Council Tax and the Precept – what are they, and how are they calculated? An update for 2018-19

If you signed up to receive your Council Tax by e-mail it’s likely your bill for the new financial year 2018-19 arrived in your inbox in the last week.  For those who prefer the more traditional route (post) it might take a little longer for the bill to drop through your letterbox.  Either way, this is the time of year when we remind everyone what Council Tax is and how it’s calculated.

The following paragraphs are designed to increase readers’ understanding of the Council Tax system.  The guidance in it is updated and re-issued every year.  It is not comprehensive, and the Clerk would be happy to hear from any readers who think it should read differently, or who may have spotted errors or inconsistencies.  It will be added to on an ongoing basis.

What is Council Tax?
It is the system of local taxation used in England, Scotland and Wales to part fund the services provided by local government in each country.  It was introduced in 1993 by the Local Government Finance Act 1992, as a successor to the unpopular Community Charge (also known as the Poll Tax), which briefly replaced the older system of rates.  The basis for the tax is residential property, with discounts for single occupants (who usually pay 75% of the full bill).

What does it pay for?
Local services such as housing, benefits, planning, transport, highways, police, fire, libraries, leisure and recreation, rubbish collection and disposal, environmental health and trading standards. It does not pay for health services.  It’s a one-size-fits-all tax.  If your village has, for example, no street lighting, you still pay the full tax.

Who receives it?
When sending out the annual Council Tax Bills, South Norfolk Council provide a breakdown of where the money goes.  The breakdown as a percentage of the overall bill for Claxton for the new year, 2018-19, will be as follows:

Beneficiary in 2018-19 Share of total payment % change in actual amount paid from previous year
Norfolk County Council 76.0% +6.0%
South Norfolk District Council 8.3% +3.6%
Norfolk Police and Crime Commissioner 13.2% +5.5%
Claxton Parish Council 2.5% +1.1%

Norfolk County Council’s increase includes 3.0% for the Adult Social Care budget.

How much is it?
Exactly how much you pay depends on the value of your property as determined back in 1991.  The revaluation of all properties has been discussed several times since but no Government has decided to take this very expensive exercise forward, so the 1991 values remain the basis for banding.  New houses are slotted in alongside other similar properties.

In England there are 8 property bands from A to H (with H being the highest).  Claxton currently has an unusually high proportion (18%) of high band households in the village with 16 properties in Band G and 1 in Band H.  The differences between bands are calculated by using Band D as the standard, with lower Bands paying less and higher Bands paying more.  Ratios are calculated in ninths, as follows:

Proportion/ Percentage Band 2018-19 Claxton Council Tax Proportion/ Percentage Band 2018-19 Claxton Council Tax
6/9 or 67% A £1,160.48 11/9 or 122% E £2,127.53
7/9 or 78% B £1,353.89 13/9 or 144% F £2,514.35
8/9 or 89% C £1,547.30 15/9 or 167% G £2,901.19
9/9 or 100% D £1,740.71 18/9 or 200% H £3,481.42

What is the Precept?
The Precept is the annual funding the Parish Council receives from South Norfolk Council to run itself every year.  For the past several years it has been around the £4,000 mark.  Added to that is whatever Council Tax Support grant South Norfolk give the Parish Council (see below) to make up the budget, along with a small number of other items.

What does the future hold?
The old system of Council Tax Benefits will disappear completely in the next couple of years. For 2018-19 South Norfolk Council is providing additional funding for Claxton but at a level below the current year (£25 against £51 this year).  At its meeting on 17 January the Parish Council considered all the options and agreed to seek a Precept of £4,209 which it judges will be sufficient to meet all its necessary expenditure in 2018-19 as well as to keep the Council’s reserves at the appropriate level (roughly 6 months’ Precept, say £2,000).

This will mean a very small increase in the Parish Council element of Council Tax for 2018-19, ranging from 32p for Band A properties up to 94p for Band H properties annually.

If you have any questions just ask the Clerk.  He will do his best to answer them.

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