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?

Labour attempt to hide council tax rise: Forces re-bill letter

First Published by: Luton libdems Blog

Luton Borough Council has agreed to write to all residents again regarding

Council Tax after sending out Bills containing no reference to their controversial 3.44% Council Tax hike.

Luton was in a small minority of Councils (around 1 in 10) to raise Council Tax this year – by 3.44 percent, just under the figure where a referendum would be needed.  

The Labour administration has faced widespread criticism from residents for rejecting a Government grant for £1.6 million, then charging local residents £2.2 million instead.

Bills hitting doormats last week contained no reference to the Labour rise.

Following a complaint by a local resident, the Council has been forced to write to ALL Luton Council Tax payers with details of Labour’s controversial 3.44% increase.

The Council Tax (Demand Notices) (England) Regulations clearly state that the relevant percentage increases must be displayed on the Bills (Part 2 Schedule 1), and that should these be omitted then “as soon as practicable after the mistake is discovered the billing authority must serve a statement of the relevant matter on the person on whom the notice was served” (No 3038, Part 2, Regulation 7.)

The Labour-run Council has now decided to comply with the law.

Luton Liberal Democrat Deputy Leader, Martin Pantling said:

“After discovering just how unpopular the decision to impose this unnecessary Council Tax rise has been, it seems someone decided it would be a good idea not to put any reference to the Council Tax increase on people’s Bills.”

“This blatant attempt to cover up the rise has backfired badly.  The Labour Council has been forced to accept they are legally required to publish details of their unpopular and unnecessary tax rise, but their reluctance has now cost residents tens of thousands of pounds in postage alone, let alone the cost of the letters people will now receive.”

“By not publishing their tax rise, Labour has thrown a fair chunk of the tiny extra amount they’ll collect through their rise straight down the drain.  But they barely care because it’s Luton residents who will continue to pay the cost of this inept Labour administration.”

Are you paying too much Council Tax?

Extra funding for councils agreed

First Published by: The Press Association

Additional funding for Scotland's 32 local authorities, paid out in return for backing a council-tax freeze, has been formally agreed at Holyrood. MSPs backed a Scottish Government order which gives councils £70 million of extra funding to compensate them for the freeze.

Local government minister Derek Mackay said all councils had included provisions for a package of commitments set out by the Scottish Government in their budgets.

These included a Council Tax freeze for a fifth consecutive year, maintaining police officer numbers and maintaining teacher numbers in line with pupil numbers, while providing a place for each probationer teacher.

The Government has pledged to continue the council-tax freeze for the lifetime of the current parliament.

He said: "The agreement of local authorities to extend the council-tax freeze for 2012/13 will mean that our commitment will cumulatively have saved households across the length and breadth of Scotland over £1 billion."

Labour's James Kelly said his party would support the order to provide the £70 million.

He said: "I think we have to accept that council leaders put in the position of being offered the £70 million or having to take a 5.2% cut in the needs-based portion of their grant, is like having a gun held at their head, and you can understand why they've gone down the route they have."

Are you paying too much Council Tax?

Local authorities planning big council tax rises told to hold referendums

First Published by: The Guardian 

• Rule applies to councils planning rises of more than 3.5% 
• Eric Pickles says move is radical extension of direct democracy 
• £675m set aside to fund second year of council tax freezes 

The community’s secretary, Eric Pickles, has announced that any local authority planning to increase Council Tax by 3.5% or more will be required to hold a referendum asking local people to endorse the move.

Pickles described the move as a radical extension of direct democracy, but it is also likely to deter many councils from risking the judgment of their council-tax-payers.

The government says it has set aside £675m for a second year of council tax freezes. The Department for Communities and Local Government said if councils agree to the freeze, local taxpayers living in an average band D home in England could save up to £72 a year in council tax.

The power to trigger referendums was contained in the Localism Act and in some ways replaces the power to impose caps. Parliament will be asked to endorse the final vote threshold before councils set their annual budgets in the spring. Pickles said: "Since 1997 people have seen their council tax more than double, pushing typical bills to £120 a month.

"We are getting to grips with this with another council tax freeze deal and by radically extending direct democracy over big bill increases with a new local tax-lock. "Councils have a moral obligation to help hard-working families and pensioners with the cost of living.

"If they want to hike taxes on their local residents above 3.5% they'll now need to get a direct democratic mandate to do it."

The government also set out its provisional second-year funding settlement for English local authorities as announced a year ago. Councils will have an average spending power of £2,186 per household at their disposal.

£27.8bn will be distributed in 2012-13 in a fair and sustainable way across all parts of the country, the department said.

For example, the average spending power per household in Hackney will be £3,050, compared with £1,537 in Windsor and Maidenhead, reflecting the fairness of the settlement, it said.

Overall, the average spending power reduction for councils in 2012-13 is expected to be limited to just 3.3%, or £75 per household, less than last year's comparable figure of 4.5%.

"The second year of our fair and sustainable settlement will mean councils still have on average £2,186 for every household they serve, enough to safeguard the most vulnerable, protect taxpayers' interests and the frontline services they rely on," Pickles said.

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Ahead of council tax hikes, could you be among 2m eligible for rebates?

First Published by : The Telegraph

Four in 10 households will see their Council Tax bills rise this year, the Chartered Institute of Public Finance and Accountancy (Cipfa) calculates, but more than 2m households are entitled to rebates. Could you be one of them?

The average bill compromises the demand from a local authority, as well as separate charges levied by police and fire authorities, and parish and community councils. Cipfa found that across England, the council tax bill for the average band D home is increasing by 0.3 per cent or £4.46 to £1,443.79 from next month but some will rise by more.

The Government has pledged £1billion to help English town halls freeze the levy, but a minority of councils claim they would still face a shortfall. They can reject the Government's offer but must hold a referendum if they want to raise council tax by more than 3.5 per cent.

Some councils may be falling back into bad habits of overspending other people’s money, Labour increased this tax by 63pc more than the rate of inflation during its 13 years in power. Accountants Smith & Williamsonsay that was a bigger percentage increase than any other direct or indirect personal tax and duty changes, with the exception of stamp duty on house purchase.

Taking a typical ‘band D’ house in Guildford and using Surrey County Council statistics, Smith & Williamson found the tax bill the last time the Conservatives were in government was the equivalent of about £895 now. But the typical council tax bill increased to £1,459 a year under Labour.

Richard Mannion, a partner at Smith & Williamson, described council tax and stamp duty as “stealth taxes” and pointed out that the latter bill on purchase of this ‘band D’ property nearly doubled since 1997; rising by 92pc.

Publicity about the tax may cause more people to question whether their property is in the right band and whether reassessment might cut their bills.

You can confirm that your property’s is in the right banding by contacting Rebates UK Claims and Services Limited via their website: www.rebatesuk.co.uk or www.ctrebates.co.uk  

Older people with savings of less than £16,000 are the biggest group entitled to rebates. Here and now, more than 2m pensioners could help themselves to a Council Tax cut, according to the charity Age UK. 

Failure to claim Council Tax Benefit to which they are entitled means they pay £690 more a year for this tax than necessary. If you know someone who is eligible to claim help with Council Tax or other benefits, you can find more information here.

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Lyons Inquiry: Council Tax is Unfair

First published by: Lyons Inquiry

Sir Michael Lyons has published the much anticipated final report from his independent Inquiry into the future role, function and funding of local government - Place-shaping: a shared ambition for the future of local government. He said:

"I believe that local government is an essential part of our system of government today. Local government's place-shaping role - using powers and influence creatively to promote the well-being of a community and its citizens - is crucial to help improve satisfaction and prosperity through greater local choice and flexibility.

"In my final report, I call for a new partnership between central and local government. This needs to be based on changes in behaviours from all tiers of government to achieve a stronger relationship - creating a shared ambition for the future. Central government needs to leave more room for local discretion and recognise the value of local choice; while local government needs to strengthen its own confidence and capability, engage more effectively with local people, make best use of existing powers, and stop asking for central direction.

"I have also concluded that Council Tax is not 'broken', but is seen as unfair and has been put under too much pressure."

Sir Michael presents a mosaic of reforms which tackle a complex set of problems. They include essential reforms in the short-term to tackle the most urgent problems and more radical reform options for future governments.

Short term recommendations include:

Greater flexibility for local authorities to place-shape with less control from the centre –

By reducing specific and ring fenced grants;

A new power to levy a supplementary business rate in consultation with business,

And a new power to charge for domestic waste to help manage pressures on Council Tax,

And an end to capping of council tax;

Changes to improve fairness of council tax,

Recognising that council tax benefit is a rebate,

Automating the system to ensure 1.8billion pounds in unclaimed benefit helps the poorest households,

And raising the savings limit for pensioners to 50,000 pounds;

Improving transparency in the funding system by being clear about the contribution made by national taxation, and ensuring a more independent voice to inform Parliament and the public; and improving incentives for local authorities to promote economic prosperity and growth, initially through reform of the Local Authority Business Growth Incentives Scheme.

In the medium term the Government should:

Revalue council tax to update the tax base and improve fairness; at the same time, reform council tax by adding new bands to reduce bills for those in the lowest value properties, paid for by increased bills for those in higher value properties paying more - there should be no increase in average Council Tax bills as a result of this; Consider assigning a fixed proportion of income tax to local government; find ways to improve the incentives within the grant system; and Consider introducing the power to levy a tourist tax if local government makes a strong case based on local public support - this would be appropriate only in some areas.

In the longer term, future governments could consider more radical reform options such as local income tax or re-localisation of the business rate, but these reforms may require greater public support and understanding than currently exists.

Sir Michael concluded:

"Some of these changes can start immediately, building on current changes to the performance framework and Local Area Agreements; others can be taken forward in the Comprehensive Spending Review; whilst some require primary legislation. This package of reforms is designed to set out a developmental approach towards a more devolved and ambitious future for local government, based on improving relationships between central and local government, better local choices, more effective management of pressures, and greater public trust in the system as a whole."

What’s your view?

Are you paying too much Council Tax?

Mansion tax plan is foiled by Pickles

First Published by: Mail Online

The Rich just get Richer: 

Communities Secretary 'deletes' property data

Schemes for a ‘mansion tax’ have been torpedoed by Eric Pickles after he effectively deleted a database compiled by Council Tax spies containing details of millions of homes. The move means that any levy on properties worth more than £2million would now take years to introduce.

Liberal Democrat ministers have told their Conservative coalition partners that a mansion tax – or an equivalent tax on unearned wealth – must be introduced before they agree to scrap the 50p top rate of income tax.

But it has emerged that the Communities Secretary has scrapped the database of property details that would have been used to calculate who would have to pay.

Officials say it would take three years to conduct a new nationwide survey of property values. A Lib Dem policy paper on the mansion tax explained that the party would use information from the Valuation Office Agency, the Government’s council tax inspectors, to implement the charge.

Inspectors at the VOA had logged details of the number of bedrooms and bathrooms of all 25million homes in England and Wales. Other information included whether homes had swimming pools, conservatories or sea views.

The data, which would be crucial for deciding who should pay a mansion tax, had been entered into a complex database – but Mr Pickles ruled out using it for a Council Tax revaluation until at least 2015.

A revaluation in Wales in 2005 saw four times as many households moving up a band as moving down, and Labour postponed plans for a revaluation in England that same year amid mounting anger over the potential for big tax rises hitting middle-class families whose homes had risen in value over the past 20 years.

Despite this, inspectors carried on logging details of people’s properties, prompting accusations that they were preparing for a revaluation by stealth. However, the most recent accounts from the VOA show that, following budget cuts, its database has been scrapped as maintaining the U.S. technology would be too costly.

Demand: The Lib Dems have said that a mansion tax must be introduced before they agree to scrap the 50p top rate of income tax.

Most Tory MPs argue that: 

New property taxes would hit ordinary families and pensioners who have worked hard and paid their share. It would, they warn, penalise those with large mortgages who are not otherwise capital-rich, as well as pensioners on modest incomes living in long-held family homes and professionals who live in large shared houses in London.

Some Tories fear that the Lib Dems are agitating for a mansion tax safe in the knowledge that the Conservatives will not agree to one – allowing them to paint their coalition partners as ‘friends of the rich’ at a time of austerity.

Are you paying too much for your Council Tax?

'We know you're dead, but please tell us if your circumstances change':

First Published by: Mail Online

Bungling council's hugely insensitive benefits letter to grieving family of cancer victim

A grieving family have been left furious after they received a letter addressed to their dead brother - advising him they had stopped his tax benefits because he was dead, but urging him to REAPPLY.   

Steve Hutchings died on February 22 after sadly losing an 18-month battle against cancer and eight brain tumours. But that didn't stop Bristol City Council writing to him - on the day of his funeral - to explain why his Council Tax discount was no longer available - because of his death.

The letter goes onto explain that if he wanted to reclaim he could, but urged he please do so without delay. It also suggested he call the council's tax hotline if he needed help renewing his claim.

His sister, Linda, was horrified when she saw the letter, two days after she buried her brother. The siblings had been living together but were entitled to a council tax discount because Mr Hutchings was disabled.

She said: 'I couldn't believe it when they sent this. I could understand if it was a mistake, but they clearly knew he was dead.It threw me off my feet. I was in tears and then I got angry. I wouldn't have minded if they had written to me but they knew he was dead and sent it anyway. 

'You hear about this sort of thing happening but you never think it will happen to you. It's not funny. I don't believe it is forgivable.'

The letter, which is not signed, was headed 'claim ended: Reason - death.' 

It read: 'Your claim for benefit has ended with effect from the above date for the reason shown. If you wish to reclaim housing or council tax benefit, please do so without delay.

'Normally benefit will be paid from the Monday following the date we receive your claim. You can obtain a claim form and advice by ringing the helpline service.

'Please note - please return your completed application form immediately, even if you do not have all the required documentary evidence. You may lose benefit if you delay sending us your application form.'

At the bottom it stresses 'you must tell us if your circumstances change.'

Mr Hutchings, who was just 52 when he passed away, had suffered a series of illnesses, including a ruptured Achilles' heel. Part of his foot was removed, which made it increasingly difficult for him to walk. He was told he had terminal cancer 18 months ago after discovering a mole on his back.

Linda said: 'He had eight tumours on the brain, the biggest was two and a half cm. Two of them had gone and the rest had shrunk so we thought we were onto a winner. But someone up there knew better.' But even claiming his incapacity benefit was a problem. His sister said: 'We applied for it but they turned us down the first time because they have us the wrong information. I kept on at them.

'They're quick enough cancel it. He passed away on the 22nd, they stopped his claim the day before he died. They will blame the computer, but a computer only spits out what you put into it.'

Both Mr Hutchings and his sister were born and bred in Bristol, and lived together. He was a computer operator before he became ill and she works in a warehouse. 

Linda described her brother as a happy go lucky guy who was well liked. She said: 'He didn't deserve what happened. He fought it all bravely - his attitude was "what will be will be."' He was a fantastic guy.

'If nothing else, I hope this will stop the council wasting money, I hope it will not happening to someone else.'

What's your say:

Are you paying too much Council Tax?