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What is council tax and how much is it going up? What is council tax and how much is it going up in April?
(25 days later)
Council tax bills are set to rise for millions of households in England, Scotland and Wales in April. Council tax bills will rise for millions of households on 1 April.
The government is increasing the amount of money it gives to councils in England in 2025-26. Council finances are "extremely challenging" and there could be further cuts to services, the Local Government Association has warned.
But the Local Government Association says council finances remain "extremely challenging", and warned there could be further cuts to services.
What is council tax and who pays it?What is council tax and who pays it?
Council tax is a compulsory charge on properties in England, Scotland and Wales. It is set by local authorities to raise money for providing services. Council tax is a compulsory charge on properties in England, Scotland and Wales.
It is set by local authorities to raise money for providing services.
Typically, anyone who is over 18 and owns or rents a home has to pay council tax.Typically, anyone who is over 18 and owns or rents a home has to pay council tax.
However, there are some exemptions and discounts.However, there are some exemptions and discounts.
Someone living alone, for example, is entitled to a 25% reduction, external. Someone living alone, for example, is entitled to a 25% reduction, external, and properties occupied only by students are exempt.
Properties occupied only by students are exempt.
Some discounts are available if you - or someone you live with - has a disability, external.Some discounts are available if you - or someone you live with - has a disability, external.
Most people pay in 10 monthly instalments from April onwards, and then pay nothing in February and March.
Northern Ireland uses a domestic rates system, external instead of council tax.Northern Ireland uses a domestic rates system, external instead of council tax.
How much are council tax bills going up in April? How much are council tax bills going up in England?
Councils in England with responsibility for delivering social care can increase council tax every year by up to 4.99% without triggering a referendum, or local vote. Smaller councils without social care duties can increase bills by up to 2.99%. Most councils in England will put bills up by the maximum amount allowed, the County Councils Network said.
For 2025-26, the government is letting six areas bypass the 4.99% cap. That's 4.99% (without triggering a referendum) for those with responsibility for social care.
Bradford Council will be allowed a 10% increase, while Newham and Windsor and Maidenhead can both implement a 9% rise. All but three of London's local authorities are putting up bills by 4.99%.
Birmingham, Somerset and Trafford can put bills up by 7.5%. Smaller councils without social care duties can increase bills by up to 2.99%.
Several councils were not given permission to impose larger increases, including Hampshire, which had asked for a 15% rise. For 2025-26, the government is letting six areas introduce bigger rises.
Most other councils have yet to set out their full plans for 2025-26, but the County Councils Network predicts that 93% of its members will introduce the maximum permitted increase, external in April 2025. Bradford Council will increase bills by 10% and they will rise by 9% in Newham, and Windsor and Maidenhead.
Birmingham, Somerset and Trafford are putting bills up by 7.5%.
In April 2024, the average increase for a band D property in England was £106, external, which took the average bill to £2,171.In April 2024, the average increase for a band D property in England was £106, external, which took the average bill to £2,171.
Council tax rates in Scotland have been frozen or had limited increases since 2007, but they are expected to go up in April, in some cases by as much as 10%. The towns where you pay £300 more in council tax
The country's 32 councils have warned they faced a potential shortfall of £392m in 2025-26 - which could rise to £780m the following year. What is happening to council tax in Scotland and Wales?
The Scottish government says it is offering local authorities an extra £1bn in 2025-26 to help reduce the scale of any rise. Council tax rates in Scotland have been frozen or had limited increases since 2007, but will go up in April. Bills will rise by at least 10% in 13 areas.
Council tax rates in Wales are also expected to rise in April. Wales' 22 local authorities were given £253m by Welsh ministers in December's draft budget, but council leaders said more money is needed. The country's 32 councils have warned they faced a potential shortfall of £392m in 2025-26, which could rise to £780m the following year.
The Welsh Local Government Association previously estimated that councils were facing a £560m funding gap. The Scottish government says it is giving councils an extra £1bn in 2025-26 to help limit increases.
Council tax rates in Wales are increasing by between 5% and 9.2% in April.
Wales' 22 local authorities were given £253m in December's draft budget, but council leaders said more was needed.
How is council tax calculated?How is council tax calculated?
How much you pay depends on your property's council tax band. The more expensive the property, the higher the band. How much you pay depends on your property's council tax band. Broadly speaking, the more expensive the property, the higher the band.
In England and Scotland, bands are based on the price the property would have sold for in 1991, while in Wales the base year is 2003. Northern Ireland's system uses 2005 prices. In England and Scotland, bands are based on the price the property would have sold for in 1991. Wales uses 2003 prices and Northern Ireland 2005 prices.
You can check your home's band in:You can check your home's band in:
England and Wales, externalEngland and Wales, external
Scotland, externalScotland, external
Northern Ireland, externalNorthern Ireland, external
Council tax bills also include additional charges - called levies - which pay for other services. Council tax bills also include additional charges.
One goes towards the cost of care homes and other adult social care services. Another is set by local police and fire authorities to help fund their work.One goes towards the cost of care homes and other adult social care services. Another is set by local police and fire authorities to help fund their work.
Some cities with mayors, such as London and Manchester, can also add a separate levy that covers funding other services. Some cities with mayors, such as London and Manchester, can also add a separate charges for other services.
The Northern Ireland Assembly has proposed changing its domestic rate system to increase the amount paid by higher value homes from April 2025.
What does council tax pay for?What does council tax pay for?
Council tax funds local services, including:Council tax funds local services, including:
rubbish collectionrubbish collection
street lightingstreet lighting
librarieslibraries
police and fire servicespolice and fire services
youth clubsyouth clubs
parks and recreation facilitiesparks and recreation facilities
care servicescare services
In 2023-24, 61% of council spending went on children's services and adult social care, external, up from 52% in 2013-14.
Council tax helps to fund local services such as playgroundsCouncil tax helps to fund local services such as playgrounds
Analysis by the Local Government Association (LGA) found that increased demand and rising costs meant 61% of council spending in 2023-24 went on children's services and adult social care, external - up from 52% in 2013-14.
This has reduced the amount of money available for other services.
Where else do councils get their money?Where else do councils get their money?
About half of local authority funding comes from council tax,, external according to the Institute for Government (IFG). About half of local authority funding comes from council tax, according to the Institute for Government (IFG).
Councils in England can also raise some income by charging for services including parking, swimming pools, planning applications, and from commercial investments. Councils in England can also raise money by charging for services including parking, swimming pools and planning applications.
Most of the rest comes from a combination of business rates and central government grants.Most of the rest comes from a combination of business rates and central government grants.
Labour has promised £2bn of central government funding for English councils in the year from April 2025, an extra £700m on top of the £1.3bn announced in October's Budget.Labour has promised £2bn of central government funding for English councils in the year from April 2025, an extra £700m on top of the £1.3bn announced in October's Budget.
But £515m of that has already been earmarked to offset the rise in employers' National Insurance (NI) contributions which also takes effect in April. But £515m of that has already been earmarked to pay for higher National Insurance (NI) contributions from April.
Separately, the government is consulting on directing more money to deprived councils in England from 2026, as part of a wider shake-up of council financing. Councils have also had to deal with inflation, higher energy costs and increases to the National Living Wage.
According to the IFG, central government funding for local authorities in England fell by 10.2% between 2009-10 and 2021-22, external. The government is consulting on directing more money to deprived councils in England from 2026.
At the same time, councils have had to deal with inflation, higher energy costs and increases to the National Living Wage. When and where are the May local elections and who can vote?
Councils fear the local is being taken out of local government
Council shake-up sees elections delayed in nine areas
What happens when a council goes 'bankrupt'?What happens when a council goes 'bankrupt'?
Councils cannot technically go bankrupt, but if they cannot balance the budget for the financial year, they can issue what is called a section 114 notice., external Councils cannot technically go bankrupt, but if they cannot balance their budget for the financial year, they can issue what is called a section 114 notice., external
This means they cannot commit to most new spending, and residents could see cuts to services, such as reducing the number of bin collections or dimming streetlights. This means they cannot commit to most new spending, and residents could see reduced services, such as fewer bin collections or cuts to libraries.
Before 2018, only two councils had issued a section 114. Twelve have been issued since, external. Before 2018, only two councils had issued a section 114. Twelve have been issued since.
Birmingham City Council went bust in 2023, with a £760m black hole. It followed Woking Council, Thurrock and Croydon (for the third time).Birmingham City Council went bust in 2023, with a £760m black hole. It followed Woking Council, Thurrock and Croydon (for the third time).
Research by the LGA in 2024 found that one in four English councils said they were in danger of going bust in 2025-26 or 2026-27, external. A number of local authorities in England have not issued section 114 notices but are receiving so-called "exceptional financial support", external to help manage their budgets.
A number of authorities in England have not issued section 114 notices but are receiving so-called "exceptional financial support", external to help manage their budgets. Middlesbrough Council is one of 19 authorities allowed to borrow money to fund day-to-day spending in 2024-25.
Middlesbrough Council, for example, is one of 19 authorities that was given permission to borrow money to fund day-to-day spending in 2024-25.
Why do councils go bust and what happens when they do?Why do councils go bust and what happens when they do?
Vital services or financial ruin? England's town hall dilemma
What happens if you cannot pay your council tax?
Do not just stop paying - councils may take legal action to reclaim the money.
Instead, contact the council and explain the situation, Citizens Advice suggests., external
You might be able to pay less council tax or not pay it at all depending on your circumstances.
Which debts and bills should I pay first?