Here we include more information on the precept as collected annually by the Parish Council to fund its operations for the benefit of the village:
Council Tax Base & Parish Precepts
Q1. What is the Council Tax Base?
The Council Tax Base is effectively the number of properties in a particular area that are liable to pay Council Tax.
Q2. When is the Council Tax Base determined?
The Local Government Finance Act 1992 requires every billing authority to calculate its Council Tax Base in accordance with the Local Authorities (Calculation of Tax Base) (England) Regulations 2012 and must do so at some point between 1st December and 31st January leading up to the next financial year.
Q3. Why is it expressed as Band D equivalents?
The legislation referred to above dictates that the Tax Base must be expressed as Band D equivalents, as a single measure of the number of properties liable to pay Council Tax.
Q4. How is it calculated?
All properties are valued by the Valuation Office Agency (an Executive Agency of Her Majesty’s Revenue and Customs) in to 1 of 8 Bands, A to H. The number of properties in each Band after taking account of discounts, exemptions, and the Local Council Tax Support Scheme in a particular area are converted to Band D equivalents using the following proportions:
Band Proportion of Band D
Band A therefore is equivalent to 6/9ths of a Band D and, at the other end of the scale, Band H is equivalent to 18/9ths or more simply 2 Band D’s.
Q5. What factors influence the movements from one year to the next?
As referred to in the previous question, not all properties are liable to pay the full amount of Council Tax as they may be entitled to a discount, exemption, or help through the Local Council Tax Support Scheme. Changes in discounts, exemptions & Local Council Tax Support, as well as new build properties and demolitions, all affect the level of the Council Tax Base.
Q6. Can the Council Tax Base change even if no new houses have been built in the Parish?
Yes – the Council Tax Base could change as a result of changes in discounts, exemptions & Local Council Tax Support.
Q7. Why is the Council Tax Base important when setting the Parish Precept?
The Council Tax Base is important as, in effect, it will be the number of properties the Parish Precept is levied against.
Q8. How is the precept reflected on Council Tax Bills?
The Parish Precept will be divided by the number of Band D equivalents in the Council Tax Base and then applied to Council Tax Bills in the proportions previously referred to. Both the old and new precept figures applicable to the relevant Band will be reflected on the face of Council Tax bills with a percentage increase from one year to the next rounded to 1 decimal place.
Q9. Will requesting the same total precept as last year show as a zero increase on Council Tax Bills?
It could do, but the chances are that the Council Tax Base will not be the same figure as the previous year for the reasons referred to previously and in such a scenario a percentage increase or decrease would be reflected.
Parish Tax Base for year 1 = 1,000 Band D equivalents
Parish Council wishes to raise £100,000 total Precept
The cost to Band D taxpayer is £100,000/1,000 = £100
Parish Tax Base for year 2 = 1,020 Band D equivalents
Parish Council wishes to raise £100,000 total Precept – no change to year 1
The cost to Band D taxpayer is £100,000/1,020 = £98.04
In the above examples the Parish Council receives the same level of total Precept in years 1 and 2 but because the Council Tax Base has increased between years the Band D taxpayer is levied with a smaller sum and a reduction of 1.96% is shown on the Council Tax bill.
If the Council Tax Base were to have reduced from year 1 to year 2, this would have shown as an increase for each taxpayer as a smaller number of tax payers are being levied with the same total precept.
Q10. If the Council Tax Base has increased could the Parish Council receive an increase in its total precept without increasing the levy on individual Council Tax bills?
Yes it could do. In the above example the Band D taxpayers in year 2 could be levied with £100, the same as year 1 which would be reflected as a zero increase on Council Tax bills, but the total Parish Precept could be set at £102,000 which is 1,020 Band D equivalents all paying £100.
Q11. What factors should be considered when setting the total Parish Precept?
The Parish Council will need to consider what funding is required to pay for the provision of services it is proposing to undertake in the forthcoming year. It will also need to consider the number of Council Tax payers (Council Tax Base) that the precept will be levied against. A combination of these 2 factors will determine the impact upon individual Council Tax bills.
Q12. What help is available to understand the implications of our precept on Council Tax Bills?
When the Council contacts Parish Councils with their Council Tax Base information, they will provide a modelling tool (electronically via email) to allow Parish Councils to assess how different total precept levels will impact upon individual Council Tax bills.
The modelling tool will be supplied to Parish Council as an Excel spreadsheet. For those unfamiliar with Excel or who don’t have access to the software the Council will endeavour to help Parish Councils assess the impact of proposed precepts. The Council will provide an email and telephone contact to address any queries to and will aim to respond to queries within 1 working day where ever possible.
Q13. Is there a limit as to the annual increase in a precept?
Local Authorities have for a number of years been restricted to a 2% increase in Council Tax levels for Band D equivalent dwellings before which a referendum would be required to agree anything higher.
No such restriction applies to Parish Councils although the Government has stated in past Local Government Financial Settlement Consultations that it would keep this under review and take action if necessary. The consultation for the 2018-19 settlement can be found via the following link – (note that Pg16, Q.10 Para 4.2.1. specifically refers):
The focus of the consultation is on Parish Councils exercising restraint when setting precepts. Any revised proposals will be included in the Provisional Local Government Financial Settlement due later in the year.
Q14. What is the timescale for supplying precept information to the Council?
Parish Councils wishing to raise a precept must by law notify the Council no later than the 28th February. We would ask Parish Councils to work with the Council as they have done in the past to provide details of the precept by no later than Friday 9th February 2018, which allows sufficient time for the Council to acknowledge receipt, confirm precept information and build in to the Statutory Resolution of Council Tax which will be approved at the Council Budget Meeting on 28th February 2018.
Q15. What information is required in support of the precept?
Parish / Town Councils are required to complete the formal Precept demand form, which quantifies the precept required & will contain an authorising signature, and a Budget pro forma statement. The latter provides an estimate of expenditure & income which should balance back to the precept requested, and will also require an authorised signature.
Q16. What information is published with regards to the precept?
The Council is required to publish details of any Parish / Town Council’s budget, where their Precept Demands are £140,000 or over. We would use the information requested per the question above, & if any clarification, or re-formatting, were to be required, we would then go back to the Parish / Town Council to confirm that the amended version was still acceptable to them. Currently, the Council tax leaflet is actually produced electronically, & is available to read or download on the Council’s website. It is no longer posted out alongside the Council Tax bills.
Q17. What are the arrangements for paying the precept to parish Councils?
Precept demands of £10,000 and under are payable in one instalment on the 15th April, or the nearest working day. Precepts over £10,000 are payable in two instalments on the 15th April & the 15th September, or nearest working days. The Council will action these transactions electronically utilising the current bank account details that we hold, in order for the payments to be processed swiftly on the designated day(s).
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