Paying Council Tax in Twelve Monthly Instalments

littleowl

hodgester wrote: »

okay, i'll try again.if people pay their council tax over 12 months then the councils borrow more money to pay the government. more interest is paid and this is paid for from either capital reserves or the spending budget. to ensure that the council does not become insolvent or have to cut services still further, council tax increases,in part, to meet the difference.

You can perceive this anyway you like but it is the facts of life regarding why most councils require you to pay over 10 months. However, I'll leave you to your conspiracy theories.....

If I pay CT over 10 months I am paying the last two months in advance. If my pension were to be paid in the same way then I would have no objection but it is not. It is paid each month of the year and I see no reason why CT should not be paid each month of the year too - ie one month in advance each time (pension is paid one month in arrear by the way).

If paying over 12 months instead of 10 puts the Council in a serious financial deficit then I would suggest that is bad management. Most of the populaton budgets monthly so why should Councils expect to gain by being paid for two months in advance by everyone? It is a nonsense.

hodgester

littleowl wrote: »

If paying over 12 months instead of 10 puts the Council in a serious financial deficit then I would suggest that is bad management. Most of the population budgets monthly so why should Councils expect to gain by being paid for two months in advance by everyone? It is a nonsense.

the government expects the money paid to them in ten installments so therefore if the population pays it over 12 there is a shortfall between what the council receives and what it owes every month and there becomes a borrowing requirement. This means paying interest, which is eventually paid for by you the following year. No 'nonsense' in that, just simple economics.

the problem with changing local taxation from poll tax to council tax is that people assume it's a local authority tax which it isn't, it's a central government tax collected on their behalf by the local authority. personally i'd just prefer scrapping it and adding 3 or 4p on income tax, even if it did cost me my job. At least then people would see clearly who is taxing them. The cost of collection would reduce dramatically as well as all it would require is figure revision from the Inland Revenue.

Anyway I can see I can't convince any of you of the facts , based on 19 years involvement in local authority finance management so i'll bid you all good day from this thread

hodgester

wolvoman wrote: »

Ok perhaps not as a lump sum but try this.

I pay income tax each month as PAYE, for 12 months. Why can't I pay council tax this way? Why am I giving my council an extra 2 months to sit on MY money?

ok wolvoman lets try this allegorical equation, for the sake of making everything clear

person b wants to borrow some monry from a very nice bank which doesn't charge interest but they can't get a loan because of a poor credit rating. you (person A) agree to get the loan on their behalf.

The loan is for 1000 GBP over 10 months so each payment is 100GBP

After the loan is agreed and in place, person b says to you oh i can only pay it back over 12 months. therefore each month, they will pay you 83.33 GBP per month and you need to pay the bank 16.67 GBP out of your own pocket for the next 10 months and then you will receive the shortfall later. But from your budget you don't have a spare 16.67 so you need to see another bank to borrow the shortfall. This bank will charge you interest every day until you next get paid. You therefore are out of pocket and even when you finally get the two months extra cash in months 11 & 12 will still be out of pocket, due to the interest paid.

Far from sitting on extra money you have lost money so when person b comes and asks you to help him the next year, you will charge him extra to cover your losses.

Now multiply that by 11,000 and you see where the problems occur?

wolvoman

hodgester wrote: »

ok wolvoman lets try this allegorical equation, for the sake of making everything clear

person b wants to borrow some monry from a very nice bank which doesn't charge interest but they can't get a loan because of a poor credit rating. you (person A) agree to get the loan on their behalf.

The loan is for 1000 GBP over 10 months so each payment is 100GBP

After the loan is agreed and in place, person b says to you oh i can only pay it back over 12 months. therefore each month, they will pay you 83.33 GBP per month and you need to pay the bank 16.67 GBP out of your own pocket for the next 10 months and then you will receive the shortfall later. But from your budget you don't have a spare 16.67 so you need to see another bank to borrow the shortfall. This bank will charge you interest every day until you next get paid. You therefore are out of pocket and even when you finally get the two months extra cash in months 11 & 12 will still be out of pocket, due to the interest paid.

Far from sitting on extra money you have lost money so when person b comes and asks you to help him the next year, you will charge him extra to cover your losses.

Now multiply that by 11,000 and you see where the problems occur?

You make a good argument but fail to realise that as the council taxpayer, I am the customer and it is not my concern how the council arranges its finances.

hodgester

but when your council tax goes up you are concerned? surely.....?

seven-day-weekend

My Council have just sent the demand with a twelve-month payment schedule without anyone asking...!

I think the reason probably is: The Council Tax is the liability of my son who lives in the house. Last April 2007 when the demand came through he was out of work amd didn't have to pay any. The he got a job and the Council had to revise the bill halfway through the year and gave him until March 2008 to pay.

I think they have just carried that on, but we are not going to argue about it!