New Council Tax reforms could see £500 annual increase

Reforms will see many Council Tax bills rise

MORAY’S PLANS TO increase Council Tax by 18% may have been scuppered – but if the Scottish Government plans to revamp the system go ahead many face an equally massive hike.

That is according to plans unveiled this week by First Minister Nicola Sturgeon, who chose a visit to a school to announce the proposals as she insisted additional funding raised would be invested in education.

Under the proposals, current Council Tax bands E to H would all be subjected to higher payments – although the current freeze on council tax for bands A to D would remain in place.

The proposal would mean an average Band E household would face an annual increase of £100 while those in the highest band H would be facing an additional £500. According to the Commission on Local Tax Reform, these changes would generate an additional £100million.

While the council tax freeze will remain in place until April next year, after that Council’s will have ‘discretion’ to impose an increase of up to 3% each year, generating an estimated £70million nationally.

There will, however, be an exemption for this in bands E to H who are currently on low incomes, as well as additional support for families on low incomes over all council tax bands – this will be achieved by extending the relief available to households with children, expected to benefit 77,000 low income families.

Announcing the proposed reforms Nicola Sturgeon said: “Over the past eight years, our council tax freeze has helped households across the country, keeping bills affordable during difficult economic times.

“However, the Commission on Local Tax Reform made clear that the present system could be made fairer. We are choosing to do this in a reasonable and balanced way that will also generate £100 million of additional revenue to invest in schools.

“These reforms to council tax bands will mean no change for three out of every four Scottish households, with those in lower banded properties paying no more than they do now.

“Households will also still, on average, pay less than those on equivalent bands in England and less than they would be paying had the council tax freeze not been in place.

“Overall, these proposals will protect household incomes, support investment in our schools, make local taxation fairer and ensure local authorities continue to be properly funded while becoming more accountable.”