Oojal Dhanjal
Six local authorities in England have been granted special permission to bypass the council tax cap of 4.99% this year – part of an effort to help them avoid bankruptcy. One council (Bradford) is even hiking bills by as much as 9.99%, which will push the bill for a Band D resident up by around £170. Council tax goes up each year on 1 April.
Angela Rayner, the deputy prime minister and secretary of state for local government, said the council tax increases were needed to prevent local authorities from “falling further into financial distress”.
Although a record number of councils asked for permission to hike bills above the 4.99% limit this year, Rayner said that the government had only agreed to a “limited number of requests”. She added that, in all cases, the government had not granted the full amount.
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It is unlikely to offer much comfort to struggling households, with council tax bills having risen considerably in recent years.
Research from the Resolution Foundation, an independent think-tank, found that the poorest fifth of households were spending 4.8% of their gross household income on council tax at the start of this decade. That is up from 2.9% in the early 2000s.
“Council tax is consuming a larger share of poor families’ household budgets, who are spending almost as much on these bills as they pay in income tax,” said Lalitha Try, economist at the think-tank. “This terribly-designed tax increasingly resembles the very thing it was meant to replace – the dreaded poll tax,” she added.
Energy bills are also set to rise this April by an average of £111 a year, in line with the April price cap. Water bills will go up by an average of £123.
Which councils are increasing bills the most?
These are the local authorities which are hiking bills by more than the cap:
- Bradford: 9.99%
- Newham: 8.99%
- Windsor & Maidenhead: 8.99%
- Birmingham: 7.49%
- Somerset: 7.49%
- Trafford: 7.49%
Taxpayers in other local authority areas could see their bills rise by up to 4.99% in 2025/26, if their council has social care responsibilities. Areas without social care responsibilities are permitted to hike bills by up to 2.99%.
Raising council tax bills by more than these levels would usually trigger a local referendum, unless the government grants special permission.
The average Band D property in England paid £2,171 per year in council tax in 2024/25. Assuming this were to increase by 4.99%, the average household could find itself paying £2,279 per year from April – a £108 increase.
Band D is the standard measure of council tax, with all other bands being set as a proportion of this band. You may find that you pay more or less than this depending on which band your home falls into, and how much council tax your local authority charges.
You can find further information, including details of any council tax hikes, on your local authority website.
How can I save on my council tax bill?
You may be able to make a large saving by checking your council tax band. If you aren’t in the correct bracket, your council tax could be reduced and you might even be due a large refund.
Some people are also eligible for a discount or reduction in their council tax bill based on their personal circumstances. For example, those who live alone are entitled to a 25% discount. There are also discounts for people with certain disabilities. Similarly, households where everyone is a full-time student don’t have to pay any council tax at all.
If you are on a low income or live with someone who is, you could also qualify for a council tax reduction. The exact criteria vary from council to council.
Ultimately, the best way to work out what you are eligible for is to track down your local council website. If you can't find the information you need there, it is worth getting in touch with the council directly.
Finally, it is worth pointing out that some of the rules have changed in recent years. For example, second homes used to qualify for a discount on council tax bills, however laws which came into force in early 2024 mean local authorities can now charge a council tax premium of up to 100% on second homes. The new rules are part of a bid to increase the availability of housing stock.
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