Council tax bills could rise by 4.99 per cent for households in April, higher than the rate of inflation, according to a new report. Households in England will pay more in an upcoming tax raid despite Prime Minister Rishi Sunak’s promise to ease the financial burden on taxpayers.
The Department for Levelling Up, Housing and Communities (DLUHC) officials have told local authorities they expect the maximum possible hike, The Guardian reports. If applied, this increase would add £100 to a typical bank D Council Tax bill in a matter of months.
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Council Tax is expected to rise in April
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Both Mr Sunak and Chancellor Jeremy Hunt have floated cuts to income tax in a bid to attract voters ahead of the next General Election.
However, local authority leaders believe this move to raise council tax would exacerbate the existing tax pressures many low income households are dealing with.
David Phillips, an economist at the Institute for Fiscal Studies (IFS), suggested the country’s poorest would be most impacted as the levy makes up a larger proportion of this demographic's monthly outgoings compared to wealthier counterparts.
He explained: “Increasing council tax while cutting most direct taxes – for example, National Insurance, income tax and especially capital gains tax and inheritance tax – would be regressive.”
According to figures from the IFS, councils have generated 30 per cent more from council tax in real terms since 2010.
This has been carried out to address the funding cap from the cuts to grant funding, which have been about 40 per cent, since the Conservative Party came into office.
Hikes to council tax are capped at 4.99 per cent annually, unless a local referendum approves of a higher amount.
Despite this being option, only one referendum has ever been held in Bedfordshire, in 2025, but a majority of residents voted against the measure.
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Taxpayers are struggling with the unsustainable burden of council taxPAIf the levy was to be raised by this levy, this would be higher than the current rate of inflation which is sitting at four per cent.
Speaking to The Guardian, a Government spokesperson said: “Councils are responsible for their own finances and set council tax levels but we have been clear they should be mindful of cost of living pressures.
“We continue to protect taxpayers from excessive council tax increases through referendum principles.”
A DLUHC spokesperson told GB News “We have recently announced an additional £600million support package for councils across England, increasing their overall proposed funding for next year to £64.7billion - a 7.5 per cent increase in cash terms.
“Councils are responsible for their own finances and set council tax levels, but we have been clear they should be mindful of cost-of living pressures. We continue to protect taxpayers from excessive council tax increases through referendum principles.”