Council tax

How big is it?

How does it work?

Every home sits in a band, and the band determines the bill. The bands are based on what the property was worth on 1 April 1991 in England and Scotland, and 1 April 2003 in Wales. England and Scotland have never revalued. A house built last year is still given a notional 1991 value.

Each band is a fixed multiple of Band D, set in law. Band A pays two-thirds of Band D; the top band pays twice it in England, and slightly more in Scotland and Wales. The ratios are compressed, which is why council tax takes a far larger share of a cheap home’s value than an expensive one’s.

The bill is not one charge. It is several bodies’ charges added together: the council that bills you, often a county council above it, the police and crime commissioner, sometimes a fire authority or a combined authority, and often a parish or community council. Each sets its own precept.

Council tax does not fund most of what your council does. Across England it covers roughly half of council spending; the rest comes from business rates and central government grant. That is why a large cut in council tax would not shrink services by the same proportion, and why a grant cut raises council tax even when the council changes nothing.

Find your own council’s bill for every band on council tax by council, or compare every council on the council map, with each council’s report card of official figures on complaints, finances, audit and services.

How has it changed?

How it got here, and why each change was made:

• 1990The Community Charge, the poll tax, replaces domestic rates: a flat charge per adult regardless of property or income. It triggers mass non-payment and riots.
• 1993Council tax replaces it, deliberately designed as a compromise: property-based like the old rates, but banded and capped so the top band pays only twice the middle one.
• 1991The valuation date England and Scotland still use. Properties are banded on what they were worth that April.
• 2003Wales revalues and adds a ninth band. England plans to do the same, then cancels it in 2005 before the 2005 election. No English revaluation has been attempted since.
• 2013Council Tax Benefit is abolished and replaced by local schemes with less money, so the poorest households in many areas start paying council tax for the first time.
• 2017The adult social care precept lets councils raise bills specifically for social care, and most do, every year.
• 2022Referendum limits mean most councils raise bills by close to the maximum permitted without a vote, which has become the default rather than the exception.

Where does the money go?

Your council, the police, and often a fire authority. Council tax is one of the few UK taxes where you can see exactly who gets it: the bill itself lists each body and its share. But within each body it is not earmarked to any service. The adult social care precept is the nearest thing to a genuine earmark, and even that is only loosely policed.

Is it different where I live?

Scotland

Scotland uses the same 1991 valuation date but raised the multipliers for bands E to H in 2017, so expensive homes pay relatively more than in England. Police and fire have been funded centrally since 2013, so Scottish bills have no police precept. Water and sewerage charges are collected with the bill but belong to Scottish Water and are not council tax.

Wales

Wales revalued in 2003 and has nine bands rather than eight, with a Band I above the English top band. Bills include a police precept and usually a community council precept.

Northern Ireland

Northern Ireland has no council tax at all. Households pay domestic rates: a regional rate set by the Executive plus a district rate set by the council, both charged as pence in the pound of the property’s 2005 capital value. Because it is proportional to value rather than banded, it is closer to a true property tax.

Does it change what people do?

Revaluation is the clearest case in UK tax of a reform everyone agrees is needed and nobody attempts. Any revaluation creates losers whose bills rise sharply, and they are concentrated and vocal, while the winners are dispersed. Wales managed it once in 2003 and has not repeated it.

When a tax rise stops raising money looks at the cases where the effect has been large enough to move the revenue.

How does that compare with other countries?

In 2024 the UK raised 1.7% of GDP this way: first of the 5 countries compared here.

What are the arguments?

Both columns are set out as their strongest case, not as a preferred answer and a strawman. See how this site handles contested questions.