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Council tax spending: The breakdown

by Madaline Dunn

With news that council tax will be hiked by nearly 5% in some places across the country, it’s likely that you’ll be wanting to gain insight into what exactly your money goes toward and a breakdown of what is spent on what.

At The Salary Calculator, we’ve done the hard work for you, so you can understand more about your council tax bill. Below we’ll walk you through:

• The different council tax bands and how they’re calculated
• Where your money goes
• Which councils charge the most and the least
• How to check you’re in the right council tax band

Council tax bands

Council tax bands are calculated differently in England, Scotland, Wales and Northern Ireland, but in England, Scotland and Wales, there are between eight and nine Council Tax property value bands. In England and Scotland, A is the lowest and H is the highest, while Band D represents the midpoint of a “typical family home.” In Wales, however, properties are categorised into nine bands, from 1 (the highest) to 9 (the lowest).

Properties in England, for example, are categorised based on the price they would have sold for in April 1991. The same goes for Scotland, but in Wales, it’s slightly different, because the bands were revalued in 2003; as such, council tax bands are determined by the price a house would have sold for in April 2003.

Northern Ireland also has a different system; and while it doesn’t use council tax bands, it switched to a modified system of domestic rates, which is based on the capital value of individual properties. Under this system, to work out the ‘domestic rate poundage’ for your council area, the rateable capital value of your property is multiplied by the domestic regional rate and domestic district rate added together.

In England, the council tax bands are as follows:

• A up to £40,000
• B £40,001 to £52,000
• C £52,001 to £68,000
• D £68,001 to £88,000
• E £88,001 to £120,000
• F £120,001 to £160,000
• G £160,001 to £320,000
• H more than £320,000

In Wales, the council tax bands are:

• A up to £44,000
• B £44,001 to £65,000
• C £65,001 to £91,000
• D £91,001 to £123,000
• E £123,001 to £162,000
• F £162,001 to £223,000
• G £223,001 to £324,000
• H £324,001 to £424,000
• I more than £424,000

Where your council tax is spent

A few years ago, the Local Government Association analysed UK-wide data on council tax spending and projected that in 2019/2020, council tax would be spent on the following:

• 57p of each £1 would go to social care
• 8p would go to highways and public transport
• 8p would go to education support
• 8p of each pound would go to homelessness and planning
• 7p would go toward waste management and street cleaning
• 7p would also go to licensing, elections, trading standards
• 5p would go to museums, parks, libraries

Different councils will have different priorities when it comes to spending council tax, and a more updated, regional breakdown shows quite a bit of diversity. Below we’ve picked some councils from across the country to demonstrate this.

At Malvern District Council, for example, council tax is paid to five different organisations:

• For every pound you pay in Malvern, 70.4p is allocated to Worcestershire County Council, which goes toward adult social care, looking after children, road and path maintenance, libraries and waste disposal,
• 12.6p in each pound paid goes to the West Mercia Police and Crime Commissioner for crime and safeguarding,
• 8.7p stays with the district council to fund services such as waste and recycling collections, housing, parks, public toilets, and elections.
• 4.5p goes to Hereford & Worcester Fire and Rescue Service for fires and major emergencies,
• 3.8p in every pound goes to the town or parish council, for parks and playgrounds, cemeteries, bus shelters, etc.

Similarly, through Ealing Council, children’s and adults’ social care services are where most of the money is distributed, making up 60p in each pound of the council’s spending.

Elsewhere, Bath & North East Somerset Council’s spends:

• Adult Social Services: 48.9p,
• Children’s Services: 27.4p,
• Refuse Collection & Disposal: 12.1p,
• Highways, Transport, Planning & Economic Development: 8.8p,
• Housing & Public Protection: 5.6p.

In Uttlesford District Council, meanwhile, money is distributed as follows:

• 71p goes to Essex County Council,
• 11p goes to the Police, Fire & Crime Commissioner – Policing and community safety,
• 9p goes to Uttlesford District Council,
• 5p goes (on average) to town and parish councils,
• 4p goes to the Police, Fire & Crime Commissioner – Fire & Rescue Authority.

Dartford Borough Council spends council tax on the following:

• 74p to Kent County Council, for education, social services, adult social care, etc.,
• 9p to Dartford Borough Council, to pay for community and housing, refuse collection and recycling, environmental services, etc.,
• 11p to The Police and Crime Commissioner for Kent for crime and protection services,
• 4p to Kent and Medway Fire and Rescue Authority for fire and other emergency services,
• 2p to Town and Parish Councils (on average) for maintaining: allotments, common lands, burial grounds, play areas, etc.

Interestingly, in North Herts, the majority of your pound goes to waste collection and street cleaning. The spending figures are as follows:

• Waste collection and street cleaning – 41p,
• Parks and green spaces – 23p,
• Environmental health – 11p,
• North Herts Museum and Hitchin Town Hall – 9p,
• Housing advice and homelessness support – 9p,
• Community safety and environmental crime – 4p,
• Grants to community organisations, including area committee grants – 3p.

Council tax bills and spending comparison

As explained above, council tax bills and spending vary depending on where you’re situated within the UK, however, according to government council tax figures, the average council tax of a Band D property set by local authorities across England is £1,966. In London, however, the average Band D property is £1,684 a year.

Below we compare what some of the different councils in the UK are charging.

According to the latest figures, Pembroke council has the lowest council tax, ‘Band D’, in Wales for 2022-23 at £1,249.17. Meanwhile, the most expensive council tax band is Rutland County Council in the East Midlands, at £2,300 a year. Westminster, comparatively, has the lowest bills in England, with Band D homes set to pay around £920 a year with the latest hike, which is still less than half the average in England.

Check you’re in the right council tax band

Due to the way that homes were valued back in 1991, experts believe thousands are in the wrong band. So, it’s definitely worth checking.

You can do this by first checking with your neighbours’ council tax bands. And don’t worry, there’ll be no awkwardness because you don’t have to check with them directly; by using either, Gov.uk (in England) and Scottish Assessors’ Association (SAA)(in Scotland), you can find all the information you need. If your neighbours are in different bands, this could mean that you have a cause – but beware, it could go either way – neighbours’ bands could increase in line with your own. That’s why it’s important to do a valuation check – check out this free house price valuations guide, to find the tool that works best for you.

Once you’ve gathered the above information, passed the point of speculation, and done sufficient research, you can reach out directly to the Valuation Office Agency (VOA), or the Scottish Assessors’ Association (SAA) in Scotland. It’s worth bearing in mind that a formal challenge can only be launched if you’ve resided in the property for six months or less. Likewise, if your request is rejected, you have three months to appeal to the Valuation Tribunal.

Tags: council tax, council tax bands, Economy, taxes

The new tax year: Changes and preparations for April 2022

by Madaline Dunn

The new tax year is almost upon us, and a number of changes are coming into effect in April 2022. These changes could hit you in the pocket, so there may be some preparations you may need to make to ensure you’re ready.

From council tax, car tax, pensions and tax codes, make sure you’ve got your finger on the pulse this April. At The Salary Calculator, we’ll walk you through:

• What is staying the same
• Incoming changes to council tax
• The new changes coming in for car tax
• What’s happening with pensions
• What to check before 5th April
• How to work out any changes to your taxes

What will stay the same in the new tax year?

Although the new tax year often brings in changes to the amount of tax people pay, as per Chancellor Rishi Sunak’s budget, there will be a number of freezes rather than cuts.

Income tax is frozen for this year and will remain that way until 2026. So, the threshold of £12,570 will stay the same, as well as the basic rate tax of 20%, which you will pay on any earnings over that amount up to £50,270. While this may sound positive at first, according to the Centre for Economics and Business Research (CEBR), over nine million workers will pay more as a result.

However, the situation in Scotland is different, as a devolved nation, there are different rates and thresholds when it comes to income tax. Any changes can be viewed here on the Scottish government website.

Capital gains tax which people pay when they make a profit on assets such as a buy to let property, and the allowance on this tax, which is set at £12,300 is also being frozen until 2026.

What changes are coming for council tax?

In February, Chancellor Rishi Sunak announced that roughly 20 million households in council tax bands A to D in England will be impacted by a £3bn council tax rebate. According to the government, this includes 95% of rented properties and the rebate does not have to be repaid.

The same kind of scheme is going ahead in both Scotland and Wales, with the former offering a £150 council tax rebate.

According to the Local Government Association (LGA), those eligible should set up a direct debit to speed up the process. Cllr Shaun Davies, LGA’s Resources Board chairman, outlined that without taking that step, it could “take longer.” This is because the local council will have to reach out first and then individuals will have to make a claim themselves.

While those living in bands E to H in England and Scotland won’t be eligible, you can check your eligibility by visiting the government website.

What changes will come into effect for car tax?

Car tax, otherwise known as Vehicle Excise Duty (VED), is increasing in April, and the amount you pay will depend on a few factors, including how old your vehicle is and the amount of emissions it produces.

To work out how your vehicle will be affected by the new changes, head over here, where you’ll be able to work out if you’ll encounter any increases.

What’s ahead for pensions

When it comes to the changes in store for pensions, there has been a suspension of the triple lock and instead, a new double lock is being temporarily introduced.

As per the triple lock, the state pension rises in line with the highest of the following three measures every year:

• A flat 2.5% rise
• Average earnings growth
• Inflation

It also applied to both the basic state pension and the new state pension. That said, the new double lock means that for 2022-23, the state pension will either rise by 2.5% or the inflation rate, which will, according to the government, last until 2023-24.

What to look out for this April

As the new tax year approaches, experts warn that people should lookout for a number of things.

The first thing to check is your tax code. While the most common tax code for the tax year 2021/22 and 2022/23 is 1257L, which will not change until 2026, it’s your responsibility to check that you’re not using the wrong one. Through checking if your tax code is correct, you’ll also be able to review whether you are owed money from HMRC or owe money.

As recently covered by The Salary Calculator, NI contributions will go up in April, too, so make sure you’re up-to-date with how the upcoming NI contribution changes will affect you.

Likewise, it has been advised that those who had to work from home during the 2020 lockdown or during the 2021/22 financial year to claim should review their entitlement to tax relief. This can be worth up to £125 from HMRC, and people are being encouraged to check what they’re owed before April 5, which could see the introduction of a rule change on claiming to work from home tax allowance.

How to work out any changes to your taxes

It’s always best to prepare for what’s in store, and if you want to check out how your finances will be affected by the upcoming changes in April, head over to The Salary Calculator, where you’ll be able to work out your take-home pay.

Tags: 2022, car tax, income tax, New tax year, Pensions, taxes