Council tax
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The Council Tax is the main form of local taxation in England, Scotland and Wales. It is paid by residents to the local authority. It was introduced in 1993 (by way of the Local Government Finance Act, 1992) as a successor to the unpopular Community Charge or Poll Tax, introduced in 1989 in Scotland and in 1990 in England and Wales.
The base for the tax is residential property. Each dwelling is allocated to one of eight bands coded by letters A through H on the basis of its assumed capital value (as of 1 April 1991). Each local authority sets a tax rate expressed as the annual levy on a Band D property inhabited by two liable adults. This decision automatically sets the amounts levied on all types of households and dwellings.
2005 will see the first revaluations since 1991 of property in England and Scotland for council tax purposes. Bills based on the new valuations wll be issued in 2007. In Wales, tax bills based on the property revaluations done using 2003 prices were issued in 2005. Because of the surge in house prices over the late 1990s and early 2000s, more than a third of properties in Wales found themselves in a band higher than under the 1991 valuation. Some properties were moved up 3 or even 4 bands with consequent huge increases in the amount of council tax demanded. Some properties were moved into new band I at the top of the price range.
Although it is the only tax which is set by local government, the Council Tax contributes only a small proportion (25%, on average) of local government revenue. The majority comes from central government grants and from business rates which are collected centrally and redistributed to local authorities.
Council Tax is divided into a number of components. Depending upon where the dweller lives, there can be a separate charge made by the Greater London Authority, County Councils, Police Authorities, Fire Authorities, Transport Authorities, National Park Authority, District Councils, Scottish Water and Civil Parishes. These may all set their precepts independently.
- Note: Northern Ireland still levies rates, the system of local taxation used in the rest of the United Kingdom before the implementation of the Community Charge. The Government is considering using N. Ireland for a pilot project to replace council tax with a property "wealth tax" based on an annual charge of 0.78% of the value of the property. Such property valuations would be updated every 5 years.
External links
- Council Tax (http://www.voa.gov.uk/council_tax/index.htm), from the Valuations Office Agency
- IsItFair - the UK Council Tax Protest Group (http://www.isitfair.co.uk)