Council tax rise for millions of homeowners with up to £400 added to average bill within 5 years
MILLIONS of Brits will face a whopping council tax hike in the years to come – with £400 added to the average household’s bill by 2026.
The Government’s own economic forecasters at the Office for Budget Responsibility say the total amount raised in council tax will be a third higher in 2026/27 than in 2019/20.
And receipts will be £12.1billion higher in five years than seven years earlier.
That means the average household will have to stump up £435 extra.
The news comes amid a hit-and-miss Budget day – with low-income workers favoured highly, and smokers and savers set to miss out.
Last year the average Band D council tax rate in England was £1,898.
And this afternoon, the Treasury said local authorities would be able to increase bills by a maximum three per cent without having to hold a local referendum.
Of that amount, one per cent is going to social care.
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The move could see town halls increasing council tax bills by up to £57 in April – potentially taking the average to £1,955.
And that’s on top of the 1.25 per cent National Insurance rise.
Council tax rates have already soared in recent years to help meet rising social care costs.
Boffins at the OBR said: “Net council tax receipts continued to rise in 2020/21 despite the pandemic (by 6 per cent) and are expected to continue to rise at similar rates across the forecast period.
“By 2026/27, we expect receipts to be £12.1billion (33 per cent) above their 2019/20 level.
“This largely reflects policy measures allowing councils to increase the adult social care precept on council tax bills, over and above the almost two per cent increases in core rates included in our baseline forecasts.”
The potential three per cent rise is, however, less than in previous years.
Key talking points:
- How Rishi Sunak’s Budget affects you
- £150bn plan includes cheaper booze and Universal Credit hikes
- Business rates have been slashed in bid to help struggling pubs
- But it’s bad news for smokers as the cost of a pack of 20 spirals
- A shake-up will mean two million Brits can keep hold of an extra £1,000 a year
Last year, councils were able to put up bills by a huge five per cent – although the actual average rise was 4.4 per cent, taking the average Band D bill to £1,898.
Chancellor Rishi Sunak wasn’t able to please everyone today – with some Brits set to lose out.
The big winners include universal credit claimants. The taper rate is to be slashed by 8 per cent in a spectacular victory for The Sun’s Make Universal Credit Work campaign.
The surprise announcement will mean 1.7m workers will be able to keep an extra £1,000 a year of their earnings, on average.
The work allowance is also set to rise by £500.
It’s also good news for drinkers as the price of a pint is set to drop.
However, the Chancellor hinted heavily that interest rates could be set to rise in the near future.
COUNCIL TAX TO SOAR
That could help savers who are battling against rising inflation and rock bottom rates.
But there was no increase to any savings allowances in the Budget to encourage households to set more money aside.
There’s also plenty of bad news for pensioners as the annual and lifetime allowances were frozen again.
And long haul holidays are set to get more expensive as the Chancellor announced a rise in Air Passenger Duty (APD).
A new APD band will cost £91 in tax for seats in Economy on flights of over 5,500 miles.
It’s a £7 increase on the current rate.
Mr Sunak said the tax was about reducing carbon emissions from aviation and would affect fewer than five per cent of passengers.