When you’re embarking on the exciting prospect of moving into your dream home, it can soon feel like you come crashing down to earth under a mountain of paperwork. All you want to do is have the keys in the palm of your hand, get the help of a removal company, sit back and relax and then get ready to leave your own mark on the place.
While all of this is certainly cause for celebration, unfortunately there’s no shortage of paperwork you need to get in order too. In this article we’re going to break down and simplify the complex world of council tax so you know what it is, why it matters and what to do about it. Without further ado, let’s dive right in…
What is council tax?
Council tax is collected by your local council and is designed to meet the needs of individual communities in a way that other taxes can’t. You might think that you already pay enough out of your wages every month, but council tax will still need to be factored into your budgeting.
You can think of it as the government’s way of letting local communities support themselves in the way that best allows their needs to be met. The needs of a community in rural Cornwall can be very different to those in Central London, which is the reason council tax is levied.
How much is council tax?
This will depend on your individual circumstances and the value of your home. While a definitive breakdown that will give you the exact amount on your bill is beyond the scope of this article, the general rule of thumb is that it will cost more than £100 per year and will increase if you live with another adult, as well as with the size of your property.
If you want to get a definitive value before you decide to move home, contact your local council with details of who’ll be living at the property, and the address, and they’ll be happy to advise you. If nothing else it’ll save any nasty surprises when you open your new set of bills at your dream home!
How do I pay council tax?
As with any household bill there is a range of payment methods open to you. The most common is Direct Debit, with some councils offering a small discount for those who pick this method.
BACS, cheques and other forms of deposits are also open to you, with the specific details for your particular council being laid out on the back of the demand notice. And for those unsure of the terminology, the potentially alarming ‘demand notice’ is just another term for your council tax bill.
Pay on time and it will be cleared just the same as any other bill and give you nothing to worry about.
Perhaps confusingly, council tax is set up over 10 monthly installments from April to January by default.
The aim here is to give families a ‘break’ in payments after the often expensive festive period. The potential problem is that this will cause your outgoings to fluctuate across the year.
If you want the simplicity of a set amount every month so that you don’t have to adjust your household budget, you can choose to pay in 12 installments over the full calendar year. A quick letter or email to the council is all it will take to get this change put into action.
Is there such a thing as council tax reductions?
There are, but don’t get your hopes up! The name makes it sound like you can apply for a whole host of reasons, but you generally only pay less if you’re in education, training or you live alone. There aren’t any council tax breaks for families. Here’s a quick rundown of the people who would qualify for a council tax reduction and the amount you can expect to be cut off your final bill:
- Students and anyone under the age of 18 living alone will not have to pay a penny of council tax
- Students in multiple student houses will be exempt from council tax, regardless of age, for the duration of their study
- Young adults in full-time training or an apprenticeship will be exempt from council tax
- Working professionals who live alone, regardless of age, will save 25% on their council tax bill
If your situation changes, for example your partner moves into your home, you’ll need to notify the council as soon as possible so they can recalculate your bill. It’s never a fun thing to have to do, but it will certainly save you an expensive headache in the long run.
What do you do when you’re moving?
There’s going to be a switch over date on which you leave your current property and move into your new property. If you own your existing property, this will be the date you exchange.
If you rent your current property, this will be the date you hand the keys back to the landlord. Knowing this date as early as possible is what will allow you to get the council tax settled for both properties, new and old.
The first thing you want to do when you know this date is to pass it onto the council where you’re currently based. They’ll be able to calculate your bill pro rata and send a final bill to you. If you’re leaving a quarter of the way into the month, you’ll only pay 25% of that month’s council tax.
The next thing you want to do is pass this date onto your new council and tell them where you’re moving from, where you’re moving to, and who will be living with you. Once they have this information they can send you your council tax bill for the rest of the tax year.
For added peace of mind, you can ask for electronic copies of both bills to be sent to your email address. That way if physical copies arrive when you no longer have access to the property, you won’t inadvertently miss a payment. You could also set up a redirect of your mail with Royal Mail so that anything sent to your old address finds its way to your new address.
That’s all of the complex business covered and the practical matters outlined, but there’s one more bit of info for those of you who want to know the fine details.
How is council tax actually calculated?
There’s no simple way to get your head around this one, but your council tax is based on the value your property would have sold for if had it been on the market on 1 April 1991. We know, it sounds very arbitrary, but the key thing is that this formula is applied to all properties in England, which hopefully levels the playing field and gives everyone a fair bill at the end of the day.
And if that’s caused nothing but confusion, forget about it and focus on the practical steps we’ve outlined above. They’re all you need to take care of when you already have a to-do list that feels like it’s growing and growing.