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Little Frank

The Council Tax Recession - The Tax man cometh

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On 3/7/2017 at 11:29 AM, anteos said:

My council tax bill has arrived complete with 5% increase, £35 green bin charge etc.

And then I look at the pension fund, it has a £226m deficit. £13m or ten percent of council expenditure was paid in last year.

The choice is between reduced services or tax hikes. Where is the option to cap salaries and cancel the final salary scheme?

16% pay rise for my council CEO last year.

 

 

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40 minutes ago, Tiger131 said:

My band C flat is already about  1.5k a year, at 5% yearly increases that will double every 14 years. Can anyone explain how in the future people will be able to stump up 3, 4, or 5k a year in council tax and we still have a functioning consumer economy Will there be a mad dash for people, particularly retired to move into band A homes? Perhaps the councils will demand that older people who can't pay will have to sign over their home after death in leiu of paying their bills and social care, this could get get very nasty indeed.

Wage rises, silly billy. Shapps said so, in 2010. The same mechanism has made housing cheap since then too.

 

:wacko:

Edited by The Knimbies who say No

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1 hour ago, Tiger131 said:

My band C flat is already about  1.5k a year, at 5% yearly increases that will double every 14 years. Can anyone explain how in the future people will be able to stump up 3, 4, or 5k a year in council tax and we still have a functioning consumer economy Will there be a mad dash for people, particularly retired to move into band A homes? Perhaps the councils will demand that older people who can't pay will have to sign over their home after death in leiu of paying their bills and social care, this could get get very nasty indeed.

It's only a matter of time before housing equity is taken into account, not just for old people. Help to Buy Bail Banks is a step in that direction. Shared equity with the governbankment that can be upped by percentages here and there to cover living costs. So when you die you just hand over the asset you have worked for all your life. That's what makes the following generation have to work even longer. 

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18 hours ago, Hullabaloo82 said:

They already did cancel the final salary scheme.

All new entrants to the lgps (or civil service, teachers and nhs pensions for that matter) now accrue benefits based on a career average. The lump sum entitlement was phased out in 2008 or so. Salaries were subject to a pay freeze between 2010 and 2013 at most councils.

Despite the fat cat headline grabbers most public sector pensions and salaries are not extravagant. According to my local lgps annual report the average pensioner gets paid about 4 grand a year out of it. 

The really story here is conservative sleight of hand; reducing central government taxes like income tax whilst also reducing central government subsidies to local government meaning the burden for raising funding for services (many of which, such as adult social care, are statutory obligations) falls on councils. Giving with one hand taking with the other and forcing councils to be the bad guy and make tough decisions.

Since 2006 ish the minimum earning threshold is about about 5 grand meaning an extra grand off the tax bill for full time workers. A 5% increase in council tax will be about 50 to 75 quid for most people and even that will be woefully inadequate to cover costs.

So yes, services will stop being provided and go to private providers who will jack the price up. Many councils actually froze tax during the recession. I doubt Serco will be as accomodating.

How do they define an average pensioner?  Is that the average for everyone working 25+ years at the pension or including people who were there for 2 months and get £25pa pension?

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5 hours ago, The Knimbies who say No said:

Wage rises, silly billy. Shapps said so, in 2010. The same mechanism has made housing cheap since then too.

 

:wacko:

Perhaps in the future the local councils can find a way of taxing the offshore based robots and supercomputers that are going to render most  rule based desk jobs and repetitive physical jobs obsolete. The long term pressure on wages is downwards not upwards so good luck taxing earned income. I suspect there are going to be a lot more people taking up a traveller lifestyle because the fixed home based way of living is going to be unviable by a combination of taxes and house prices. Doubltless TPTB will try to outlaw the American style trailer parks that are going to be springing up to force people into living in taxable permanent structures.

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On 07/03/2017 at 11:27 AM, rantnrave said:

Small house = less council tax. Might encourage some downsizing and extra supply to the market??

Not necessarily, the folks stampeding for Band A properties are just going to be competing in the same market at the FTBs.

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Just now, Democorruptcy said:

It's only a matter of time before housing equity is taken into account, not just for old people. Help to Buy Bail Banks is a step in that direction. Shared equity with the governbankment that can be upped by percentages here and there to cover living costs. So when you die you just hand over the asset you have worked for all your life. That's what makes the following generation have to work even longer. 

Lifetime ISA is a step in this direction too. Houses taxed, charging orders made and lifetime funds plundered when your role is made redundant.

Honestly see myself having no fixed abode in 10 years but I will have £125k in the bank and a similar sum in my SIPP. I'll follow the sun and take my paraglider wherever I go. 

Edited by longtomsilver

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4 hours ago, iamnumerate said:

How do they define an average pensioner?  Is that the average for everyone working 25+ years at the pension or including people who were there for 2 months and get £25pa pension?

Fair question and a good point.

The figure they provide as an average is literally just the total benefits payable for the year divided by the total number of pensioners. 

So yes, there is a big difference between the cleaner that was in the scheme for a couple of years and the former chief executive that retired after 30 years with a 6 figure lump sum. 

I would say the average quoted is still a fairly decent metric though. After all the boomers are retiring in droves now. 

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On 08/03/2017 at 1:00 PM, Tiger131 said:

My band C flat is already about  1.5k a year, at 5% yearly increases that will double every 14 years. Can anyone explain how in the future people will be able to stump up 3, 4, or 5k a year in council tax and we still have a functioning consumer economy Will there be a mad dash for people, particularly retired to move into band A homes? Perhaps the councils will demand that older people who can't pay will have to sign over their home after death in leiu of paying their bills and social care, this could get get very nasty indeed.

3 bed semi in Leicester.£1.5k.5% increase.................clearly noone who works for the local council lives there.It's a poor town in general,whose population has just got poorer.

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Compared with other housing-related costs, owner occupiers’ housing costs make the largest contribution to the CPIH 12-month rate 

Figure 4 shows the contribution of OOH and Council Tax to the CPIH inflation rate in the context of wider housing-related costs. OOH has consistently been the largest contributor to the rate and increases in Council Tax in 2016 mean that this is now the second largest. Taken together, these 2 components account for 0.5 percentage points of the overall CPIH rate of 2.3%.

The reduction in the contribution from rents is likely to be a result of a policy to reduce social housing rent starting from April 2016. The negative contribution from utility bills that was seen throughout 2015 and 2016 has subsided in recent months, whilst regular maintenance and repair, along with water and sewerage services, tend to make a very small contribution to the 12-month rate.

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest#compared-with-other-housing-related-costs-owner-occupiers-housing-costs-make-the-largest-contribution-to-the-cpih-12-month-rate

 

Just wait till the April mega council tax hikes kick in......

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My council tax is going up 4.9% roughly equivalent to 1.5 working days extra every year working for the tax man. 

Electricity E.on up by 1 more day.

For various reasons I'll be getting round to purchasing our first television licence in 16 years (2 days).

What I find amazing is where do ordinary folk find the extra £7-10 a month when their net disposal incomes are <£50. That really is all the fudge room a lot of people I work with have to play with. 

Edited by longtomsilver

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26 minutes ago, longtomsilver said:

My council tax is going up 4.9% roughly equivalent to 1.5 working days extra every year working for the tax man. 

Electricity E.on up by 1 more day.

For various reasons I'll be getting round to purchasing our first television licence in 16 years (2 days).

What I find amazing is where do ordinary folk find the extra £7-10 a month when their net disposal incomes are <£50. That really is all the fudge room a lot of people I work with have to play with. 

They can't. Hence why it will crater demand.

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ive just stopped paying it. what they gonna do, and ya know what many many many people have and are about to do the exact same. the payment figures only look good because over half the people are not paying full whack themselves with benifits. its the average working person that is the biggest non payer and its because its far to much after housing and transport etc. maybe it really is better to just go on the dole.

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45 minutes ago, jimmy2x3 said:

ive just stopped paying it. what they gonna do, and ya know what many many many people have and are about to do the exact same. the payment figures only look good because over half the people are not paying full whack themselves with benifits. its the average working person that is the biggest non payer and its because its far to much after housing and transport etc. maybe it really is better to just go on the dole.

Risky strategy. My local council have just restarted seeking committal orders (ie jail) for serial non payment of council tax. Not to mention the impact on your credit rating. 

Oh and being on the dole no longer applies; Council Tax benefit was phased out in 2013 (I think) to be replaced with council tax reduction funding. I think the idea was you had to reduce total costs by ten percent to qualify for the funding.  Most places went with an 'everybody pays something' so the chances of finding somewhere where unemployment gets you a council tax break.

Not to mention the fact that council tax (in reality, despite the accounting fudge) supports delivery of services like social care and schools which are kind of important. 

As long as you don't mind a spell in jail, an inability to rent let alone buy a house  (or obtain any credit) and forking out thousands of pounds to have someone wipe your **** in future (or your kids don't mind) because local government has collapsed due to lack of funding go ahead. 

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11 hours ago, Frizzers said:

Live on a boat. then you don't pay it

Not any more. Residential moorings now have to pay council tax and VAT on your mooring fees. The govt has noticed how many people have moved onto the water. They have to close of that escape route otherwise people will be leading happy fulfilling lives even on a low income.

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On 08/03/2017 at 8:13 PM, Tiger131 said:

Not necessarily, the folks stampeding for Band A properties are just going to be competing in the same market at the FTBs.

Good luck actually finding Band A properties in some areas. When I lived in east London, the crappy 1BR flat I had was Band B. I used to joke to the missus that Band A must be a dog kennel. 

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22 hours ago, longtomsilver said:

My council tax is going up 4.9% roughly equivalent to 1.5 working days extra every year working for the tax man. 

Electricity E.on up by 1 more day.

For various reasons I'll be getting round to purchasing our first television licence in 16 years (2 days).

What I find amazing is where do ordinary folk find the extra £7-10 a month when their net disposal incomes are <£50. That really is all the fudge room a lot of people I work with have to play with. 

It'll be a lot less than 16 years if they lose control of inflation - that obviously could never happen having unleashed hundreds of billions of funny money into the system.

 

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On 07/03/2017 at 11:29 AM, anteos said:

My council tax bill has arrived complete with 5% increase, £35 green bin charge etc.

And then I look at the pension fund, it has a £226m deficit. £13m or ten percent of council expenditure was paid in last year.

The choice is between reduced services or tax hikes. Where is the option to cap salaries and cancel the final salary scheme?

Local Government Pension Scheme hasn't offered final salary for years now.. Are councils part of this or something different? 

The older, bloated salaries in my area of work are being brought in line with modern pay scales and progression.

There might of been golden plated salaries and pensions in the past but these haven't been offered for over a decade now where I am. 

Edited by Assume The Opposite

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10 hours ago, StainlessSteelCat said:

Good luck actually finding Band A properties in some areas. When I lived in east London, the crappy 1BR flat I had was Band B. I used to joke to the missus that Band A must be a dog kennel. 

Plenty of Band A properties "oop North", now fetching 170k - 200k in the popular areas where I live.

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13 hours ago, prodigal sheeple said:

Not any more. Residential moorings now have to pay council tax and VAT on your mooring fees. The govt has noticed how many people have moved onto the water. They have to close of that escape route otherwise people will be leading happy fulfilling lives even on a low income.

bastards

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10 hours ago, Assume The Opposite said:

Local Government Pension Scheme hasn't offered final salary for years now.. Are councils part of this or something different? 

The older, bloated salaries in my area of work are being brought in line with modern pay scales and progression.

There might of been golden plated salaries and pensions in the past but these haven't been offered for over a decade now where I am. 

 

My local council moved from final to average salary very recently - last year I believe.

I work for a private company, and have a matched 5% pension contribution.  I'd definitely go for an average salary pension if I could - defined benefit over defined contribution any day.

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@Little Frank

I think I've worked it out. 

 

As the Oakfield Rd car park will come under Altair and now it seems the council is selling the Regent Rd car park from under our noses, they must be raising the council parking rates to 'market' rates so these private entreprises (who I am sure are not giving anything that could be construed as backhanders) will do their civic duty and take on the role of providing amenity parking in town.  

 

The owners of the existing multi storey/roof top care park must have been grumbling for years about the low council charges. Was the best thing about shopping in town - it used to cost pence to park.

Edited by 24 year mortgage 8itch
Local geography faux pas

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On 3/21/2017 at 11:21 PM, Hullabaloo82 said:

Risky strategy. My local council have just restarted seeking committal orders (ie jail) for serial non payment of council tax. Not to mention the impact on your credit rating. 

Oh and being on the dole no longer applies; Council Tax benefit was phased out in 2013 (I think) to be replaced with council tax reduction funding. I think the idea was you had to reduce total costs by ten percent to qualify for the funding.  Most places went with an 'everybody pays something' so the chances of finding somewhere where unemployment gets you a council tax break.

Not to mention the fact that council tax (in reality, despite the accounting fudge) supports delivery of services like social care and schools which are kind of important. 

As long as you don't mind a spell in jail, an inability to rent let alone buy a house  (or obtain any credit) and forking out thousands of pounds to have someone wipe your **** in future (or your kids don't mind) because local government has collapsed due to lack of funding go ahead. 

Co Durham still has 100% council tax benefit.The Labour council thought it was better to keep it and increase the council tax on people who work on minimum wage.Council tax funds pensions and management wages/sick pay.At least around 45% of it does.

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