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.