NEARLY a million homes face council tax bill hikes worth up to £360 after a number of local authorities issued bankruptcy notices.
Households in five council areas across England could be forced to cough up more from next April.
AlamyNearly one million homes could face a council tax rise from next April[/caption]
It comes after three councils issued section 114 notices this year – Birmingham, Nottingham and Woking.
Cheshire East and Bradford Council also look set to issue them in the coming days after struggling to maintain services.
Section 114s are effectively a nod to Government that an authority can’t achieve a balanced budget and may need to hike taxes, such as council tax, to make up for any shortcomings.
Authorities which have previously issued section 114s, including Croydon Council, have been given permission to hike council tax rates by as much as 15% to cover budgets in the past.
And if all five councils, totalling almost a million homes, were to raise rates by this same amount, it could mean bills rising by as much as £360.
That’s based on a Band D property in Nottingham, where these properties currently have to pay £2,411 a year.
Of course, households could end up forking out more or less, depending on what tax band they fit into and where they live.
It comes as the Local Government Association (LGA) warns one in five council leaders think it is likely they will have to issue section 114s this year or in 2024 due to a lack of funding.
It estimates councils in England face a giant £4billion funding gap over the next two years just to keep services running.
Cllr Shaun Davies, LGA chair, said: “The lack of funding for local services in the Autumn Statement has left councils facing a growing financial crisis.
“No council is immune to the risk of running into financial difficulty.
“Many now face the prospect of being unable to meet their legal duty to set a balanced budget and having Section 114 reports issued.”
A spokesperson for the Department for Levelling Up, Housing and Communities told The Telegraph: “Councils are ultimately responsible for the management of their own finances, but we stand ready to talk to any council that is concerned about its financial position.”
How to save money on council tax
You might not be aware, but there are certain circumstances where you can get money off your council tax, or even be exempt from paying it, for example if you’re on certain benefits.
Here’s four avenues you can take:
Council tax exemptions
Certain properties are exempt from paying council tax because of the circumstances of the people living or owning them.
For example, if the home is empty because you are now permanently living in a care home or hospital, you won’t have to pay the bill.
Meanwhile, if the property is occupied solely by students or the home is empty because you are a student, you are exempt.
Plus, if everyone in your home is classed as having a “severe mental impairment” you don’t have to pay.
The law says a person is severely mentally impaired if they have a severe impairment of intelligence and social functioning which is permanent.
This might be the case if you have been diagnosed with dementia or Alzeimers, for example.
If you are providing care for another person and therefore not living in the home, you don’t have to pay council tax either.
You will need to apply for any exemption through your local council.
You can find what council area you fall under by using the Government’s council locator tool.
Council tax discount scheme
You can get a 25% discount on your council tax if you are the only person living in the home or if all others living there are classed as “disregarded”.
Someone is classed as disregarded if they are severely mentally impaired, a carer, in hospital, a care home or hostel, has another main residence or is a student, youth trainee or apprentice.
You should be able to find more detailed lists on who is classed as disregarded on your local council’s website.
You can also get a 50% discount on your council tax if you and everyone else in the home is classed as disregarded.
Council tax disability reduction scheme
You can get your bill slashed if you or someone in your home is classed as “substantially and permanently disabled” and one of the following applies:
there’s a room in the property which is used to meet your needs (such as for the purposes of dialysis or the storage of health equipment)
there’s a second bathroom or kitchen designed to meet your needs
there’s enough space in your home to allow wheelchair access
If the above criteria is met, your council tax bill is reduced to the next lowest band.
If you are already in band A, your bill is reduced by a sixth.
Again, you have to contact your local council about a reduction in these circumstances.
Council tax reductions
In England and Wales, councils offer residents council tax reductions based on their own criteria, but you might be able to get a 100% discount depending on your circumstances.
In most cases, you’ll be offered a reduction if you’re on benefits such as Universal Credit or a low income.
Households in Scotland can get a reduction if they are on a lower income. You can find out more on the Scottish Government’s website.
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