Council tax to rise for millions from 1 April with most facing 5% hikes – here's what's happening

While the increases are unlikely to come as a surprise given council tax bills typically rise each year, the latest increases come at a time when the cost of living crisis is continuing to eat into people's budgets. If you're struggling, see our Cost of living help guide.

What's happening to council tax bills from 1 April

For the past few years, council tax rises have effectively been a given for most people living in England, Scotland and Wales (Northern Ireland uses a different system known as 'rates'). Typically the question has not been whether council tax would increase, but by how much.

While council tax rises take effect from 1 April, it's during the early part of the calendar year that local authorities tend to consult on how much to increase their rates by. Here's what we know so far: 

• In England, local authorities are restricted to increasing council tax by a maximum of 5% this year. According to the County Councils Network, which represents England's largest councils, around 75% of these 'top-tiered' councils (which means they have social care responsibilities) have confirmed in their 2023/24 budget proposals plans to hike council tax by 5%.

  For example, in the 2022/23 tax year, council tax on a typical band D property in England cost in the region of £1,966 a year, so a 5% rise will be equivalent to around £98 – meaning a typical band D annual bill will rise to £2,064.

  Where a local authority wants to hike council tax by more than the 5% cap, a referendum would be required. But three councils – Croydon, Slough, and Thurrock – have all been granted special permission from the Government to hike their council tax by more than this because of huge gaps in their finances. Croydon is planning a 15% increase, while both Slough and Thurrock intend to increase rates by 10%.

• In Scotland, there is no cap on council tax increases this year. The Scottish Government announced last year that it would not freeze or cap how much local authorities could increase council tax by in 2023/24 (the cap was 3% in 2022/3). It said local authorities would have "full flexibility to set the council tax rate that is appropriate" for the area. We've asked for average increases and will update this story when we know more. 

• In Wales, there have never been caps on council tax rises. The Welsh Government will only step in where a proposed council tax increase is deemed "excessive". This year,some local authorities in Wales are considering increases to council tax of above 5%, and in some cases, nearer to 10%.

Not all councils have set their rates yet. Final decisions are expected to be published over the coming weeks.

How council tax bill hikes are calculated

Council tax bills are complex and are typically made up of various different elements. Plus, exactly how much you'll pay also depends on your council tax band, which is based on your property's value.

In England, any increase to your bill can be made up of some or all of the following elements in 2023/24 – though how much you'll pay in total depends on which elements apply to you: 

• Your local council element – though this can be split into two parts. The maximum this can rise by is 3% or £5 (whichever is higher) with this funding going towards council services.

  - If you live in a 'single-tier authority', where one council looks after all your services, there will be one fee to pay.

  - For those in 'two-tier authorities', where two councils cover services, there are two fees – one set by your county council, and another set by your district, borough or city council. How much of your bill goes towards each council varies by authority, but county councils tend to take the largest share. 

• A charge for adult social care. 

  The maximum this can rise by this year is 2%. This charge is usually included alongside your council rate, meaning a combined total increase for many of 5%. 

• An additional, separate 'mayoral' charge for those in London and Manchester. In Manchester, the mayoral charge will be increasing by 4.8%. In London, while the figures have not yet been confirmed, mayor Sadiq Khan has indicated he plans to increase his mayoral charge. These rates cover the cost of services such as policing and fire safety. 

   

• Other associated costs. The maximum increase for this is set by the local council. This covers fees to police and crime commissions, fire and rescue services and any town/parish councils. 

In Scotland and Wales, your 2023/24 bill is split into a number of elements:

• Your local council element. In both Scotland and Wales, there is no maximum amount that council tax can increases by. This hike will also include any funding towards adult social care, which isn't usually detailed separately as it is in England.

• Other associated costs. This includes any charges for parish/town councils. 

How to save on council tax bills 

Make sure you're not missing out on support to help pay your council tax bills: 

• Check if you're eligible for a 

  council tax discount

  .

  Many people are eligible for discounts or reductions of between 25% to 100% off their council tax bill, potentially saving £100s – or even £1,000s – each year. This could be based on your circumstances, your household's circumstances, or your property's circumstances. For example, you live alone, or your property is empty. However, it's up to YOU to flag to your local council whether you might be eligible for a discount. 

• Check and challenge your council tax band

   if you think yours is wrong. 

  Many homes are in the wrong council tax band, and have been since 1991. However, challenging your band is not something to do speculatively without the checks though, for one simple reason - you can't just ask for your band to be lowered – only for a reassessment, which means it could be moved up or down.