Money Watch – Personal Finance Blog

What your council tax gets spent on

Lovemoney.com has released the results of a survey looking at which tax is the most hated in Britain, and a third of those questioned named council tax as the one they hated more than any other.

A third (33 per cent) of respondents said they hate council tax more than any other, pushing old favourite inheritance tax into second place with 29 per cent. Sixteen per cent like stamp duty the least, followed by 13 per cent who really detest income tax. Nine per cent of respondents loathe VAT more than any other tax. Two in five respondents (39 per cent) would like to see the number of council tax bands increased so that owners of more expensive homes pay more, but a third (34 per cent) would like to see it scrapped altogether.

If you’re a council tax-hater, then lovemoney.com suggests there are a few things you can do to try to cut your council tax bill:

1. Make sure you are in the right band – You might find that even though they live in a similar or identical house, your neighbours are paying a lot less than you. Go to the Council Tax Valuation List to find out.
2. Appeal – If you do find you’re in a higher band than many of your neighbours, you can make what’s known as a proposal – which is a formal application to have your band changed. If your claim is successful, you’ll be entitled to a refund of your overpayments from when you moved into the property. But you have to be careful, because if your claim is not successful then your band may go up and you might end up paying more!
3. Discounts and exemptions – Even if you are in the correct valuation band, there are other ways to get a discount on your council tax. Always check with the council first and check your eligibility for any discount. For example, if you or someone in your household is disabled you may get a reduction. Also, if you’re the only adult living in your home, you’ll get 25 per cent off your bill and you can avoid paying at all if only students live in the home, or if all the inhabitants are under the age of 18. If your home is empty because it needs major repairs or alterations to make it habitable, you’ll have up to a year free from council tax. However, once that year is up, you will have to start paying again even if the work isn’t finished. You also won’t have to pay council tax for up to six months if the property is empty and substantially unfurnished and you are allowed to live in the property for up to six weeks during this time. If you have a second or holiday home, you will still need to pay council tax for it. But you will receive a 10 per cent – 50 per cent discount as no one is living there on a permanent basis
4. Council tax benefit – If your income and capital (such as savings and property) is less than £16,000, you may be entitled to council tax benefit. This means your council tax bill will either be discounted or cut entirely. If you live with your partner, only one of you can claim and your income and capital will be assessed together. However, if you live with someone who is not your partner, you may also be able to claim what’s known as Second Adult Rebate. To qualify, your housemate must be 18 or over, not paying rent or council tax, and on a low income. You may be able to get Second Adult Rebate even if you don’t receive council tax benefit. And this could reduce your bill by 25 per cent.

Personally, I wouldn’t put council tax at the top of my personal hate list. That accolade would probably go to income tax, as it tends to be a more visible drain on my bank account. And tax on fuel wasn’t included in the survey, but I guess when you realise that 70% of the cost of petrol is tax,

How about you, what is your least favourite tax? Let us know in the comments below.

photo credit: nic0