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Council tax rates to rise from April 2024

In another blow to UK households, Council Tax rates are to rise from April 2024 with an average increase of 5%. Here’s some information about what to expect and how you can potentially save money if you are eligible.

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By Daniel Sharpe-Szunko

Published on: 26 February 2024

5 min read

Council tax rates to rise from April 2024

Another blow to households as Council Tax bills are set to increase by an average of 5% according to reports. The increase will increase our average council tax bill each year by just over £100 in an already tough economy for many families.

The increase is planned in most local authorities in England as the majority are planning to increase by 5%. Councils in Wales are also proposing an increase of between 5% and as much as 10% in some areas, however Scotland have already committed to freeze rates.

In this article, our personal finance experts report on how the new council tax rates will be calculated and how you can potentially save on your council tax bills. You could be eligible for council tax discounts which could save you £1,000s on your annual charges.

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60-Second Summary – Council Tax rates set to increase by £100’s in April 2024

Homeowners and renters in the England and Wales are set to be hit by yet another blow in an already tight financial period. The new Council Tax rise means that rates will increase by around 5% or as much as 10% in some areas of the country.

Here’s some information about what to expect and how you can potentially save money for those who are eligible.

  • Council Tax rates in England and Wales are due to increase by an average of 5% from 1st April 2024 which leaves most households more than £100 per year worse off.
  • Scotland rates will be frozen until April 2025 following an announcement by the Scottish government in October 2023.
  • Local government authorities in England are allowed to raise council tax rates by a maximum of 5% each tax year, so this is is likely to be the maximum rise for many authorities. Any increases more than 5% must be approved by the government.
  • Council Tax discounts can be between 25% and 100% of the rate or payment that is due, including students, families on benefits, single occupancy households and disabled people.

Many councils in England and Wales are talking about an increase to the local authority council tax rate of between 5% in England (the maximum amount) and up to 10% in some areas of Wales.

Annual council tax rate reviews are normal and councils can increase rates by as much as 4.99% in England for councils with social care responsibilities. Increases of more than 5% must request approval from the government or by referendum.

There are four local authorities that have already been granted permission to increase its council tax rates by as much as 10% in 2024. The government has given its permission to Birmingham, Slough, Thurrock and Woking, due to “significant financial failings” according to government reports.

You may recall reading about such financial issues in the national press towards the end of 2023, where reports suggested potential bankruptcy for Birmingham city council.

Read more: The Guardian – Birmingham city council ignored bankruptcy warning signs, says expert

Councils in England are expected to increase by the maximum amount of 5% for the majority of authorities with social care responsibilities. It is suggested that as many as 95% of all councils in England are likely to increase its rates by the full 5%.

Previous years have seen average 3.5% which is an increase of around £60-70 for a typical Band D property.

Local authorities in Wales are also set to be the most affected of all UK countries with increases predicted to be between 4.7% and as much as 9.8% in some areas. Some reports suggest that as many as 16 of the 22 local authorities will increase by this amount, with the 6 remaining yet to make a decision.

The Scottish government announced in October 2023 that it would freeze council tax rates in 2024/2025 for its 2.5 million households. There is to be no increase to council tax rates in the whole of Scotland until April 2025.

Note: Not all councils have finalised plans for the coming years council tax rates and those will be announced in March 2024.

The council tax calculations are extremely complicated as you would probably expect, because of the amount of factors to take in to account. The Valuation Office Agency (VOA) has a full guide which explains how domestic properties are assessed for council tax: Gov.uk – How domestic properties are assessed for Council Tax bands

Local authorities in England for example, are required to follow a set of rules and criteria that gives them a figure to work with. There are also certain exceptions and differences to be applied to certain areas of the country and councils.

Council Tax calculations and rules:

  • Council services which can be split in two with the maximum increase of either 3% or £5 per annum, for local council services.
  • Social care for adults is applicable to around 95% of local authorities where they have a responsibility for providing social care. This can increase by 2% per annum which is combined with council services to allow a maximum of 5% increase in total.
  • Associated costs for local authorities, which can also include emergency services (e.g. police, fire and rescue services) and town or parish council costs.

Note: Council tax in Scotland and Wales are also split in to several areas that are not capped and can increase proportionally.

You could be paying a higher rate or amount of council tax than you need to which can cost households £100’s or even £1,000’s every year.

Here are just a few things that may apply to you and so you should speak to your local council to find out more.

  • Council tax discounts can range from 25% up to 100% for some individuals and those could represent significant savings for your household.
  • Discounts for council tax can vary depending on your local authority and your area, including:

If you feel that you might be eligible for a council tax discount then you should contact your local council immediately to apply for a discount. Certain people (e.g. full time students) will be exempt from council tax payments.

Challenge your council tax band is also an option where you feel that your property has the wrong council tax band applied to it. The video below from Which? explains more about how to challenge your council tax band.

How to challenge your council tax band

According to reports, there are a significant number of homes in England, Scotland and Wales where the incorrect council tax band has been applied to it.

You can request that you council tax band be reassessed by your local authority if you feel that it is not correct.

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