Council Tax in U.K was started in 1993 as the main form of the local taxation process. This tax was collected on the basis of the people's residential property, and, the residents had to pay this tax to the councilor or local authority. The council tax contributes 25% to the local government revenue.
Council Tax Collecting Process:
Since the council tax is collected by the local authorities or councilors, several local departments like fire authorities, district council, Greater London authority, police authority can fix and change the tax amount. So people of different areas will be charged different tax rates. The steps for fixing the amount of tax are:
- The authority of a particular area fixes the total amount, say X, to be charged for that area. It keeps a list, named as valuation list, in which the valuation of all domestic properties are done and kept into a valuation band.
- That fixed amount (i.e X) is then divided by the number of properties belonging to the 'Band C' (i.e between 52,000 to 68,000 pounds) to touch the 'Band C' amount.
- Then the and C amounts for all the areas are taken and added. This total amount determines the total Band C tax bill for the council and then, to fix the tax amount for a property of a particular band a ratio is imposed.
The valuation band is given below. However, in 2007 the UK government has planned to revalue the taxable properties.
- Band A -> Up to 40,000 pounds.
- Band B - > 40,000 pounds - 52,000 pounds.
- Band C –> Between 52,000 pounds - 68,000 pounds
- Band D -> Between 68,000 pounds - 88,000 pounds
- Band E -> Between 88,000 pounds - 120,000 pounds
- Band F - > Between 120,000 pounds - 160,000 pounds
- Band G - > Between 160,000 pounds - 320,000 pounds
- Band H - > Over 320,000 pounds.
Properties Kept Out of The Council Tax:
Many properties have been taken out, temporarily or permanently, of the scope of council tax. These are listed below:
- Properties that have been reoccupied legally.
- Unoccupied agricultural properties and as well as the properties where the members of a religious community is living,
- Properties where the members' age has not exceeded 18,
- Properties that have been used only by the students or mentally crippled people,
- A boat or caravan that is used as residence but remains unoccupied.
Benefits:
People can appeal for the council tax benefit to their local councilor. The councilor may help them to escape from their tax burden. The payment will be done directly to their council tax account. The local authority also gets some fund from the Department of Work and Pensions to run the council tax benefit system.