Families could face council tax rises of up to £100 EVERY year under stealth tax raid
COUNCIL tax bills could soar by up to £100 EVERY year from April under a stealth tax raid.
The Office for Budget Responsibility (OBR) said taxes will rise by £1.8billion next month after the government allowed councils to hike bills by up to 5%.
This tax increase had already been announced, but there are fears councils will continue to increase bills for another five years.
The OBR currently predicts councils will hike bills by 1.9% in future years, unless new policy decisions are made, which could increase them further.
The stealth move could eventually lead to a total increase in bills of £7.5billion by 2025-26.
It comes as the Treasury gave the green light for councils to increase taxes in the the Spending Review in November last year.
What help is available if you're struggling to pay your council tax?
IF you are over the age of 18 and either own or rent your own home, you must pay council tax.
But there is help available if you're struggling to pay your bill.
You get 25% off if:
You live on your own.
You also qualify for this discount if there is one adult and one student, or one adult and one person who is classed as severely mentally impaired.
You get 50% off if:
When working out how many people live in a property, some people are not counted - they are called "disregarded people".
You can get a 50% discount if everyone in your home is "disregarded" from paying council tax.
For example, if there is a live-in carer and one person who is severely mentally impaired.
Check out the website for a full list.
You get 100% off if:
You’re living in an all-student household, or if you have a severe mental impairment and live alone or with a student.
A full reduction is also possible in households where someone under 18 is living with someone who is severely mentally impaired.
Claim benefits?
You could be entitled to a 100% reduction on your council tax bill if you receive certain benefits.
Check with your local council to see what help you can offer.
Own a second home?
You’ll usually have to pay council tax on an empty home.
But councils can give furnished second homes or holiday homes a discount of up to 50%.
Talk to your local authority to see what help they can offer.
Is there help during the coronavirus crisis?
Struggling households can also get their council tax bills reduced by up to £150 this year due to the coronavirus crisis.
The council tax hardship fund, which was first announced in March, is available to working-age people who get council tax support.
This is a benefit to help people who are on a low income or claiming certain benefits to pay their council tax bill.
Can I pause my payments?
A new scheme is launching this year that will see struggling households pause their payments for 60 days.
First announced in June 2019, the breathing space scheme will protect hard-up Brits from bailiffs and prosecution for two months.
The scheme won't come into force until May 4, 2021.
Authorities can normally hike local taxes by no more than 2% without holding a referendum with local people.
However, the OBR now estimates around two-thirds of councils will raise taxes up to the new maximum of 4.99%.
That will mean increases of between £50 and £100 for band D properties, reports .
The OBR said the decision meant it had to more than double its estimate of the increase in council tax by £800million to £1.8billion for 2021-22.
“This is more than explained by the Government’s decision to allow councils to increase council tax rates by up to 5% … rather than the 2% our March 2020 forecast assumed,” said the OBR in its Budget day report.
The hike pushes the total council tax take for 2021/22 to £39.9billion - which will rise to £45.6billion by 2025/26.
'SIGNIFICANT BURDEN'
Tax campaigners fear the council tax rises will hit some households a lot harder than others.
Andrew Dixon, founder of the Fairer Share campaign for property tax reform, told the Telegraph: “This … will only exacerbate the unfairness of the current system where modest homes in the North often pay significantly more than mansions in Knightsbridge.
"Council tax was the elephant in the room when the Chancellor delivered the Budget.
“While he set out support packages for those worst hit by Covid-19, there was no such respite for millions of modest and low-income households facing crippling council tax bills.”
And the Local Government Association said it was also aware increases would place a "burden" on some families.
It said: “Councils face the tough choice about whether to increase bills to bring in desperately needed funding to protect our services at a time when we are acutely aware of the significant burden that this could place on some households.
“Further action is desperately needed to immediately shore up social care services – which have been on the front line during the pandemic – and to secure the long-term future of care and support."
A spokesperson for the Ministry of Housing, Communities and Local Government said: "We’ve committed over £35billion to help councils support their communities and local businesses during the pandemic.
“We’re also providing councils with £670 million of new grant funding to enable them to continue reducing council tax bills next year for those least able to pay, including households financially hard-hit by the pandemic.
“Councils are and have always been responsible for setting council tax levels.
"We set referendum principles to ensure that local people have the final say over any excessive increases."
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We explain how to check how much your council tax bill is going up by from April 2021.
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Households on a low income, Universal Credit or benefits can apply for a council tax bill reduction.
And because of the coronavirus crisis, you might be able to get an extra £150 knocked off your council tax bill.