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Council Tax)
The Council Tax is the main form of local taxation in England, Scotland and Wales. It is paid by residents to the local authority. It was introduced in 1993 (by way of the Local Government Finance Act, 1992) as a successor to the unpopular Community Charge or Poll Tax, introduced in 1989 in Scotland and in 1990 in England and Wales.
The base for the tax is residential property. Each dwelling is allocated to one of eight bands coded by letters A through H on the basis of its assumed capital value (as of 1 April 1991). Each local authority sets a tax rate expressed as the annual levy on a Band D property inhabited by two liable adults. This decision automatically sets the amounts levied on all types of households and dwellings.
2005 will see the first revaluations of property for council tax purposes since 1991. Due to the surge in house prices over the late 1990s and early 2000s, most properties found themselves in a band higher under the draft listings than under the 1991 valuation. Few properties outside of Bands G and H found themselves still in the same bracket (the prime exception being the introduction of Band I), with some properties at the lower end moving up by as many as three bands.
Although it is the only tax which is set by local government, the Council Tax contributes only a small proportion of local government revenue. The majority comes from central government grants and from business rates which are collected centrally and redistributed to local authorities.
Council Tax is divided into a number of components. Depending upon where the dweller lives, there can be a separate charge made by the Greater London Authority, County Councils, Police Authorities, Fire Authorities , Transport Authorities, National Park Authority, District Councils, and Civil Parishes. These may all set their precepts independently.
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Last updated: 10-18-2005 06:25:35
