GBP1.8b Worth Of Council Tax Goes Unclaimed Annually

by Jason Gorringe, Tax-News.com, London

24 September 2007

Around six million people in England and Wales are set to benefit from a major council tax reform, which is aimed at correcting flaws in the way the British tax system works.

According to the Local Government Association (LGA), as many as one in three households are eligible for reductions in council tax - but many are simply unaware of their entitlements, meaning that an astonishing GBP1.8b worth of council tax goes unclaimed every year.

Sir Jeremy Beecham, Vice-Chair of the Local Government Association argued that: "The system has been failing society's most vulnerable for too long. Root and branch reform is sorely needed."

He continued:"An eye-watering GBP1.8bn goes unclaimed every year. Part of the problem with take-up is that benefit is wrongly seen as something only for the very poor. Around one in three households are eligible and many are simply unaware that they can get help with their council tax bills."

According to Mr. Beecham, the system is in need of a major overhaul which concentrates on making it easier for those who qualify for help to get it.

A study recently conducted by the New Policy Institute, at the behest of the LGA, suggested raising the level of income and savings which people can have before forfeiting council tax reductions.

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