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Council Tax

Do You Have to Pay Council Tax?

30 July 2020 Simon Banks Read time: 3 min
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Simon Banks

Bills are inescapable, which means you might as well get a hold on what needs paying and when it’s due. A few bills need paying around the home, from utilities like gas and electricity to your speedy (or not so fast) broadband. But what about council tax?

Council tax is one of those bills you never really read much about, and you certainly won’t find it on a comparison website that helps you minimise your monthly outgoings. That’s because council tax is set by the local council, with every household in the UK required to pay it.

So who pays council tax, and just how does it work? In this guide, we’re giving you the lowdown on everything you need to know about council tax. Find out who needs to pay, how it’s calculated, if there are any exemptions and more.

What is council tax, and how is it calculated?

In short, council tax is a local tax determined by the relevant authority. For example, if you live in Canary Wharf, the London Borough of Tower Hamlets is the local council who set the council tax for the E14 postcode.

Council tax is graded by domestic properties and their value in 1991, two years before it replaced the poll tax system. It’s somewhat odd that bands are calculated on prices from nearly 20 years ago, but it is what it is.

Council Tax bands

Based on that value, the property is placed into a council tax band between A and H. A represents the lowest-price council tax and H equates to the highest.

You can check a home’s council tax band easily enough, and the landlord or letting agent will also provide the information to you before you move into the property. Council tax is one of the most paid bills around, with a 97% collection rate.

Who pays council tax?

Either yourself or the landlord pay council tax, but it will probably be your responsibility. Council tax can be paid in one lump sum (the entire April to April council tax year), or it can be paid in monthly instalments, which is the more popular option.

In some cases, landlords provide all-inclusive rental properties where the rent price covers things like council tax and utilities. However, the “all bills included” option isn’t as popular as a regular rental where the renter is responsible for the bills including council tax. And even in some cases where all bills are covered, the landlord may still require the renter to pay.

Before you move in somewhere, you should determine whether bills are included in the monthly rental figure. Look at the listing to see if there’s any indication that you won’t have to pay bills or ask the letting agent or landlord. As a rule of thumb, however, it’s more likely than not that you will need to pay council tax.

What if you’re living in a house share?

If you’re living by yourself, then it’s likely that you will be responsible for the council tax. But what happens in a house share or home of multiple occupations? The short answer is that everyone pays an equal share.

House share

Unlike utility bills, where the bill is addressed to one person, council tax can be billed to everyone living under the same roof. That means that everyone pays the same amount, with the overall figure split evenly between the property occupants.

Are there any council tax discounts?

Not everyone has to pay council tax, and some exemptions mean you can get a discount or one need to pay anything. If you live in a property by yourself, you are automatically given a 25% discount on the annual bill.

Some council tax exemptions and discounts include:

  • Anyone under the age of 17
  • Full-time students who qualify for a UK course of education
  • Young people on government training schemes or apprentices
  • Care workers

You can check if you’re eligible for a council tax deduction or exemption by checking and applying on the government’s official website. A council tax exemption or deduction can come in handy and help you save money in your home.

Council tax clarity

Paying council tax is something you should expect to do when living in a home, whether renting or buying. There are some cases where the landlord may pay it for you and include it in the rent, but you’re still paying its worth, just not to the council.

And if you're unsure about who pays pays council tax in your home, you should check with the letting agent or landlord and ensure a smooth move-in where you know which bills you're liable to pay.  

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