Time to Axe the Council Tax … Forever!

First Published by: No Council Tax Report

 

Simply administering the Council Tax system is vastly expensive – it costs £600m every single year! The money goes on having separate collection systems in each council area, as well as the expensive Council Tax benefit system.

We estimate it costs about 4 times as much to collect £1 in Council Tax as to collect £1 in Income Tax: and costs will increase if the Government decide to proceed with the Council Tax Revaluation.

Council Tax benefit was designed to help the poorest people with their bills. But it simply doesn’t work. A third of families entitled to Council Tax benefit don’t claim – so have to struggle with their bills instead.

And the situation’s worse for pensioners: approximately 1.7 million don’t claim the money they’re entitled to. These take-up rates are way below those for other benefits. The main reasons for the dismal rate of take-up of Council Tax Benefits are that people don’t know about the benefit, and if they do they’re put off by the complexity of the application process – there can be as many as fifty pages of forms to fill in!

We believe that England needs a fairer system of local taxation. The Lyons Report highlights the fact that “fair taxation is based on ability to pay or income.” Thus, a local income tax would achieve the goal of developing a fairer local tax system.

A local based income tax would remove the unfair burden that is currently placed on those least able to pay. Such a tax “could significantly reduce the burden of local taxes on those groups with the lowest average incomes, notably pensioners and lone parents.”

Furthermore, the Lyons report asserts that it would be possible to implement a locally based income tax. “A local income tax could be feasible in England and could viably replace all or part of council tax, or operate alongside it.”

Are you paying too much Council Tax?