Council Tax - Citizendia

Council Tax is the system of local taxation used in England^[1], Scotland^[2] and Wales^[3] to part fund the services provided by local government in each country. Public finance is a field of economics concerned with paying for collective or governmental activities and with the administration and design of those activities The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated Payroll tax generally refers to two kinds of taxes: Taxes which Employers are required to withhold from Employees Pay, also known as Withholding A capital gains tax (abbreviated CGT) is a Tax charged on Capital gains the profit realized on the sale of a non-inventory Asset that was purchased Stamp duty is a form of Tax that is levied on documents Historically a physical stamp (a Tax stamp) had to be attached to or impressed upon the document to denote Land value taxation (LVT (or site value taxation) is an Ad valorem tax where only the value of land itself is taxed A sales tax is a Consumption tax charged at the Point of purchase for certain goods and services Value added tax ( VAT) or goods and services tax ( GST) is a consumption Tax levied on value added. A flat tax (short for flat rate tax is a Tax system with a constant tax rate The tax tariff and trade laws of a political region State or Trade bloc determine which forms of consumption and production tend to be encouraged A tax haven is a place where certain Taxes are levied at a low rate or not at all In Economics, tax incidence is the analysis of the effect of a particular Tax on the distribution of economic welfare. In a Tax system and in Economics, the tax rate describes the burden Ratio (usually expressed as a Percentage) at which a business or person is A proportional tax is a Tax imposed so that the Tax rate is fixed as the amount subject to taxation increases A progressive tax is a Tax imposed so that the Tax rate increases as the amount subject to taxation increases A regressive tax is a Tax imposed in such a manner that the Tax rate decreases as the amount subject to taxation increases Tax advantage refers to the economic bonus which applies to certain accounts or Investments that are by Statute, tax-reduced tax-deferred or tax-free Personal income taxes See also Income tax in Australia Only the federal government imposes income taxes on individuals and this is the most significant source of Taxation in the British Virgin Islands is relatively simple by comparative standards photocopies of all of the tax laws of the British Virgin Islands would together amount to about 200 The level of Taxation in Canada is average among Organisation for Economic Co-operation and Development (OECD countries Taxes provide the most important revenue source for the Government of the People's Republic of China. See Government of Colombia for a wider perspective of Colombian government See Government of France for a wider perspective of French government Taxes in Germany —being a Federal Republic —are levied by the federation ( Bund) the States ( Länder) as well as the HK Inland Revenue Ordinance Cap112 is one of Hong Kong's Ordinances Taxes in India are levied by the Central Government and the State Governments This article ls with Taxation in Indonesia or pajak. Definitions "Pajak" in Indonesian for Tax and taxes whereas " Perpajakan The system of Taxation in Ireland is broadly similar to the system of Taxation in the United Kingdom. The Netherlands has a rich history dealing with taxation predating the Romanic period. Taxation in New Zealand is collected at a national level by the Inland Revenue Department (IRD on behalf of the Government of New Zealand. The Income tax in Peru is collected by the Superintendencia Nacional de Administración Tributaria, best known as SUNAT. 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Monetary policy is the process by which the Government, Central bank, or monetary authority of a country controls (i the Supply of Money, A central bank, reserve bank, or monetary authority is the entity responsible for the Monetary policy of a country or of a group of member states In Economics, money supply, or money stock, is the total amount of money available in an Economy at a particular point in time The gold standard is a monetary system in which a region's common media of exchange are paper notes that are normally freely convertible into pre-set fixed quantities of Gold Fiscal policy, taking the scope of Budgetary policy, refers to government policy that attempts to influence the direction of the economy through changes in government taxes Government spending or government expenditure is classified by economists into three main types A budget deficit occurs when an Entity (often a Government) spends more Money than it takes in Government debt (also known as public debt or national debt) is Money (or credit) owed by any level of government either Central government Trade is the willing exchange of goods, services, or both Trade is also called Commerce. For other uses of this word see Tariff (disambiguation. A tariff is a tax imposed on goods when they are moved across a political boundary A trade pact is a wide ranging Tax tariff and trade pact that often includes Investment guarantees The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated In Economics, a financial market is a mechanism that allows people to easily buy and sell ( Trade) financial Securities (such as stocks and bonds There are two basic financial market participant categories Investor vs Corporate finance is an area of Finance dealing with the financial decisions Corporations make and the tools and analysis used to make these decisions Personal finance is the application of the principles of Finance to the monetary decisions of an individual or family unit Public finance is a field of economics concerned with paying for collective or governmental activities and with the administration and design of those activities Financial regulations are a form of Regulation or supervision which subjects Financial institutions to certain requirements restrictions and guidelines aiming to A banker or bank is a Financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money Fractional-reserve banking is the banking practice in which Banks keep only a fraction of the value of their Bank notes and demand deposits in reserve Full-reserve banking is the Banking practice in which the full amount of each depositor's funds are available in reserve at the bank when each depositor Free banking is a theory of Banking in which commercial banks and market forces control the provision of banking services Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law ( Sharia) principles and guided by Islamic economics England is a Country which is part of the United Kingdom. Its inhabitants account for more than 83% of the total UK population whilst its mainland Scotland ( Gaelic: Alba) is a Country in northwest Europethat occupies the northern third of the island of Great Britain. It was introduced in 1993 by the Local Government Finance Act 1992, as a successor to the unpopular Community Charge. The Local Government Finance Act 1992 includes obligations of the occupants or (in the case of vacant properties the owners of properties in the United Kingdom to pay Council The Community Charge, popularly known as the " poll tax " was a system of taxation introduced in replacement of the rates to part fund Local government The basis for the tax is residential property, with discounts for single and vulnerable people. As of 2008, the average annual levy on a property in England was £1,146. 2008 ( MMVIII) is the current year in accordance with the Gregorian calendar, a Leap year that started on Tuesday of the Common ^[4]

1 Organisation
- 1.1 Collecting authorities
- 1.2 Precepting authorities
2 Calculation
3 How Council Tax is spent
4 Criticism
- 4.1 2007 media claims: "Millions may have overpaid"
5 Notes and references
6 See also
7 External links

Organisation

Council Tax is collected by the local authority (known as the collecting authority). However, it may consist of components (precepts) levied and redistributed to other agencies or authorities (each known as a precepting authority).

Collecting authorities

The collecting authorities are the councils of the districts of England, principal areas of Wales and council areas of Scotland, i. The districts of England are a level of subnational division of England used for the purposes of local government For Local government purposes Wales is divided into 22 Unitary authorities, which are responsible for the provision of all local government services including education For local government purposes Scotland is divided into 32 areas designated as "council areas" which are all governed by unitary authorities designated as e. the lowest tier of local government aside from parishes and communities.

Precepting authorities

The precepting authorities are councils from other levels of local government such as a county or parish councils and other agencies. In metropolitan counties where there is no county council, the joint boards are precepting authorities. There may be precepting authorities for special purposes which cover an area as small as a few streets or as large as an entire country.

Strategic authorities	Greater London Authority, county councils
Joint boards	Passenger Transport Executives, police authorities, fire authorities
Public-owned utilities	Scottish Water
Lowest tier authorities	civil parishes
Special purpose authorities	National Park Authority, Olympic Delivery Authority

These all set their precepts independently. The Greater London Authority ( GLA) is the city-wide governing body for London, England. A County council is the elected administrative body governing an area known as a County. In the United Kingdom, Passenger Transport Executives (PTEs are local government bodies which are responsible for Public transport within large urban areas A police authority in the United Kingdom, is a body charged with securing efficient and effective Policing of an area served by a Territorial police force In the United Kingdom a fire authority or fire and rescue authority is a statutory body made up of a committee of local councillors which oversees the policy and service Scottish Water is a Statutory corporation in Scotland that provides Water and Sewerage services A civil parish in the United Kingdom is a unit of local government. A National Park Authority is a special term used in the United Kingdom for the legal body in charge of a National park. The Olympic Delivery Authority (ODA is the Statutory corporation responsible for ensuring delivery of venues infrastructure and legacy for the 2012 Summer Olympic Each of the levying authorities sets a precept (total amount) to be collected for households in their area. This is then divided by the number of nominal Band D properties in the authority's area (county, district, national park, etc. ) to reach the Band D amount.

Calculation

Each dwelling is allocated to one of eight bands coded by letters A to H (A to I in Wales) on the basis of its assumed capital value (as of 1 April 1991 in England and Scotland, 1 April 2003 in Wales). Events 527 - Byzantine Emperor Justin I names his nephew Justinian I as co-ruler and successor to the throne Year 1991 ( MCMXCI) was a Common year starting on Tuesday (link will display full calendar of the Gregorian Calendar. Events 527 - Byzantine Emperor Justin I names his nephew Justinian I as co-ruler and successor to the throne Year 2003 ( MMIII) was a Common year starting on Wednesday of the Gregorian calendar. Newly constructed properties are also assigned a nominal 1991 (2003 for Wales) value. 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. The nominal Band D property total is calculated by adding together the number of properties in each band and multiplying by the band ratio. So 100 Band D properties will count as 100 nominal Band D properties, whereas 100 Band C properties will only count as 89 nominal Band D properties. ) Each collecting authority then adds together the Band D amounts for their area (or subdivisions of their area in the case, for example, of civil parish council precepts) to reach a total Band D council tax bill. To calculate the council tax for a particular property a ratio is then applied. A Band D property will pay the full amount, whereas a Band H property will pay twice that.

Revaluation

The government had planned to revalue all properties in England in 2007 (the first revaluations since 1993) but, in September 2005, it was announced that the revaluation in England would be postponed until "after the next election". ^[5] At the same time, the terms of reference of the Lyons Inquiry were extended and the report date pushed out to December 2006 (subsequently extended to 2007). ^[6] In Wales, tax bills based on the property revaluations done using 2003 prices were issued in 2005. Because of the surge in house prices over the late 1990s and early 2000s, more than a third of properties in Wales found themselves in a band higher than under the 1991 valuation. The 1990s collectively refers to the years between and including 1990 and 1999 Some properties were moved up three or even four bands with consequent large increases in the amount of council tax demanded. Some properties were moved into new Band I at the top of the price range. Only 8% of properties were moved down in bands.

However, a large shift of properties between bands will cause a shift in the allocation of the charge between bands, and the tax levied for each particular band will then drop, as the total amount collected will remain the same for each authority (see 'calculation of amount' above). Between the wholesale revaluations, a major change to a property (such as an extension, or some major blight causing loss of value) can trigger a revaluation to a new estimate of the value the property would have reached if sold in 1991. If such a change would result in an increase in value, then re-banding will only take effect when the property is sold or otherwise transferred.

Current bands

In England, the council tax bands are as follows :

Band	Value^[7]	Ratio^[8]	Ratio as %	Average^[9]
A	up to £40,000	6/9	67%	£845
B	£40,001 to £52,000	7/9	78%	£986
C	£52,001 to £68,000	8/9	89%	£1,127
D	£68,001 to £88,000	9/9	100%	£1,268
E	£88,001 to £120,000	11/9	122%	£1,550
F	£120,001 to £160,000	13/9	144%	£1,832
G	£160,001 to £320,000	15/9	167%	£2,113
H	£320,001 and above	18/9	200%	£2,536

In Wales, the bands were re-set on 1 April 2005 by the National Assembly for Wales, based on 2003 valuations. England is a Country which is part of the United Kingdom. Its inhabitants account for more than 83% of the total UK population whilst its mainland Events 527 - Byzantine Emperor Justin I names his nephew Justinian I as co-ruler and successor to the throne Year 2005 ( MMV) was a Common year starting on Saturday (link displays full calendar of the Gregorian calendar. The National Assembly for Wales (Cynulliad Cenedlaethol Cymru is a devolved assembly with power to make legislation in Wales. In addition to revising the band boundaries upwards, an extra band was added.

Band	Value^[10]	Pre-2005 value^[7]	Ratio^[8]	Ratio as %
A	up to £44,000	up to £30,000	6/9	67%
B	£44,001 to £65,000	up to £39,000	7/9	78%
C	£65,001 to £91,000	up to £51,000	8/9	89%
D	£91,001 to £123,000	up to £66,000	9/9	100%
E	£123,001 to £162,000	up to £90,000	11/9	122%
F	£162,001 to £223,000	up to £120,000	13/9	144%
G	£223,001 to £324,000	up to £240,000	15/9	167%
H	£324,001 to £424,000	£240,001 and above	18/9	200%
I	£424,001 and above		21/9	233%

In Scotland, the current bands are

Band	Value^[7]	Ratio^[8]	Ratio as %
A	up to £27,000	6/9	67%
B	£27,001 to £35,000	7/9	79%
C	£35,001 to £45,000	8/9	89%
D	£45,001 to £58,000	9/9	100%
E	£58,001 to £80,000	11/9	122%
F	£80,001 to £106,000	13/9	144%
G	£106,001 to £212,000	15/9	167%
H	£212,001 and above	18/9	200%

Rates

England rates for Band D. Scotland ( Gaelic: Alba) is a Country in northwest Europethat occupies the northern third of the island of Great Britain. England is a Country which is part of the United Kingdom. Its inhabitants account for more than 83% of the total UK population whilst its mainland

* The average is for 2006, whereas the individual listings are for 2008.
* Some council areas have special rates for certain zones within the council.

Council Area	Band D Rate	% of 2006 Avg	As at
Wandsworth^[11]	£676. 16	?	2008
Westminster	£681. 68	?	2008
Kensington & Chelsea	£1031. 15	?	2008
Southwark	£1,180. 94	?	2008
Average	£1268	100%	2006
Lambeth	£1,187. 23	?	2008
Hammersmith & Fulham	£1,193. 33	?	2008
Islington	£1,219. 40	?	2008
Camden^[12]	£1,300. 52	?	2008
Ealing	£1,344. 10	?	2008
Croydon	£1357. 64	?	2008
Hounslow	£1394. 53	?	2008
Richmond	£1490. 60	?	2008

A full list of rates for England are available from the Office of Deputy Prime Minister.

Discounts

Main article: Housing Benefit

Individuals may apply to their local authority for council tax benefit, and subject to eligibility, will receive contributions to cover their tax liability. Housing Benefit is a Means tested Social security benefit in the UK that is intended to help people with low incomes and low savings pay for rented Payments are made direct to their council tax account, and no cash is paid to recipients. Local authorities receive funding from the Department of Work and Pensions to both administer the council tax benefit system, and to cover payments. The Department for Work and Pensions (or DWP) ( Welsh: Adran Gwaith a Phensiynau) is the largest government department in the Government There may be further modifiers in certain circumstances, for example a discount for unoccupied property, a 25% discount for single occupants, or a total dispensation for diplomatic residences and residences completely occupied by students.

How Council Tax is spent

Further information: Local government in England, Local government in Wales, and Local government in Scotland

Although it is the only tax which is set by local government, the Council Tax contributes only a small proportion (25%, on average) of local government revenue. The pattern of local government in England is complex with the distribution of functions varying according to the local arrangements For Local government purposes Wales is divided into 22 Unitary authorities, which are responsible for the provision of all local government services including education Local government in Scotland is organised through 32 unitary authorities consisting of Councillors elected every four years by registered voters in each of the The majority comes from central government grants and from business rates which are collected centrally and redistributed to local authorities. Central government or the national government (or in Federal states the Federal government) is the Government at the level of the Nation-state Business rates is the commonly used name of non-domestic rates, a Tax on the occupation of non-domestic property

Local government provide services such as police, fire, recycling, refuse collection and removal, schools, leisure centres, park and ride schemes, parks and open spaces, street cleaning, subsidising of public transport, tourism, museums, social housing grants, housing and council tax benefits, environmental health and food safety in pubs, restaurants and shops, planning services, support for voluntary groups, meals on wheels, facilities for young people, adapting homes for disabled people, play centres for children, cctv installation, sports facilities, issuing taxi licences, flood defences, and many others.

A significant proportion of local government services are stipulated by central government in the form of statutory provision. Local councils are obliged by law to provide these services. The remainder of services are discretionary and are determined by the local council.

Criticism

Council Tax is criticised for perceived unfairness in not taking into account the ability to pay (see regressive taxation). A regressive tax is a Tax imposed in such a manner that the Tax rate decreases as the amount subject to taxation increases These critics point out that while the capital value of the property in which a person lives might give some indication of the relative wealth of the individual, it does not necessarily relate to current income. This argument however ignores the fact that those on low incomes can apply for council tax benefits which can significantly (or totally) reduce the amount the applicant pays.

Critics also claim that Council Tax has a disproportionate impact on renters, or those occupying part-owned social housing. They are paying tax according to the value of a property that they may not have been able to afford.

Equally, the tax isn't actually particularly proportionate even to property values. A band H property will pay at most three times as a band A, even though the value of the property may be ten or more times higher.

Whilst the tax may have regressive characteristics, supporters point out that there is a significant means tested benefit regime in place which offers rebates to those on low incomes. This has the effect of making the tax less regressive.

The Liberal Democrats have proposed a system of local income tax to replace Council Tax, however when such a scheme, the Scottish Service Tax, was proposed for Scotland, they opposed it. The Liberal Democrats, often shortened to Lib Dems, are a liberal Political party in the United Kingdom, formed in 1988 by merging the The Scottish Government plans to bring forward Legislation to replace the Council tax with a local income tax (LIT as part of the funding for Scottish Critics of that suggestion have claimed that administering such a system independently of the national tax system would impose significant costs for government and business would significant erode the value gained from it as a source of local government income. Conversely, administering a local income tax as part of the national tax system would leave local taxation entirely under the control of central government.

Another alternative scheme would be to allocate all funding directly from central government finances - already around 75% of local authority income is from central budgets. The biggest argument against this is that it removes fiscal independence from local government, making them mere service providers. However, since local government in the UK has no constitutional guarantee, and is shaped entirely by the whim of central government, some critics argue that local authorities can never be independent of central government.

2007 media claims: "Millions may have overpaid"

An edition of the current affairs programme Tonight with Trevor McDonald on 26 January 2007^[13] investigated whether millions of homes had been placed in the wrong band in the original 1991 valuation. Tonight is the name of a British television newsmagazine produced by Granada Television for the ITV network since 1999, when it replaced the Events 1340 - King Edward III of England is declared King of France. Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. It was shown that the banding valuations were often done by 'second gear valuations', in other words valuations were often done by driving past homes and allocating bands via a cursory external valuation. The programme followed case studies of a system devised by the presenter Martin Lewis, published on his website in October 2006, who had received thousands back in back payments after appealing their band allocations. Martin Steven Lewis (born May 9 1972 in Manchester, England) is a Journalist, Television presenter, website entrepreneur This Council Tax Cashback^[14] system was said to have the potential to reach millions and received wide spread publicity, likely to encourage people to challenge the system. ^[15]^[16]^[17] To date there has been no information published on how many have been successful in obtaining a reduced banding.

Notes and references

^ Communities and Local Government - Council Tax: The Facts
^ Council Tax in ScotlandScottish Government publications
^ Council Tax a guide Valuation Office Agency
^ Average council tax and % change 1999-00 to 2008-09 Communities and local government - figures released 27th March 2008
^ Council tax revaluing is shelved, news. bbc. co. uk
^ Lyons Inquiry Press Notice: 6 December 2006, [1]
^ ^a ^b ^c Nominal value as at 1991
^ ^a ^b ^c The ratio governs the relationship between the bands. For example, a Band B property will pay 78% of the charge set for a Band D property in the same area.
^ Based on average Band D rate as of 2006
^ Nominal value as at 2003
^ Plus "Commons" area surcharge
^ Plus "Commons areas" surcharge
^ http://www.itv.com/news/tonight_004ae25293cb8a3cc3a771af961dbcaa.html
^ MoneySavingExpert. com. Council Tax Reclaiming.
^ [2]
^ Millions could be eligible for council tax refund | Money | guardian.co.uk
^ 'Millions' owed tax handout | The Sun |HomePage|News|Sun Money

External links

Council Tax, from the Valuations Office Agency
Pay your Council Tax online, from Directgov
Council Tax payments, discounts and appeals, from Directgov
IsItFair - the UK Council Tax Protest Group
Axe The Tax - Liberal Democrat anti-Council Tax website
Ministerial correspondence relating to council tax in the financial year 1991-2 HM Treasury disclosure under the Freedom of Information Act
Check if you're in the right council tax band
Office of Deputy Prime Minister Released Council Tax Figures

The Scottish Government plans to bring forward Legislation to replace the Council tax with a local income tax (LIT as part of the funding for Scottish

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