Why council tax bills just don't add up
Here's some welcome news you may not have been expecting. Your council tax bill is more likely to fall than it is to rise in April 2007, when the government completes its re-banding of every property in England. Research from Halifax Bank shows more homes will move down a council tax band in two years' time than up.
The bank is assuming the government will raise the value of each band by 186 per cent, the amount by which house prices have increased since council tax replaced the poll tax in 1991. Since more local authorities in England have recorded house price inflation below the average figure than above, the re-banding process should produce more winners than losers.
Don't start spending your savings just yet. The government won't announce how it will calculate the re-bandings until early next year. But Halifax's research suggests homeowners in the North-west and the West Midlands, where house price inflation has been lower, are more likely to move into a lower tax band. Homes in the North-east and the South-west are more likely to move up. This research once again exposes the fundamental flaw that makes council tax so unfair. The disposable incomes of people in the North-east have not risen at a faster rate than those of their friends in the North-west over the past 15 years. Yet they face tax increases, while bills will fall elsewhere.
The trouble with council tax is your bill is not in any way based on your ability to pay. If you live in a property that has done particularly well from house price inflation, you'll lose out, whether you're a City slicker or a cash-strapped single mum. Unless you're prepared to sell up and move to a smaller home - the only way to realise your house price gains - you'll have to find extra cash.
Some groups are particularly hard hit. The incomes of pensioners, for example, rise in line with prices each year, rather than earnings which tend to increase more quickly. So they find council tax increases tough to cope with.
It's not surprising that council tax is a mess when you remember that John Major introduced the current system in a rush to replace the tremendously unpopular poll tax so closely associated with the demise of Margaret Thatcher. But it is bizarre that a decade-and-a-half later, and despite a change in government, we're stuck with the same unsatisfactory system.
The local income tax system proposed by the Liberal Democrats at the last election has so far failed to capture widespread support. There is some evidence that such a system would lead to higher tax bills for sizeable numbers of people. But that's no reason to reject it out of hand - at least bills would be based on ability to pay them.
Icstis, the watchdog that polices the premium-rate telephone market, must raise its game if it is to prevent people being caught out by expensive mobile phone charges.
The regulator is receiving an increasing number of complaints about the Crazy Frog ringtones. Jamster, the company that sells the ringtones, is a respectable business, rather than a rogue operator, but many parents say their children have not understood what downloads will eventually cost them.
In theory, the Crazy Frog services are for over-16s only - Jamster's website makes that clear. Yet the cartoon character used to market the ringtones is popular with children and has proved to be a useful recruiting tool.
Icstis is set to give its verdict on the Crazy Frog complaints next month. But we also need much clearer - and stronger - rules on how companies in this sector should operate.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Simon Read: Frozen in time - the expat British pensioners who deserve a better deal
Weekly Money: Round-up of the personal finance stories you may have missed 19-23 January
Bargain Hunter: From The Outsider to 1984, catch a cut-price classic, read it in the rye
Donald MacInnes: My wasted hours in the retail deserts of Dixons-Carphone
Money Insider: Smart alternatives to the pensioner bond
- 1 Rowan Atkinson to sell £10 million McLaren 'supercar' he crashed into a tree and a lamppost
- 2 The truth about 'girl things': Three cheers for Heather Watson's honesty
- 3 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 4 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 5 Men behaving badly: Urinating while standing, 'manspreading' and the gendering of selfishness
British Muslim leaders outraged after Eric Pickles says followers of Islam should 'prove their identity'
UK terror fears: My jihadist son returned from Syria mentally scarred – now he is being ignored
Nigel Farage: NHS might have to be replaced by private health insurance
Billy Crystal: 'Stop shoving gay sex scenes in my face'
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...
Day In a Page
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village