With the cost of living looking set to continue to rise, it’s never been more important to look at any areas you can save money, particularly household bills.
And your council tax payment is one of them. With youngsters moving back in with parents, or partners staying part of the week, you may need to be careful about whether you need to pay more for your council tax bills.
Plus, we bring you some tips to see if you really need to pay council tax.
Read on to see if you could be exempt from council tax.
How is council tax worked out?
Council tax pays for things like your rubbish collection and police funding. It’s worked out by local councils. The amount you pay depends on a number of things, including the value of your property in April 1991. Your property band is determined by the Valuation Office Agency.
Everyone who lives in the property who is over 18 is liable to pay council tax, although there are exemptions to this, which we will look at more in a minute.
Make sure you are paying the right amount
If your personal circumstances in your main property change – such as a family member moving out, if someone in your house has a disability, or if you have changes to your state benefits – always let your local authority know. You could be paying too much council tax.
You can also check your property is in the right council tax band. You may be able to get a council tax rebate if you are in the wrong band.
You can get advice from Citizens Advice to check if you’re entitled to a discount on your full council tax bill – such as if someone you live with has a severe mental impairment or is on income support.
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How much is council tax?
Council tax rates differ around the country, and most rates are based on two adults living in the home. You can check to see if you are in the wrong council tax band easily online.
You need to know 3 main pieces of information to check how much council tax you should pay:
- The valuation band for your home – there are eight council tax bands from A-H
- How much money your local authority charges for a house in that valuation band
- Whether you qualify for any discount or exemptions to this charge
There should be plenty of information on your local councils’ website giving advice if you claim benefits or if the rules differ depending on where you live, such as in Northern Ireland or Scotland.
Council tax exemptions
You may qualify for a discount on your council tax if you fall into one of the following categories:
- If everyone in the property is under the age of 18.
- The housing is purely for armed forces accommodation.
- If all occupants are full-time students.
- If your property is unoccupied due to major repair work or alteration – each council will have different rules on this.
- If the property is empty due to the death of the occupier.
- If the home has been repossessed and empty.
These rules may differ in Scotland, where you might have to pay the council tax in full even if your house is empty.
You might be eligible for a council tax discount depending on your living status, from living on a low income to living with someone who is severely mentally impaired – we’ve put together some different scenarios to help. You can also seek advice from MoneyHelper (formally the Money Advice Service).
My boyfriend stays over 2-3 nights a week – would he have to pay council tax on my property?
Council tax is worked out with the assumption that at least two adults live in the property. If you are the only adult and have qualified for single-person discount, you may need to be careful about having long-term guests.
If you are seen as living as a couple, with joint bank accounts, and having children, then you may be seen to be living as a couple, and then liable for an increase in your council tax.
However, if your finances are very separate and they are paying council tax at another property, it may be seen that they live elsewhere.
I’m the only adult, and have a live-in carer – will that affect my council tax?
Live-in carers are ‘disregarded’, so this shouldn’t affect your council tax. It is best to check with your local council to check, especially if you currently receive a discount.
What if I rent out a spare room to someone?
If you rent out a spare room to a lodger on a permanent basis, this might affect your council tax. Even though the lodger won’t actually have to pay the full council tax, you, as the homeowner, are responsible for your council tax bills.
Council tax is worked out as a charge on the property, not necessarily by the number of people living there – but this can be confusing. If you have been receiving a single person discount of 25% off your council tax and then take in a lodger, this may change the rate of your council tax.
But if your lodger is a full-time student or is receiving certain benefits such as Universal Credit, you may still qualify for the discount. Find help on your local council’s website.
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I’m a landlord and rent out a property to a family of four – who pays the council tax?
Most tenants pay the council tax bill directly to their local authority if it’s a longer term let.
However, if the occupants are deemed as ‘disregarded’ eg students, armed forces or asylum seekers, the landlord is responsible.
Our 19-year-old son is living with us in between University terms, would we pay extra council tax?
No – full-time students are ‘disregarded’ for the purpose of council tax. This means you do not have to pay council tax for your son. Local authorities request council tax on the assumption that two adults live in the property.
Full-time students and people completing an apprenticeship do not have to pay council tax. So this shouldn’t affect your household council tax bill.
If you are a single parent and you currently receive a 25% discount on your council tax, this won’t be affected by your son living with you, as long as he is a full-time student.
Can I apply for a single-person discount?
Yes! If you are living on your own and over 18, you may be able to receive a 25% reduction on your council tax bill.
You’ll need to prove your status and should receive a reduction to your paid council tax within a couple of months.
I’m on a low income, can I get any help towards my council tax?
If you or the people you live with are on a low income, then you may qualify for a council tax reduction.
This is known as Council Tax Support and is paid via a rebate on your council tax bill and could be up to 100% full rebate.
You’ll need to show the local council your income, any savings, residency status, and who else you live with to see if you qualify. Most local authorities are happy to help with this.
I live with a disabled person, can I get any help towards council tax?
Yes, you can. You may qualify for a discount. If you live in a larger property than you would otherwise need – such as a downstairs bathroom, or a disabled access kitchen with ramps through the doors, for example, you may be eligible.
If you think this could be you, apply to your council.
I’m 22 and about to start my first job. I live with my parents. How will this affect our council tax payments?
Council tax is generally treated when there are two adults in the house. If you have just moved back home or changed from being a full-time student, you will now be treated as a third adult in the house.
There will be one council tax bill for the household, which your parents may ask for a contribution from you. You won’t receive a council tax bill individually. It is important to always update your local council.
What is a ‘second adult rebate’?
If you are sharing a house with another adult who is not your spouse, you may qualify for ‘second adult rebate’.
This council tax exemption applies if you are living with another adult who you are not in a relationship with – perhaps in a house share arrangement.
Can I go to jail if I don’t pay my council tax?
It’s very rare that someone is sent to prison for unpaid council tax, and this would be a last resort. It can be classed as a criminal offence, and you may receive a final notice if you owe money.
If you are having trouble paying your council tax, speak to your local authority or Citizens Advice who will help you set up a payment plan. Most people pay over 10 months, but this can be split into smaller chunks over 12 months which can make things a little easier.
Can I get a discount on a second home?
This is possible, but each local authority has different criteria – for example if you need a second home for work. Check so you don’t end up with any council tax debt.
I’m worried I pay too much council tax – what can I do?
There is a quick and easy tool online to check if your property falls within the correct council tax band.
You can also ask your local Valuation Office Agency. Be aware they may actually move your property from a lower council tax band to a higher band, so you could end up paying more, so do your homework first.
I rent out a house for short-stay holiday lets – who would pay the Council tax?
This is classed as a short-term let, so the property owner would be liable for paying council tax if the stay is less than six months. Although, if you rent out the property for more than 140 nights, you’d need to pay business rates instead.
Do pensioners pay council tax?
There are some circumstances where some pensioners do not have to pay their council tax.
This is called the Council Tax Reduction scheme. You will need to apply directly to your council to find out more about any pension credit you are entitled to.
Who is exempt from paying Council Tax in England?
If you have someone staying with you in the following roles, it won’t affect your council tax. The following people are referred to as ‘disregarded’ and so do not pay council tax:
- A live-in carer.
- A foreign exchange student.
- Students, student nurses.
- Foreign language assistants.
- Apprentices or young trainees.
- People with disabilities that are not married or who are children under 18 years old.
- Patients in hospitals, care centres, and shelters.
- People with mental impairments.
Rules may differ in Wales and Scotland
It is worth checking with your local council and keeping them up to date on your circumstances.
What months do you not pay council tax?
Most people split their council tax payments over 10 months and pay by direct debit. February and March are the months when council taxes are not paid. However, you can split the payments into 12 smaller amounts and pay each month.
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