Council Tax bills are likely to go up by an average of £100 in April next year, with an expected five per cent rise to cover £2.4 billion “black hole”.
Conservative Party leader Kemi Badenoch pressed Sir Keir Starmer to confirm whether the cap on council tax would be increased or not in the new year, with the Prime Minister sidestepping the question in the Commons.
Speaking after Prime Minister’s Questions, the Prime Minister’s press secretary told reporters that “the threshold remains the same”.
Under current rules, councils can increase tax rates by up to five per cent each year and require Government permission or a referendum to go beyond this figure.
In recent years, most local authorities have increased by this maximum.
The system for deciding how much you pay varies depending on where you live in the UK, but is based on property value rather than income.
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How does Council Tax work?
Properties in England are split into eight bands (A-H), depending on the price they would have sold for in April 1991, when valuations for the current system were made.
Scottish homes are split into the same number of bands, also based on their value in April 1991, but the band ranges are different, to reflect a different property system.
Properties in Wales were re-valued in 2003, so property values are based on their market value on 1 April 2003. There are nine valuation bands, labelled A-I.
Government statistics show the average band D council tax set by local authorities in England for 2024/25 was £2,171, which represented an increase of £106 or 5.1% on the previous year.
The main inflation figure fell to 1.7% in September although it is expected to rise again towards the end of this year, as energy costs go up over the winter.
Final figures will be published as part of the 2025-26 local government finance settlement.
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