Council tax is the tax that pays for a proportion of local council services. The rest are paid for by business rates and central government.
Council tax is a property tax on domestic properties - but the size of the bill also depends on who lives in the home. Taxpayers who live alone get a 25% discount regardless of their income.
Council Tax Bands
Each property is banded according to its value, which for these purposes is the amount it would have realized, had it been sold on the open market on 1 April 1991 (or 1 April 1993 for properties in Wales). Properties are assumed to be freehold or, in the case of a flat, to have a 99-year lease. They are assumed to be in a reasonable state of repair.
There are eight council tax bands (nine in Wales) - see below. The Valuation Office (part of the Inland Revenue) decides which band your home is in by checking details and viewing it from the exterior.
How is Council Tax Calculated?
Each council sets a tax for Band D and the tax for every other band is calculated from it using a standard formula. For example, in every local authority the tax for a property in Band H is always twice the tax for a property in Band D, and the tax for a property in Band A is always two-thirds the tax for a property in Band D.
