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28/09/2006
Millions struggling to pay council tax
More than two million households are struggling to pay council tax bills, according to a report by the Joseph Rowntree Foundation.
The report found that those on low incomes were particularly badly affected, because they had to pay a larger percentage of their take-home pay than those on higher wages.
The report found that nearly three million summonses for non-payment of council tax were issued each year, with low income cited as the main reason for failing to pay the bills.
Dr Michael Orton, author of the report, said: "Despite having a job, the struggle to pay council tax is part of the day-to-day difficulty of making ends meet for many people. Low income creates vulnerability to missing payments and repaying arrears."
The report said that council tax is regressive, meaning that it takes a larger share of income from those on lower and middle earnings than from those on higher incomes.
Council tax accounts for 4.9% of gross income for the bottom fifth of households, compared to 3.7% for households in the second to bottom fifth and just 1.7% for those in the top fifth, the report found.
It also suggested that the system by which people could claim council tax benefits was complex.
The report concluded that consideration should be given to making council tax fairer by revising the proportion of the tax levied on each valuation band.
Dr Orton said: "Low income households in high valuation properties are exceptional. Consideration needs to be given to the position of the far larger numbers of low and middle income households who currently pay proportionately more tax."
The Conservatives said that council tax was the "ultimate stealth tax". Shadow Local Government Secretary Caroline Spelman said: "A third of the basic state pension increase since 1997 is now ruthlessly snatched back in local taxes.
"Labour's increased use of means tested benefits and complex application forms has resulted in a reduced take-up of council tax benefit, so more people on lower incomes are paying higher council taxes."
(KMcA/EF)
The report found that those on low incomes were particularly badly affected, because they had to pay a larger percentage of their take-home pay than those on higher wages.
The report found that nearly three million summonses for non-payment of council tax were issued each year, with low income cited as the main reason for failing to pay the bills.
Dr Michael Orton, author of the report, said: "Despite having a job, the struggle to pay council tax is part of the day-to-day difficulty of making ends meet for many people. Low income creates vulnerability to missing payments and repaying arrears."
The report said that council tax is regressive, meaning that it takes a larger share of income from those on lower and middle earnings than from those on higher incomes.
Council tax accounts for 4.9% of gross income for the bottom fifth of households, compared to 3.7% for households in the second to bottom fifth and just 1.7% for those in the top fifth, the report found.
It also suggested that the system by which people could claim council tax benefits was complex.
The report concluded that consideration should be given to making council tax fairer by revising the proportion of the tax levied on each valuation band.
Dr Orton said: "Low income households in high valuation properties are exceptional. Consideration needs to be given to the position of the far larger numbers of low and middle income households who currently pay proportionately more tax."
The Conservatives said that council tax was the "ultimate stealth tax". Shadow Local Government Secretary Caroline Spelman said: "A third of the basic state pension increase since 1997 is now ruthlessly snatched back in local taxes.
"Labour's increased use of means tested benefits and complex application forms has resulted in a reduced take-up of council tax benefit, so more people on lower incomes are paying higher council taxes."
(KMcA/EF)
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