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Council tax

  • 2 min read

Council tax is a tax that you pay to your local council so they can fund services in your community. This can be anything from waste disposal to recycling to mental health services to planning permission etc. 

What you pay depends on where you live and the valuation band of your property. The tax band system was introduced in 1991, and the bands are as follows:

Council tax band Property value
A Up to £40,000
B £40,001 to £52,000
C £52,001 to £68,000
D £68,001 to £88,000
E £88,001 to £120,000
F £120,001 to £160,000
G £160,001 to £320,000
H More than £320,000

How does council tax work?

Every property in the UK is put into a council tax band. This band is based on size, location, and the property’s value in 1991. The tax is then set as a fixed amount for each band. A few things can affect your bill amount:

  • You demolish part of your property
  • You convert flats into a single property, or vice versa
  • There are big changes in your local area
  • You stop/start working from home
  • Similar properties in your area have their band changed

Read more about changes that affect your council tax bill.

What if I’m self-employed?

If you’re self-employed and working from home, you can claim a proportion of your council tax. What you claim should be based on the number of rooms you use for your self-employment business, and how much time you work from home.

How to claim council tax if you’re self-employed

Take a look at the below example of how to claim back your council tax when you’re self-employed:

  • You have 3 rooms in your flat, and you use one of them for work (e.g. it’s your study)
  • In this case, you are allowed to claim up to 1/3 of your council tax against your annual Self Assessment tax bill
  • If you work from home for more than 25 hours each month, you might want to use HMRC’s simplified expenses system instead (also called the “Home Office Allowance”)
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