Local councils say austerity cuts to their budgets is the reason people are going to have to fork out an extra 4.5 percent every year.
In Britain, people pay taxes to their national government for national stuff like the NHS and the armed forces, and taxes to their local government for local stuff like libraries and rubbish collection. But while the national government has promises to cut its income taxes from next month, local council taxes are getting more expensive. Council tax bills across England are due to rise by 4.5% on average. Households in the North East will now pay around £1,884 a year.
Councils say they need to raise the tax so much because the national government’s austerity programme (i.e. big cuts to how much money it gives to public services) means they don’t have enough money to cover all their bills. A third of the tax increase is earmarked for the police, who now get 19 percent less money from the national government than they did in 2010.
The amount of council tax you pay is supposed to be based on the value of your home. The theory is that richer people live in more expensive houses, so it’s fair that they pay more. But because council tax is based on out-of-date house values from 1991, people in very expensive properties often pay less than those in much cheaper ones. And some renters find it unfair that they are being charged property taxes for a building they don’t own and therefore can’t make any money from.
If councils got more money from the national government, British people might still have to pay more tax. (Governments get most of their money from taxes or borrowing money, and the current UK government doesn’t like going into debt.) Raising income tax, however, would have the benefit of being linked to how much money people are actually earning. Council taxes, in contrast, don’t change if someone loses their job. That might be why they’re now the top reason people get into debt.
Read our explainer on: tax.
