Council Tax, making the poor poorer

Sylvie Rouhani Deputy Editor, Taxpayers Against Poverty 1 July 2025

TAP's founder, the late Rev Paul Nicolson, a constant campaigner against Council Tax

On the 9th of June 2025, TAP launched the campaign to Cancel Council Tax for Renters. This tax is outdated and pushes many into debt. Failure to pay brings severe and unfair repercussions for the most vulnerable. This campaign is part of TAP’s anti-poverty manifesto, The Real Agenda.

What is Council Tax?

Council Tax is a tax based on property value. It was first introduced, by the former Conservative Prime Minister, John Major, in 1993, by the Local Government Finance Act 1992, replacing the Poll Tax.  Each property is assigned a band (A to H), the higher the band, the higher the tax. Some individuals and some properties are exempts to the tax; others can get a reduction. Council Tax is collected by local authorities, called “collecting authorities”.

The problems

Since the localisation of council tax from central government to local authorities and, the abolishment of the Council Tax Benefit, in 2013, the tax has increased greatly. Under pressure, local authorities’ council tax schemes – replacing the Council Tax Benefit, have been less generous and has made whatever financial support available out of reach to many.

In the London Borough of Lewisham, for instance, Residents could apply for and receive council tax benefit if they were too ill to work or/and unemployed, now for disabled people to be eligible for a reduction, or exemption, they need to have installed aids – such as a ramp. For those suffering with mental illnesses, only “severely mentally impaired”, those suffering with psychosis for instance, are eligible. These changes make it more difficult for anyone else to, who is financially struggling, to apply.

Fundings to local authorities are decreased greatly, for the last 10 years. The way for them to balance their budget is to increase Council Tax, putting financial pressure on the most vulnerable and the poorest local residents. “Councils have weathered central government budget cuts of 40% over the last 10 years.” The Council Tax Collection Coalition (A group of organisations seeking to improve Council Tax collection practices for both residents and councils and to highlight the urgent need for reform) writes in a letter to the Housing, Communities and Local Government Committee. writes. “Council tax is an increasingly vital component of the local government funding system, accounting for 60% of councils’ core spending power 2021/22, up from 40% in 2009/10.3.”

Furthermore, individuals failing to pay their monthly council tax bill, for lack of financial means, are then asked to pay the full yearly amount. If this is impossible, which it often is, tenants are fined £1000, on top of their exciting debts, increasing their debt further, without the offer of support. The last stage is a summons to court. If the court decides the person is still liable to pay their bill, might result in bailiffs knocking at their door and/ or a sentence of up to 3 months in jail.

The Impact on the most vulnerable tenants

John* moved into a new build housing association 2 bedroom flat. When he contacted the Council Tax office, they had no record of this new building. John was asked to send them plans of the property and other proof of residency. After a year, one day, the council tax office withdrew £800 from his bank account without any notice. When he spoke to an officer, he was told they took the amount they thought was appropriate for his property. “I was never in debt with my bank before. I was in overdraft for the first time in my life. Since, I have been struggling to pay my council tax bills. I have been indebting for years now, as they keep fining me. I live in fear of bailiffs and summons.”  

A letter from the Council Tax Collection Coalition to The Rt Hon David Gauke, Chair of the Independent Sentencing Review. states: “The threat of imprisonment is often overemphasised, and the perceived risk of this alone is enough to cause long-lasting, damaging consequences – for those who fall behind, and their loved ones. Single parents, most often women, describe immense stress and pressure stemming from this threat as the only adult in their household, fearing what would happen to their children should this become their reality. One debt advice client – a single mother in her 50s – said the fact this could be done made her “very anxious and scared” and meant her children “both suffered from anxiety and got upset when anybody came to the door.”

TAP proposes cancelling council tax for all renters, who tend to be lower income groups

 “The campaign outlines how the £17 billion shortfall in council tax revenue from removing renters could be offset by:

·       Shifting the burden to landowners and homeowners, who benefit most from rising property values (the cost of an average home goes up in value more than the cost of the average council tax),

·       Or recalibrating council tax bands to reflect modern property values and ownership status, not outdated 1991 valuations.”

It is clear: a tax based on property value, and not on what people can afford, with a collection system pushing renters into further debt and poverty; punishing them with fines, harassment from bailiffs and with the threats of imprisonment needs to be abolished. Uk renters deserve to live free of fears of repercussions to lead more fulfilling lives.

* Name changed for anonymity

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Our Role in Creating Change

We cannot wait for someone else to act. It’s time to demand better for the millions struggling in poverty—and for the millions more living one unexpected expense away from it.

·       Join us in advocating for a compassionate, fairer society. Here’s how you can help:

·       Speak Up: Contact your MP and demand investment in social care, living wages, and affordable housing.

·       Get Involved: Volunteer or donate to organisations like TAP that fight for systemic change.

·       Stay Informed: Follow TAP’s work and share their message to build awareness.

Together, we can create a society where no one is left behind. Let’s make compassion the cornerstone of our nation’s future.

Sylvie Rouhani Deputy Editor, Taxpayers Against Poverty

July 2025