What is council tax, how much do you pay - and why it could be about to go up

  • Jeremy Hunt is to announce up to £50bn of public spending cuts and tax hikes on Thursday

  • The chancellor could allow authorities to raise council tax above usual levels to help fund social care

  • At the moment, there is a 2.99% increase on the amount council tax can be increased by each year plus 1% on a social care levy

  • Read the full article below which explains how to find out your council tax bill; what do to if you can't afford to pay; and what it actually gets spent on

Chancellor Jeremy Hunt appearing on the BBC One current affairs programme, Sunday with Laura Kuenssberg. Picture date: Sunday November 13, 2022.
Chancellor Jeremy Hunt will announce his autumn budget later this week. (PA)

Millions of Britons could see rises in their council tax, it has been reported.

Chancellor Jeremy Hunt is preparing to announce his tax and spending plans later this week, as the government seeks to plug what it calls a £50bn "fiscal black hole".

He will announce a range of cost-cutting measures in his Autumn Statement on Thursday, with a series of tax hikes and spending cuts expected.

According to the Times newspaper, it is "more likely than not" Hunt and prime minister Rishi Sunak will announce changes that permit local authorities to introduce greater increases in council tax.

What is council tax?

Council tax is a taxation system in England, Scotland and Wales and is a tax on domestic property.

It was introduced in 1993 following the Local Government Finance Act 1992, and replaced the controversial Poll Tax, which itself replaced domestic rates.

How much could council tax go up by?

The Times has reported that the government is eyeing up an increase in council tax as it struggles to plug its fiscal black hole - the estimate for how much more the government needs to borrow to meet its future spending commitments.

Read more: Jeremy Hunt warns 'everyone will pay more tax' after his autumn budget

File photo dated 26/10/22 of Chancellor of the Exchequer Jeremy Hunt arrives in Downing Street, Westminster, London. Mr Hunt has said
Chancellor Jeremy Hunt is reportedly considering allowing local authorities to raise council tax. (PA)

Council tax rises are done by the local authorities themselves - not the Treasury - but the newspaper reported that Hunt is considering raising the amount that councils can increase bills by in order to pay for care home places and home help.

Councils are allowed to increase the tax by a maximum of 2.99% plus a 1% level for social care each year. If they want to raise it by any more, they must submit their plans to a local referendum.

What are council tax bands?

Properties in England and Scotland are separated into eight council tax bands - A to H - and nine bands in Wales - A to I - based on their value. The more valuable the property, the higher the tax.

In England, properties worth up to £40,000 are in the A band, while any home worth more than £320,000 is in the H band.

How do I find out my council tax band?

You can check your council tax band on the government's website by entering its address or postcode.

The same service may be used if you think your council tax band is incorrect.

What do I do if I can't afford to pay council tax?

Colourful houses in Notting Hill, west London. The stamp duty holiday announced in 2020 is expected to be extended until the end of June, as part of budget measures to be announced next week by chancellor Rishi Sunak. Picture date: Wednesday February 24, 2021. Photo credit should read: Matt Crossick/Empics
Millions of Britons could be hit by council tax increases. (PA)

Council tax payments are spread over 10 months, but you can ask your council to spread them over 12 to help reduce the amount in each monthly bill.

According to the government, your council "may give you a one-off discount if you still can’t pay what you owe".

People on a low income or on benefits may be eligible for Council Tax Reduction (sometimes called Council Tax Support) - they can check on the government website.

Dwellers may also be eligible for a reduced council tax bill if, for example, they live on their own.

What does council tax pay for?

Council tax is used to pay for local services such as social care, schools, rubbish and recycling collections, libraries and roads maintenance.

Watch: Jeremy Hunt warns 'everyone' will pay more tax