Council Tax ‘increasingly resembling Poll Tax’

Poorer households are spending almost as much on Council Tax as they pay in Income Tax, think tank claims.

Council Tax is increasingly resembling the Poll Tax system that it replaced, a think tank has claimed.

The Resolution Foundation highlighted how Council Tax bills are soaring while at the same time services are being scaled back and slated its “bizarre, outdated design.”

Between 1993 and 2021, Council Tax bills have soared 77% in real terms and the thinktank claims it is hammering low-income households in particular.

Its research showed that the poorest fifth of households spent 4.8% of their gross household income on the tax, up from 2.9% in 2002-03.

What’s more, these households now spend only £300 less in current prices on Council Tax than they do on Income Tax per year.

“This terribly designed tax increasingly resembles the very thing it was meant to replace – the dreaded Poll Tax,” said Lalitha Try, economist at the Resolution Foundation

The Poll Tax was a hugely unpopular tax that was scrapped in 1991 and replaced by Council Tax in 1993.

Bills to keep rising

Most households will see their Council Tax bills rise by 5% again in April, which is the maximum amount councils are allowed to impose without holding a referendum.

It means the average Band D home in 21 areas will be paying more than £2,500 to their council.

If you’re struggling to pay your Council Tax, have a read of this guide, which explains how you could reduce your bill.

Loads of people could save: it’s estimated that as many as 400,000 households are currently in the wrong tax band.