Thursday, 7 October 2010

Mr Bridgen really is showing his ignorance about Council Tax

Have you seen this weeks Coalville Times?

Our local MP is quoted in a page 8 article expressing his views about the cancellation of a council tax revaluation.

In short he has 'responded enthusiastically to the government's announcement to cancel Labour's plans for a revaluation in England, which would have led to local tax hikes'.

Mr Bridgen, I am afraid, is completely mistaken in his views about the effects of a revaluation. What's more those views in all likelihood are working to the detriment of people living around North West Leicestershire.

I have worked in council tax since it was first introduced in 1993 and I would venture to say I probably could be classified as having expert views in this area having run the council tax department in two highly performing district councils.

Up until the general election we regularly read in the right wing media that Labour was demonstrating astonishing stealth and guile in their plans to increase tax income through a revaluation of council tax bands.

It seems that even after the election Mr Bridgen is continuing with this rhetoric.

Let me be clear about this.

REVALUATION DOES NOT INCREASE THE AMOUNT OF MONEY A LOCAL AUTHORITY RECEIVES.

What revaluation does do is to redistribute the overall tax burden based on more relevant property values.

In very simple terms a home, based on its tax band, is attributed a weighting. The council, which has already set its budget, then arrives at a council tax by dividing that budget by the cumulative total of all of the weightings thus arriving at a different charge for each band.

When a revaluation takes place the council still has to set a budget first and divide by cumulative weightings it is specifically prohibited from increasing its budget just because the total cumulation of weightings has increased.

So, in real terms what should this mean?

In some ways we don't really know as there has never been a revaluation of council tax in England. Mr Bridgen's assertion that 'in Wales four times as many homes moved up one or more bands as down' is a little misleading as the number of council tax bands was increased at the Welsh revaluation in order to allow valuers to be slightly more accurate when determining property values.

The theory of a revaluation however has been long established and that theory is quite simple. Roughly one third of people would see their tax (not their tax band) increase. One third would see their level of tax stay the same and one third would see a reduction in how much they have to pay.

Now, here is the real kicker!

Tax bands at the moment are completely unfair. Your house is valued at what it would have been worth in 1991 and doesn't take into account any improving modifications since (as long as the house hasn't changed hands).

So when we bought our house we were allocated band E (don't worry it's all public record) but since then we have had a fairly big conservatory ubilt which hopefully has increased the value of the house fairly substantially. But the great bit is we could carry on building until we had a mansion and our tax wouldn't ever go up. Is that really fair?

You can absolutely guarantee the same has happened with a neighbour of yours, or even you yourself. Bandings just do not reflect in any way the current real value of homes BECAUSE THEY ARE 18 YEARS OUT OF DATE!

....and that's not even the worst part.

We don't know what would be the effects of a council tax valuation but we do know how business properties have been revalued as they DO have revaluations every 5 years.

IN THE 2010 BUSINESS RATES REVALUATION THE BUSINESSES THAT SAW THE BIGGEST REDUCTIONS IN VALUE ACCROSS THE ENTIRE COUNTRY WERE THOSE IN THE EAST MIDLANDS BECAUSE OUR AREA HAS SEEN THE LARGEST REDUCTIONS IN PROPERTY VALUES COMPARED TO THE REST OF ENGLAND!

IT IS ENTIRELY POSSIBLE THAT THAT WOULD BE THE SAME FOR COUNCIL TAX!

So, in reality in agreeing with no revaluation what Mr Bridgen is doing is potentially keeping our taxes higher than they would be if a revaluation took place just to benefit those living in affluent areas in the South East of the country.

It's hardly representing the people of North West Leicestershire is it?

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