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What is council tax and how much did it go up in April? How is council tax calculated and how much could it go up?
(2 months later)
Council tax bills rose rise for millions of households in England, Scotland and Wales on 1 April. The government expects council tax in England to rise by the maximum amount every year until 2029, according to a leading economic think tank.
Council finances are "extremely challenging" and there could be further cuts to services, the Local Government Association has warned. The IFS says a "big chunk" of the funding for local authorities which was set out in the government's Spending Review assumes bills will rise by just under 5% in April 2026, 2027 and 2028.
LIVE: Council tax and energy bills rise, but minister says minimum wage and pension increases will help Most councils in England put council tax up by the maximum amount in April 2025, and average bills also rose in Wales and Scotland.
Three ways to cushion the blow of bill rises What is council tax for 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, external.
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 to residents, including:
It is set by local authorities to raise money for providing services. rubbish collection
street lighting
libraries
police and fire services
youth clubs
parks and recreation facilities
care 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, and properties occupied only by students are exempt. Someone living alone, for example, is entitled to a 25% reduction, external, and properties occupied only by students are completely 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.
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 England? What is expected to happen to council tax in 2026?
Most councils in England were expected to put bills up by the maximum amount allowed, the County Councils Network said. Councils with responsibility for social care can increase bills every year by 4.99% without having to hold a referendum or get approval from central government.
That's 4.99% (without triggering a referendum) for those with responsibility for social care.
All but three of London's local authorities are putting up bills by 4.99%.
Smaller councils without social care duties can increase bills by up to 2.99%.Smaller councils without social care duties can increase bills by up to 2.99%.
For 2025-26, the government is letting six areas introduce bigger rises. Documents about police funding released as part of the government's Spending Review assume councils in England will put bills up by the maximum amount every year during the period covered by the calculations.
Bradford Council increased bills by 10% and they rose by 9% in Newham, and Windsor and Maidenhead. IFS director Paul Johnson said that this would mean bills were set to rise "at their fastest rate over any Parliament since 2001-05".
Chancellor Rachel Reeves said there had been no change to the cap rules, which were introduced by the previous Conservative government.
"It is a cap, councils don't have to increase council tax by 5%," she told BBC Breakfast.
But the Local Government Association said council budgets were under "severe financial pressure", and services may have to be cut even if bills do rise by the maximum.
Council tax expected to rise by 5% a year
Seven ways the Spending Review will affect you
How much did council tax go up in April 2025?
Of the 384 councils in England subject to the referendum rules, 294 (77%) put bills up by the maximum amount.
Another 56 (15%) were close to the limit. Eight authorities (2%) either made no change or reduced bills.
The government let six areas introduce bigger rises to help deal with funding pressures.
Bradford Council increased bills by 10% while they rose by 9% in Windsor and Maidenhead, and in Newham.
Birmingham, Somerset and Trafford put bills up by 7.5%.Birmingham, Somerset and Trafford put 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. A number of other councils were not allowed to put up bills by more than the standard maximum, including Hampshire, which had asked for a 15% uplift.
The towns where you pay £300 more in council tax It means the average Band D council tax bill in England for 2025-26 is £2,280, which is an increase of £109 or 5% on the 2024-25 figure of £2,171.
What is happening to council tax in Scotland and Wales? What happened to council tax in Scotland and Wales?
Council tax rates in Scotland had been frozen or had limited increases since 2007, but went up in April. Bills rose by at least 10% in 13 areas. Council tax rates in Scotland had been frozen or had limited increases since 2007, but went up in April. Bills rose by an average of 9.6% in April, with increases of at least 10% in 13 areas.
The country's 32 councils had warned they faced a potential shortfall of £392m in 2025-26, which could rise to £780m the following year. It means the average Band D council tax bill in Scotland for 2025-26 is £1,543, up from £1,418 in 2024-25.
The Scottish government says it is giving councils an extra £1bn in 2025-26 to help limit increases. The country's 32 councils had warned that they faced a potential shortfall of £392m in 2025-26, which could rise to £780m the following year.
Council tax rates in Wales increased by between 5% and 9.2% in April. The Scottish government said it was giving councils an extra £1bn in 2025-26 to help limit increases.
Wales' 22 local authorities were given £253m in December's draft budget, but council leaders said more was needed. Why are Scottish councils so short of cash when tax is going up?
Council tax rates in Wales increased by an average of 7.2% in April.
It means the average Band D council tax bill in Wales for 2025-26 is £2,170, up from £2,024 in 2025-25.
Wales' 22 local authorities had been given £253m in December to help reduce increases, 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. Broadly speaking, 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. Wales uses 2003 prices and Northern Ireland 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.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. These are used to fund 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 charges for other services.Some cities with mayors, such as London and Manchester, can also add a separate charges for other services.
What does council tax pay for? Councils which provide social care services can increase council tax by a larger amount
Council tax funds local services, including:
rubbish collection
street lighting
libraries
police and fire services
youth clubs
parks and recreation facilities
care 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 playgrounds
Where else do councils get their money?Where else do councils get their money?
About half of local authority funding comes from council tax, 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 money by charging for services including parking, swimming pools and planning applications.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 had 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 pay for higher National Insurance (NI) contributions from April. But £515m of that was earmarked to pay for higher National Insurance (NI) contributions from April.
Councils have also had to deal with inflation, higher energy costs and increases to the National Living Wage. The local government settlement in the Spending Review provides an additional £3.3bn for local authorities in 2028-29 compared with 2023-24.
The government is consulting on directing more money to deprived councils in England from 2026. The Spending Review also revealed revealed the Ministry of Housing, Communities and Local Government would see a 1.4% cut in its day-to-day budget.
When and where are the May local elections and who can vote? But the government said councils' "core spending power" would still go up, if they increased council tax by the maximum amount.
Separately the government is consulting on directing more money to deprived councils in England from 2026.
What happens when a council goes 'bankrupt'?What happens when a council goes 'bankrupt'?
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 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 reduced services, such as fewer bin collections or cuts to libraries.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.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).
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 local 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 was one of 19 authorities allowed 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?