Ask most homeowners in this country about council tax, and more specifically their thoughts on the valuation bands that determine how much they pay, and you can probably expect a blunt answer. It has been claimed that the fear of responses like this could perhaps help to explain the coalition government’s apparent indifference to a revaluation of domestic properties for the purpose of council tax calculation.
The introduction of council tax more than two decades ago saw the arrival of a property tax that was heralded as a much fairer alternative to the hugely unpopular poll tax of the Thatcher era. It shifted the focus to property rather than people, and since 1991 council tax has been levied according to relative property values.
However, the argument over the need for a revaluation of domestic properties has again resurfaced, with leading financial analysts claiming that the absence of a recent revaluation undermines the very factor used to calculate it. Successive governments have also been accused of avoiding the issue for fear of the political fallout among residents likely to face higher charges.
Paul Johnson, Director of the Institute for Fiscal Studies, has described council tax as becoming ‘increasingly absurd’ because of the government’s reluctance to consider a revaluation of homes in England.
At his annual Chartered Tax Adviser address he blamed recent governments for making tax policy ‘needlessly complicated, less efficient and open.’
He added: “Council tax, our main property tax, is assessed on relative property values which will soon be a quarter of a century out of date.”
Making reference to last year’s 2015/16 spending review, Mr Johnson also commented that plans to extend cash incentives for a freeze of council tax that extends into a sixth year had ‘the potential for considerable long-term effects.’
He continued with an assertion that this appears to have given rise to a trend that is hard to reverse, in which case a hugely important component of the tax system will be weakened and decline.
If you feel you have been placed in the wrong council tax band or are in dispute with your council over your council tax payments, Council Tax Advisors are on hand to offer free, independent advice. They have helped more than 10,000 people to date resolve their council tax issues, so don’t hesitate to contact them for more information.