Council tax increase could hit 5% as Britons exposed to ‘surging bills’ | Personal Finance | Finance


Councils that have a social care responsibility have been given the option to increase tax bills by up to five percent without holding a referendum on the policy. Many councils are expected to go for the full five percent, meaning a hefty tax bill increase for residents.

Chancellor Jeremy Hunt announced in the Autumn Statement the core referendum limit for increases in council tax would go up from two percent to three percent, from April 2023. Meanwhile, the adult social care precept flexibility is increasing from one percent to two percent.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, warned local authorities will likely increase bills “as much as they can”.

The group warned the average Band D council tax bill could increase from £1,966 a year to as much as £2,064.

Ms Coles said authorities may decide to maximise their council tax increases because of the pressure of soaring costs for social care, while the National Insurance burden from council worker wages is also increasing.

National Insurance bills are set to increase as the allowance, which is the amount a person can earn before they pay tax, has been frozen at £12,750.

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John O’Connell, chief executive of the TaxPayers’ Alliance, warned raising council tax will increase the burden on struggling Britons.

He said: “Raising the cap on council tax rises will leave households exposed to surging bills.

“Local authorities are undoubtedly facing higher overheads, but significant rate increases can’t be justified while vanity projects and exorbitant salaries persist.

“Instead of expecting taxpayers to bear a greater burden, councils must rein in wasteful spending and commit to keeping costs down.”



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