);

Local Taxation and why is it unavoidable?

Combined, the income generated from Council Tax and Business Rates provides Local Authorities with a major source of income. Their largest in fact. Non-Payment of the two bills is treated very seriously and anyone found to not be paying will be dealt with accordingly.


Governance

Council Tax and Business Rates are underpinned in law and must be treated in the same way you would treat your rent or mortgage payments.

Some of the main legislation can be found here;

Local Government Finance Act 1992

The Council Tax (Administration and Enforcement) Regulations 1992

The Council Tax (Administration and Enforcement) (Scotland) Regulations 1992

The Council Tax (Administration and Enforcement (Amendment) (Wales) Regulations 2019

What is Council Tax

Council Tax is set by Local Authorities every year and are able to retain 100% of the income generated from this, to support their budgets.

Council Tax is charged on domestic properties, and put into valuation bands, based on domestic property values from April 1991. It is this banding process that will determine how much Council Tax a household is required to pay.

There are, of course, certain properties which are eligible for discounts or exemptions and will not be required to pay 100% Council Tax; such as Students on full time courses or households where only one adult resides. Those on lower incomes are urged to apply for Council Tax Support / Council Tax Reduction, reducing their Council Tax bill.

Annually, Council Tax billing is reviewed and there many who need to increase the annual charge and if Local Authorities wish to increase Council Tax levels above Central Government defined thresholds, they are required by law to hold a referendum.


What are Business Rates

Business Rates (or National Non-Domestic Rates) are set by Central Government in Westminster – again every year. Central Government sets the multiplier (pence per pound) which is applied to the rateable value, an estimate of the open market rental value a property could achieve on a specified date.

Properties with a rateable value of £12,000 or less are exempt from Business Rates and rateable values up to £15,000 are eligible for small business rates relief.

There are other reliefs and exemptions, for example; an 80 per cent discount for properties used by charities.

Retention of income generated from Council Tax and Business Rates

Currently Local Government, collectively retains 50% of the income from Business Rates, the remaining 50% is paid to Central Government, which uses the income to fund grants to Local Authorities.

Who is responsible for valuating properties?

Property valuations for domestic Council Tax and Non-Domestic (Business) Rates in England and Wales are the responsibility of the Valuation Office Agency (VOA).

If you are in Scotland, you must contact the Scottish Assessor’s Office

Both Council Tax and Business Rates payers are able to check their property’s valuation with the VOA and Scottish Assessor’s Office. You can do this here;

Council Tax (England and Wales)

Council Tax (Scotland)

Business Rates (England and Wales)

Business Rates (Scotland)

It is important to note that, should you wish to challenge your Council Tax band or Business Rates valuation, you must continue to pay your bill as it stands. If your Council Tax band alters, or your business’s rateable value changes, you will either be credited the difference or re-billed with a new adjusted liability.

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