Council Tax bands

[titbumwillypoo]

Council tax bands were set in 1991 and do not reflect the wealth distribution of the country today it's about time they were updated. It's ridiculous that a band D home in Islington where the average house price is £685000 is £1276.48 a year when a Band D house in Barnsley average price of £166000 is £2126.77.
Government should update the banding values, collect all the money and distribute it based on the actual demographics of the area which would be a fairer funding model. Some areas might be child heavy or pensioner heavy and it would allow councils to fulfil their statutory duties better if they had the funding in place.
Band A £0-£100000
Band B £100001-£200000
Band C £200001-£300000
Band D £300001-£400000
Band E £400001-£500000
Band F £500001-£600000
Band G £600001-£700000
Band H £700001 upwards

The purpose isn't to increase the overall take, just make it fairer.

What's fairer though? It's for services. It doesn't seem 'fair' for a couple without children using very few of these services to pay more than a couple with 5 children who use lots of the services just because their house is worth more really.

I didn’t agree with Thatcher about much, but the Poll Tax was actually the fairest and most logical solution.

Isn't that what the poll tax was more or less?

My flat is bigger than the flat upstairs but I don't have children here, I don't use education, social care, public transport, quite a lot of council services and I feel quite aggrieved that I'd have to pay more than the family upstairs purely because of size.

But that’s because people need to drink more because they live in Barnsley

No the poll tax was a flat rate per adult head, no difference between what Rishi Sunak would pay vs what someone who earns only just too much the threshold for getting benefits.

My suggestion is a way of identifying and extracting contributions from those whose lifestyle is the most luxurious because ability to pay is a good fundamental principle for fair tax distribution and it's too easy for clever accountancy to hide high income but it's difficult to hide a house.with my suggestion the couple of adults who are in a 5 bed home despite having no children because they like having a study each and a guest room will pay more than the couple who have s 5 bed home because they have 6 kids between them in some combination of kids from previous relationships plus younger children that they made together.

I think I'd like to adjust the original suggestion I made that you quoted though because it occus to me that a dwelling made in a converted cargo container in a car park in Wigan could well be the same square footage as a bijoux little flat in a Georgian building in Kensington or Chelsea but the person living in the latter definitely has more capacity to contribute to the shared costs of living in a civilised society than the person living in the former.

And there should definitely be redistribution from wealthy areas to poorer areas.

But why should that couple pay more than the family? Maybe they chose not to have another child so that they could afford a bigger home. That doesn't mean they deserve to pay more council tax. They will effectively be punished for saving the money that extra children cost.

This. Every time this conversation comes up Mumsnet circles back to reinventing Poll Tax and universally agrees it's the best way to go.

Because those who have the highest capacity to pay should pay more. That's a basic principle that I firmly believe in. Right wing politics tries to avoid this because flate-rate options benefit the wealthiest at the expense of the poorest.

This graph shows a total public revenue burden in the UK of 1.14 trillion per year. If that was imposed per head them each of us (including children) would pay a flat £17,000 per year. Or if just divided between those of working age it would be £27,000 per head. Per head taxes are clearly ridiculous and it's sensible to have a variety of taxes which take a slice here and a slice there in a way that takes much more where there's a lot of spare money sloshing about and much less where people are living on the breadline and only using the basic necessities. Two adults in a 5 bedroom home are clealy more affluent than average and could easily downsize to a smaller home if they choose so they clearly have more capacity to pay and shoukd do so.

I’m not convinced that families use significantly more services at all. I was told that we couldn’t get a bigger bin unless we had 6 kids 😆 Nearly 60% of council spending is social care and most of that is for pensioners who live alone.

I think fundamentally the country needs to decide whether council tax is a local tax for use of local services or whether it becomes more of a national wealth tax that is used for redistribution to poorer areas and to prop up other bits of government spending like health and education.

Most developed countries (actually all OECD except the UK) have a proportional property tax. Sometimes this stays locally and sometimes it doesn’t. Where it stays locally you tend to get major discrepancies in the services provided. For example in a fancy bit of Connecticut my kids were in classes of around 15-20 kids but in poor bits of Texas kids were in classes of 40+, all funded by local property taxes.. our library had free programming with snacks for kids, specialist teachers, specialist equipment (3d printers, cricut, electronics kits etc) theirs were being closed down.

The government have said they want to raise taxes and property is one of the ways they could do it. It’s an area of unearned wealth that people have paid no tax on. The tax share paid by the highest earners are at their highest levels seen - there is a limit. DCs work recently opened an office in Abu Dhabi and anyone who wanted to could move there. Those jobs have now left the UK and we lost those taxes too (about 1/3 of his team). Many of them are HENRYs who don’t own property and probably never will in London, most childless or 1 kid.

I really disagree with this. The standard of living in some areas of the country, for example some areas of the north is significantly higher than in the south due to the high house prices down here. There is no way the south should be charged more to subsidise areas of the country that already have far more disposable income.

Not necessary. A family with two children costs way more than four adults.

This is a very reasonable point. I’m in the NE and here two average incomes will still allow you to buy a decent house. On two incomes a little above U.K. average (7 years back) we comfortably purchased a 5 bed/2bath old Victorian terrace with huge living rooms downstairs & a garden that’s a stone’s throw from the coast and local transport. In much of London for the same kind of money we could get a 2/3 bed, ex council flat in a block with tiny rooms and have an annual service charge to add to our costs. It doesn’t seem all that fair to ask that the person in London in the flat with higher prices for everything pays the same as us just because house prices there are so high there. Chances are they don’t have the choice to just downsize. We could fairly easily shift to a smaller house but if you are a family of 4 it’s not so easy to downsize from a small 2/3 bed flat.

The Community Charge/Poll Tax was fair, to an extent. I supported it when it was introduced. For homes over a certain value, a property tax could be added. Why should six working adults sharing a house pay the same as the couple next door on an income marginally above benefits level?

@whatkatydid2014 I agree. I see my young adult DC being totally screwed for the cost of housing in the SE. Leaving very little disposable income. And now because they had to pay so much to buy a place, OP now wants them to pay a higher rate of council tax too. They have housing that barely meets their needs so there’s nothing to downsize to. They have jobs that require them to be present so moving elsewhere would not be practical, plus this is their home where their family is , so loss of family support and so on would make that difficult.

Equally, why should a family with three kids pay the same as a childless couple? They’re using schools, generating more rubbish and have the same access to services. That was the inequality of poll tax, it was grossly unfair and I say that as someone who benefited from it as a single parent with a kid in school.

Surely Rutland has the highest Band D charge in 2024-25???

Conversely Breckland, in terms of its services has one of the lowest Band D rates for a lower tier local authority at £113.58. It is of course the collection authority with the vast majority collected for Norfolk County Council, Band D £1672.11, and then £315.90 for Norfolk PCC. There's then a fair bit of variance in the parish council precepts to get to the overall Band D total.

https://www.angliarevenues.gov.uk/services/counciltax/about/charges/upload/Breckland-Council-Tax-Amounts-2024-25.pdf

Surely Rutland has the highest Band D charge in 2024-25?

Because it’s tiny and there are no economies of scale? It’s also one of the most affluent parts of the country outside London.

Changing the bands won’t make any difference unless the proposal is to make the charges flat across the country and centralise collection, for it all to be distributed afterwards.

This has massive repercussions for devolved power and council autonomy, effectively making local elections pointless as local reps would be beholden to central governments.

Westminster (and London generally) has lower charges per band because it is densely populated, so more income is raised from individuals paying less. Plus economies of scale kick in.

As someone pointed out up thread, when you ignore the letter of the band, and instead look at the type of properties, the wealthier places are generally paying much more for the equivalent houses.

It’s not a perfect system but it’s vastly preferable to a per capita tax

Council tax doesn’t pay for schools. Schools get funding through the national funding formula.

57% of council spending is on social care.

Councils pay for ECHP provision

That’s fair but it is quite a small amount of their budget compared to social care which if it keeps growing as it is will surpass 100% of councils budgets in the next decade or so 😬

Edit: and people with kids should be no more on the hook for paying for ehcp than those without kids imho

It’s a worry, for sure. But what’s the alternative?

We live in a society that protects the most vulnerable. I like being part of that system. I don’t want to dismantle the welfare state so only the rich can weather the ups & downs of life.

Everyone paying a little bit more seems fairest - if we start moving down the road of ‘I don’t use that so I’m not paying for it’, it would collapse. I don’t need a black bin collection every fortnight, but if I refused to pay for it, those that do need one would have to pay more. Some would, some would fly tip or use public bins to avoid the higher charges etc.

I agree with you but many people on the thread think that people with kids should pay more because they “use more services” which is a difficult position to defend and also - not actually true in terms of £ spent by the council.

Agreed. Do we start charging by disability and age too?

Plus kids are the next generation of tax payers. We need them to keep the system churning.