MSE Poll: Is it time to revalue Britain’s council tax bands?
in MoneySaving polls
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Former_MSE_Karl Former MSEForumite
Poll started 15 May 2018In England and Scotland your council tax band depends on your home’s value in 1991 (Wales 2005); when the last (and only) valuation was done.
It’s likely 100,000s of homes are in the wrong band as drive-by 'second-gear valuations' were commonplace.
However, redoing it would likely see widespread changes to valuations and risks of some paying substantially more (others less). Is it worth it? Some may argue the whole system should be scrapped, but that’s a different poll. So…
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It would also be better to require councils to offer 10 and 12 monthly payments by direct debit instead of just 10 "because that's what the law says and screw what will help our taxpayers."
Band H is fixed at 18/9ths of a Band D charge, 3 times that of the Band A (6/9ths). I agree that further bands are required above H (and even above the I that was introduced in Scotland)
For England offering payment over 12 instalments is a statutory requirement (although there is nothing to say that they have to allow so by DD). Scotland and Wales are unlikely to be forced in to any instalment schemes and any changes fall under their devolved powers.
Even things like the location dictated the band. So now you have daft things like 3 bed houses in Band A because they were in a run-down area and had no indoor bathrooms, being done up and the area becoming sought after.
I also agree that several bands above H are required.
Further bands are also badly needed at the bottom end of the scale. In some northern towns and cities around two thirds of all properties are band A. This means council tax operates like the hated Poll Tax (Community Charge) where almost everyone pays the same amount.
Band A now contains properties that are STILL selling for around £40,000 and also properties that were valued at £39,500 in 1991 and now sell for over £180,000. Would you be happy that someone with a house worth 4.5x the value of yours pays the same amount of council tax?
Large households with several earners would have paid their fair share of the associated costs - unlike now, when those large households pay no more than two adults pay.
Second best would be a cap set to ensure that no one pays more than a set percentage (say 8 or 10%) of their take home pay or income on council tax. A cap is also needed to ensure that those whose income is below a certain level are exempt. For example ESA £6,000/ year. These people are supposed to be non tax payers but the government is shifting the collection of tax from Income tax and NI to Council tax so those with the lowest incomes are hit the hardest. The burden of tax is moving from the tax payer to the non tax payer, and non tax payers are usually non tax payers because they have a low income.
There are other inequalities that need ironing out too. For example single occupiers should receive a 50% discount not 25%, currently they are subsiding everyone else. And those with certain mental health problems are currently exempt from having to pay as they are unable earn an income yet those with physical health problems so also not able to work or earn an income do have to pay, without any discount. That's unfair. This can easily mean loosing £1,000 (band A) or more for higher bands from a benefit of under £6,000 to start with.
Lastly everyone within a local council district should pay the same. Currently the system is again deeply unfair, even laughable. The amount charged depends where parish boundaries fall and as towns and villages have grown over the years that often means that neighbours can be paying significantly different amounts for the same services. Differences can easily be £140 or more for people who share the same town and facilities. This needs to change. Theresa May keeps saying her election mantra of 'A fairer Britain that works for all' so where is it and how is she doing it |? Benefits frozen since 2014 whilst living costs rise, council tax up etc etc etc. Just words Theresa.
I don't see the point in going to the time and expense of property revaluation for council tax when fundamentally it seems such a dubious system for the basis of a local council budget.
Given that property prices will have all risen since 1991 then if we revalue properties but don't change the boundaries for banding, all that will happen is that everyone will see their council tax band increase by similar amounts. We wouldn't accept that Councils should charge every single household more just because of a property revaluation, so they would need to muck about with the amounts that they actually charge to try and ensure a broadly neutral impact of the measure. This would just be a big waste of time and money as would dealing with the flood of appeals which would invariably follow.
I would rather see the money/effort put into identifying a credible alternative system for funding local councils.
The link between the nominal value of the house and the occupants ability to pay is loose, outdated and massively distorted by the housing market in many areas. My house is worth 4x what it was when I bought it - has my salary improved 4 times? No. Have the services provided by the council improved 4x? Hell No!
Local Income Tax might work - if it's transparent and has a link to both the services provided/consumed. Which would in turn create a better turnout at local elections.
Any change in our council tax bills is not going to reduce our outgoings for anyone.
The only change I would want to see is one where the million pound houses etc have new, higher council tax charges made - that would be fair but it won't happen will it.