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Why do Council Tax rates vary so much?


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Can't find many answers to why there are such extreme differences in council tax rates -literally four times from lowest to highest. What's behind it? And why is Westminster the lowest when the costs of providing services there must be highest in the country?

 

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Council Tax Index 2019/20

Annual property taxes in the UK are low by international standards.

This table shows average Band D council tax payable annually, by council area.

VERY LOW TAX

Rank Council Tax £ Change
1 Westminster 434 +4.10%
2 Wandsworth 450 +4.99%

LOW TAX

Rank Council Tax £ Change
3 Hammersmith & Fulham 762 +4.70%
4 City of London 846 +4.99%
5 Kensington & Chelsea 887 +4.99%
6 Newham 1,011 +4.80%
7 Tower Hamlets 1,020 +3.40%
8 Windsor & Maidenhead 1,036 +2.77%

AVERAGE TAX

Rank Council Tax £ Change
9 Southwark 1,066 +2.99%
10 Lambeth 1,125 +2.99%
11 Hackney 1,134 +4.99%
12 Hillingdon 1,140 +2.40%
13 Islington 1,169 +2.99%
14 Greenwich 1,169 +2.99%
15 Ealing 1,192 +3.99%
16 Bromley 1,216 +4.99%
17 Barnet 1,225 +2.99%
18 Hounslow 1,226 +4.99%
19 Merton 1,232 +4.99%
20 Barking & Dagenham 1,236 +2.99%
21 Northamptonshire 1,236 +4.99%
22 Hampshire 1,237 +2.99%
23 Somerset 1,240 +3.99%
24 Camden 1,242 +3.99%
25 Staffordshire 1,246 +2.95%
26 Worcestershire 1,261 +3.99%
27 Brent 1,262 +4.99%
28 Lewisham 1,264 +4.99%
29 Essex 1,270 +3.99%
30 Isles of Scilly 1,277 +2.99%
31 Thurrock 1,288 Frozen
32 Wigan 1,290 Frozen
33 Suffolk 1,292 +3.99%
34 Leicestershire 1,292 +3.99%
35 Trafford 1,292 +3.99%
36 Lincolnshire 1,292 +4.95%
37 Gloucestershire 1,294 +4.99%
38 Kent 1,299 +4.99%
39 Telford & Wrekin 1,302 +3.20%
40 Bracknell Forest 1,304 +2.99%
41 Stoke-on-Trent 1,306 +2.99%
42 Redbridge 1,306 +3.99%
43 North Yorkshire 1,311 +4.99%
44 Enfield 1,311 +3.99%
45 Cambridgeshire 1,312 +4.98%
46 Haringey 1,320 +2.99%
47 Derbyshire 1,323 +3.99%
48 Dudley 1,329 +4.49%
49 Buckinghamshire 1,330 +2.99%
50 York 1,330 +3.25%
51 Peterborough 1,344 +2.99%
52 Lancashire 1,347 +3.99%

HIGH TAX

Rank Council Tax £ Change
53 Doncaster 1,351 +4.99%
54 Solihull 1,358 +2.90%
55 Bexley 1,358 +4.99%
56 Hertfordshire 1,360 +2.99%
57 Norfolk 1,362 +2.99%
58 Swindon 1,366 +3.99%
59 Slough 1,367 +2.63%
60 Manchester 1,371 +3.49%
61 Kingston-upon-Hull 1,371 +2.99%
62 Bradford 1,373 +2.99%
63 Waltham Forest 1,373 +3.99%
64 Sutton 1,374 +4.99%
65 North Somerset 1,379 +2.75%
66 Birmingham 1,381 +4.99%
67 Milton Keynes 1,382 +2.99%
68 Southend-on-Sea 1,382 +4.49%
69 West Sussex 1,384 +4.99%
70 Devon 1,384 +3.99%
71 Wakefield 1,384 +3.99%
72 Cumbria 1,385 +3.99%
73 Shropshire 1,388 +3.99%
74 Leeds 1,393 +3.99%
75 Croydon 1,396 +3.99%
76 Portsmouth 1,397 +4.49%
77 Bath & North East Somerset 1,401 +3.95%
78 Sandwell 1,401 +3.99%
79 Havering 1,408 +3.25%
80 Sunderland 1,414 +3.99%
81 Medway 1,415 +2.99%
82 Derby 1,417 +2.99%
83 Halton 1,419 +2.99%
84 Warwickshire 1,432 +5.00%
85 East Sussex 1,435 +2.99%
86 Warrington 1,436 +2.98%
87 St Helens 1,446 +2.99%
88 Cheshire East 1,446 +2.99%
89 East Riding of Yorkshire 1,449 +2.99%
90 Surrey 1,454 +2.99%
91 Wiltshire 1,457 +2.99%
92 Harrow 1,464 +4.99%
93 Oxfordshire 1,469 +2.99%
94 Tameside 1,469 +3.99%
95 North Lincolnshire 1,471 +2.91%
96 Nottinghamshire 1,476 +3.99%
97 Luton 1,478 +2.99%
98 Bournemouth, Christchurch & Poole (b) 1,479 +2.28%
99 Richmond-upon-Thames 1,483 +4.99%
100 Barnsley 1,483 +4.49%
101 Wokingham 1,484 +3.49%
102 South Gloucestershire 1,484 +2.99%
103 Knowsley 1,485 +2.99%
104 Bolton 1,486 +2.25%
105 Calderdale 1,489 +2.99%

VERY HIGH TAX

Rank Council Tax £ Change
106 Central Bedfordshire 1,501 +1.00%
107 Torbay 1,503 +2.99%
108 West Berkshire 1,505 +2.99%
109 Darlington 1,506 +2.99%
110 Bedford 1,508 +2.49%
111 Kirklees 1,510 +2.99%
112 Blackburn with Darwen 1,510 +2.99%
113 Plymouth 1,514 +2.99%
114 Herefordshire 1,515 +4.90%
115 Cheshire West and Chester 1,520 +4.99%
116 Rotherham 1,522 +2.99%
117 Wirral 1,523 +2.99%
118 Cornwall 1,527 +3.99%
119 North East Lincolnshire 1,530 +2.98%
120 Southampton 1,536 +2.99%
121 Bury 1,551 +2.94%
122 Kingston-upon-Thames 1,551 +4.99%
123 Leicester 1,552 +3.00%
124 Blackpool 1,556 +2.99%
125 Sheffield 1,559 +2.99%
126 South Tyneside 1,567 +3.95%
127 North Tyneside 1,568 +2.99%
128 Sefton 1,570 +2.99%
129 Salford 1,577 +3.99%
130 Redcar & Cleveland 1,577 +3.99%
131 Rochdale 1,582 +3.99%
132 Stockton-on-Tees 1,589 +2.90%
133 Durham 1,591 +4.99%
134 Brighton & Hove 1,596 +2.99%
135 Isle of Wight Council 1,599 +2.99%
136 Wolverhampton 1,617 +4.99%
137 Coventry 1,621 +2.94%
138 Oldham 1,624 +3.99%
139 Reading 1,627 +2.99%
140 Dorset Council (b) 1,630 +2.99%
141 Stockport 1,642 +2.75%
142 Newcastle-upon-Tyne 1,643 +3.95%
143 Middlesbrough 1,645 +4.99%
144 Liverpool 1,650 +2.99%
145 Hartlepool 1,685 +3.90%
146 Bristol 1,691 +3.99%
147 Northumberland 1,696 +3.80%
148 Rutland 1,705 +4.99%
149 Walsall 1,714 +3.99%
150 Nottingham 1,739 +2.99%
151 Gateshead 1,754 +3.99%

 

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Have thought this for a long time.....was based on the property valuation ~20 years ago....the now unfairness of it all is that some of those that own the greatest value property pay the least in council tax today.

You could say high density areas pay the least because there are more properties to collect from, but they also get the best services and more spent per capita than many other places do, places that do not have any public transport they could be proud about or not even have a hospital anywhere close to them.....those with the least pay the most...same as it ever was.;)

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5 hours ago, winkie said:

Have thought this for a long time.....was based on the property valuation ~20 years ago....the now unfairness of it all is that some of those that own the greatest value property pay the least in council tax today.

You could say high density areas pay the least because there are more properties to collect from, but they also get the best services and more spent per capita than many other places do, places that do not have any public transport they could be proud about or not even have a hospital anywhere close to them.....those with the least pay the most...same as it ever was.;)

 

the most significant difference i can think of is that Westminster etc will have far more high band payers, so will get higher revenues. In poor areas there would be relatively few D band payers, where being in that band would give you a much bigger house. so in a way maybe it's wrong to compare rates for the same band between councils, not sure. 

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Somewhere wealthy like westminster, high percentage of those that live there full payers, can raise lots from parking charges and business rates, doesnt have to provide social infrastructure needed in poorer areas. Somebody will say it is a less wasteful tory council, but those advantages undeniable. Ironically, if you live in a poorer area, you pay more for the privilege. 

None of this is accidental. The council tax was a replacement for untenable poll tax. Its really the poll tax light. The deliberate intention was to remove taxation from housing wealth. 

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Many factors. The rates published are for "band D" which is for houses worth between £68k to £88k in 1991. 

I don't know how much of the council tax revenue collected the council gets to keep or if they get a grant to cover the tax they are unable to collect but "left behind" areas will have significant poverty related expenditure. On schools, kids in care, housing, cleaning up fly tips, social care (no valuable house to cover costs). 

I'm personally against council tax, It must cost hundreds of millions to collect/process council tax support claims, it's based on 1991 house prices and not a proportional tax (£100m mansion only pays 3x what someone in a bedsit would).

It's also fairly absurd that those on benefits get handed money by one department of the government then have to pay it to another department (council) with the admin expense/inevitable loss on the way. 

Council tax only represents 5% of the total tax take. In my mind it'd make more sense to add maybe 1/2 percent to the income tax rate/reduce benefits by about 5% 

Edited by Council estate capitalist
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5 hours ago, Ghostly said:

Those councils in the low tax areas also have other significant sources of income from business rates, tourism, etc. Less need to hike CT rates.

Business rates are redistributed - Westminster barely keeps £100 million of the £2.3 billion it collects in business rates for local services. The rest gets  transferred via the government to the rest of England to pay for local services.

What Westminster does get to keep is its £100m a year parking income - that can be used to subsidise road maintenance, infrastructure and also pay for the Freedom pass concessionary travel scheme.

A lot of the differences are ultimately just down to historical quirks when the national business rates system was set up under Mrs Thatcher in the late 1980s - and its never really unwound. Lets just say the initial arrangements were set up to benefit certain councils like Westminster and Wandsworth - and because MPs often have homes in those areas no one has ever truly unwound it.

But that may all start to change next year - if the government is serious about 'levelling up'!

It does of course lead to the current obscenity whereby an oligarch living on his own in a £70 million Belgravia home can pay as little as £1200 a year in council tax - net of single person discount - as Westminster's tax is so low. In LA, New York or Paris they would be paying hundreds of thousands in annual property tax on such a property.

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The system is long overdue for change.....like care costs, dragging their heels and successive governments kicking into the long grass hoping nobody notices....perhaps there are vested interests in keeping the status quo.?

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12 hours ago, Council estate capitalist said:

Many factors. The rates published are for "band D" which is for houses worth between £68k to £88k in 1991. 

I don't know how much of the council tax revenue collected the council gets to keep or if they get a grant to cover the tax they are unable to collect but "left behind" areas will have significant poverty related expenditure. On schools, kids in care, housing, cleaning up fly tips, social care (no valuable house to cover costs). 

I'm personally against council tax, It must cost hundreds of millions to collect/process council tax support claims, it's based on 1991 house prices and not a proportional tax (£100m mansion only pays 3x what someone in a bedsit would).

It's also fairly absurd that those on benefits get handed money by one department of the government then have to pay it to another department (council) with the admin expense/inevitable loss on the way. 

Council tax only represents 5% of the total tax take. In my mind it'd make more sense to add maybe 1/2 percent to the income tax rate/reduce benefits by about 5% 

It is a bad tax but I would rather have LVT rather than increasing income tax.

Ideally I would just have LVT.

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