, you will not be required to council tax.
- If you are a full-time student, and everyone else whom you live with is also a full-time student.
- 18-19-year-olds in full-time education
- People on certain apprentice schemes
- Student nurse
- A long-term hospital patient
- A care home resident
- Diplomats
- Full-time college students
- People with a severe mental impairment
- Language assistants registered with the British Council
- If you are under 25 and receive help from the Young People's Learning Agency
- Living in a hostel or night shelter such as the Salvation Army hostel
- Living in a probation or bail hostel
- A member of a visiting armed force, this goes also for any dependants.
- Live-in carers for someone who isn't their partner or child under 18.
How much council tax do I have to pay?
The amount of council tax that is required to be paid will be depending on your region and the local council, who decide the amount. Certain factors that dictate how much you will need to pay for your bill include
- The valuation band of your property, (the council tax bands for England depending upon their value are listed in the table below). Those for Scotland and Northern Ireland differ.
- The overall amount the council needs to raise locally.
- Council tax increases from band to band.
- More than two-thirds of properties in the country are in Bands A-C.
- In England, the amount required by a Band A property is one-third of that required from a Band H property and this always remains the case.
- According to the government website, all evaluations for council tax bands are based on the value of the property on 1 April 1991 for England and Scotland, and 1 April 2003 for houses in Wales.
- You can find out how much your exact bill will be by contacting your local council.
- If you think you are paying the wrong amount for your council tax bill, you can dispute this and if successful, potentially get your property revalued.
As well as finding out the value of your home in England, Wales or Scotland, you also need to find out the following information:
- How much your local council charges for these property bands
- If you any exemptions or discounts are applicable to you.
- If you receive benefits or are on a low-income, you may be able to get a Council Tax Reduction. Until 2013, this was also known as Council Tax Benefit. Your bill may be reduced by up to 100%, but this is dependent upon your personal circumstances. It is important to note this exact scheme is not available in Northern Ireland, but there is the Housing Benefit Rate Relief scheme instead.
Changes that can affect which council tax band you are in
Your property may require a revaluation and may be put into a different band as a result of one the following:
- You start or stop working from home
- You split a property into a number of flats
- The previous tenant or owner made changes to your property
- You demolish and do not rebuild a section of your property
- A property similar to yours in your neighbourhood has had its council tax band change
- If major infrastructure is being built in your local area, such as a new road
If you believe your property may fall into one of the following categories, you can contact the Valuation Office Agency, (VOA) who deals with council tax band valuation and can see if changes can be made to your home. You will receive a decision from the VOA within 2 months of contacting them. They may ask you to provide further evidence or they may revise your bill, or explain why changes can't be made.
Properties exempt from council tax can also include
Certain properties can be exempt from council tax (if only for a short amount of time), though in some circumstances it can be indefinitely. These include:
- Property legally re-possessed by a mortgage lender
- Condemned property
- A holiday caravan or boat on a site where council tax is already being paid on a property.
You can contact the Citizens Advice Bureau (CAB) to speak with an advisor if you believe you should be exempt from paying council tax.
Ways to Avoid a Payday Loan
When applying for most bridging loans, the provider will run a credit check on your account. This involves accessing real-time data on your credit report, giving the lender an insight into other credit products you have applied for, are using and amount of debt that you owe. Whilst having a mortgage and credit card accounts is very normal, having a payday loan is something that may turn the lender off you and decline your application.
These are high-cost examples of short term credit and used by individuals typically in emergency situations. Bridging lenders therefore see individuals using them as a last resort and financially stretched, therefore they should not be taking out a secured loan or an additional mortgage as this could create further debt. Especially for those that live in the residence as the premise of having your home repossessed is certainly a worst case scenario.
If you apply for an unregulated lender like MT Finance or Regentsmead they may not carry out credit checks at all, preferring to assess the value of your property in question and the opportunity. However, affordability also plays a role so being free of debt and payday loans is advisable.
What is a payday loan?
A payday loan is also known as a short-term loan. The cost of borrowing money is usually significantly higher than say, a credit card or increasing the credit on an arranged overdraft due to the interest rates on short-term loans bad credit. These interest rates are so high that even if you are able to pay back the money within the repayment period, it will still cost you considerably more to give back than you asked for. Whilst the eligibility criteria for these loans tend to be less stringent, (for example, if you have been turned down for a credit card as a result of a bad credit score, you still have a good chance of being accepted) and therefore the money is easier to access, these costs can get completely out of control if you end up struggling to pay back this loan. As a result, taking out payday loans should be really be used in emergencies only.
What should I consider before using payday loans?
Taking out a payday loan should be seen as a last resort for most people. Why? as previously mentioned, you can end up in spiralling debt pretty quickly, and you could end up finding your credit score being affected. That is even if you pay the short-term loan back on time!
If you are seriously considering getting a short-term loan and it is for one of the reasons below, we believe that it would probably not be the right solution for you.
These include:
- Using a short-term loan to pay mortgage or rent.
- For household bills
- You intend to use this loan to pay off other debts.
- The money will be used for unnecessary expenditures such as going out, luxury food, or new clothes.
Getting a payday loan may also not be the right decision for you if:
- You have another payday loan outstanding.
- You don't know how you will pay the money back within the repayment schedule.
- You aren't sure where you would be able to find the money to pay back the short-term loan at all.
Alternatives to high cost loans
Using a credit card may be a better alternative to a payday loan and as a longer-term solution. However, be sure to only spend as much as you can afford to repay, otherwise, this can end up a costly affair when it comes to repayments.
Borrowing from family or friends
Your pride may take a hit, and it is most likely that it is an option that you would like to avoid considering. However, it could stop you ending up in considerable debt that you may experience if you took out a payday loan.
If you did decide this alternative set up some ground rules so everyone feels comfortable with the situation. Any borrowing agreement should be put in writing. You should also speak with your family member or friend what would happen in the worst case scenario if you couldn't pay the money back, or were late in doing so, as this could cause arguments in the future. Once you've made an agreement, be sure to also work out a feasible repayment plan.
Agree on an overdraft with your bank
Speaking with your bank over a temporary increase on your overdraft can be a way to get some money without getting into considerable debt. However, make sure that you don't end up in an unplanned overdraft, as you may have to pay high fees for using one.
Can you ask for a pay advance?
If you are in employment and find yourself really struggling to get by before payday, it may be worth asking your employer for an advance on your wages. After all, if you don't ask, you don't get!
Similarly, if you have just started in a new job but are a recipient of benefits, you may be able to ask your Jobcentre Plus adviser for a short-term advance just to tide you over until payday, with the expectation that this will be then paid back through your earnings or benefit payments.
Where else can I get help?
If you need extra support or information about what to do next in your situation, you could contact:
- Money advice service
- Stepchange
- Money for Life
- Citizens Advice Bureau
- andbook.fca.org.uk/handbook/glossary/G3328.html">FCA
The Best Ways to Decorate a Rental Property
Young people these days in the UK are increasingly becoming synonymous with a rather depressing millennial-defining name: generation rent. This refers to the fact young adults are being pushed towards renting accommodation as a result of astronomically high house prices, a meagre growth in real incomes and tighter lending policies being offered by banks. A study conducted by the thinktank Resolution Foundation has shown that barely half of all UK families in Britain own their own home, highlighting the difficulties young adults face, whilst the rate of property-owning has been declining since 2002.
Think those statistics sound dismal? Wait till you hear about renting in London. Research from PwC has shown that by 2025, only 40% will own their own home, with city dwellers becoming predominantly renters. In comparison, 60% of Londoners owned their property in 2000.
Evidently, a profound change has taken place, and some might say a dreary one, but it doesn't have to be viewed that way necessarily. When people think about one of the fundamental perks of buying a home, it is likely high up on that list will be something to do with the freedom to decorate in whichever way you choose.
However, if getting onto the property ladder doesn't seem too likely to you in the not too distant future - fear not! Hope is far from lost.
In fact, there are many different ways you can inject a little bit of your personality into the place where you are renting, without having to fret about causing irrevocable damage and never seeing the light of day of that hard-earned deposit.
We should add though that it is also worth asking your landlord before expecting the worst on making alterations: some don't mind if you repaint a room, add a bit of wallpaper or add a couple of shelves, provided that you return the property in its original state when leaving for good.
Still, even if this isn't possible, there are plenty of options available to you. We've had a little peruse online for some clever and creative ways you can decorate your rental property, and gathered only the very best:
- Invest in lighting
- Wallpaper stickers
- Plants
- Flowers
- Pictures and postcards
- Wall tapestry
- Bookcases
- Soft furnishings
Invest in lighting
Harsh lighting hardly gives a welcoming homely vibe to a property, so if you want to make some speedy changes to your home, investing in some table or standing lamps, or fairy lights is a great way to start.
Wallpaper stickers
Yes, it is possible to customise your walls without damaging them, or making a hefty dent in your deposit! Have you thought about trying contact paper in your home? There are a myriad of things you can do with it - Pinterest is an excellent place to look if you are feeling thrift of inspiration. These wall stickers are removable, and another way in which you can add a bit of personality to your rental property. We love these chalkboard wall stickers from notonthehighstreet.com.
Plants
Buying some plants or succulents is a quick and relatively inexpensive way to update your home and add a little personality, why not change things up a little?
Flowers
In a similar vein, flowers can add a splash of colour (and a bit of oxygen) to a dull living room or bedroom. If buying flowers regularly seems like it could end up a bit of a costly affair, why not buy a batch of fake flowers to supplement them and get an almost the same effect? And there are plenty of things you can do with them - why not put them in a little glass jar, or turn them into floral wallpaper hangings?
Pictures and postcards
So, perhaps your landlord won't allow you to paint the walls a lurid green, but, you can still add some colour to them! Why not hang a few painting up, using various sizes so you can frame a few postcards too? If you are a bit scared of drilling a few holes into the wall (and who can blame you) then why not prop the frames on a bookshelf or mantelpiece?
Buying artwork or posters for your home doesn't have to be an expensive investment: try scouring local charity shops for some bargains, browse eBay and Amazon.
Wall tapestry
Want to make a statement? Hanging a wall tapestry should do just the trick! We like this intricately detailed, fringed tapestry available at Urban Outfitters at £45.
Bookcases
Don't underestimate the power of a humble bookcase! If you are a serial renter, bookcases are your friend. Fairly easy to put together, and a fantastic storage option if you aren't able to put shelves up. You could also use a bookcase to pop a few frames onto if similarly, you are limited in terms of hanging pictures on your wall, turn into an eye-catching display and add some succulents too!
And who says that bookcases have to be limited to your living room or bedroom? Why not use one for storing ingredients from the kitchen? Get creative! You could even use a bookcase as a room divider, the options are endless.
Soft furnishings
If you are feeling restricted in your ability to add some character to your house, why not invest in some cosy throws, blankets or cushions? It's a practical way to add a bit of textural detail and colour to your interior and to snuggle up in comfort during these next few cold wintry months. For ideas, we really like the home collection Liberty has to offer this season.
As you can see, there are numerous ways in which you can decorate your rental property. It may require a little bit more time and creative thinking to consider the options than if you had your own property, and with a few ideas you may have to pick up the phone and contact your landlord, but it will be time well spent. There is absolutely no reason why you can't add your own style to your home, rented or not!