Toms Tips 3: Eliminate Council Tax for Renters

Boost income for 10 million households

9 June 2024. Imagine if all of you who rent your home, that’s 36% of households, which is 10 million households, no longer paid council tax! In 2024-25 the Office of Budget Responsibility  estimated that council tax will raise £46.9 billion (net of any discounts and reduction schemes). That represents 4.1 per cent of total  tax receipts and is equivalent to around £1,620 per household and 1.7 per cent of National Income.

Renters are generally but no always lower income groups who are already hard pressed, why make it worse! With no council tax to pay would mean a saving out of income that would be an average of £1620 per year and boost disposable income for 25m people based on average household size of 2.5 people including children.

The average household income is £35,000, so this benefit represents a 6% pay rise. This shortfall of tax revenue would equate to £17billion. This could be made up by switching the focus of council tax onto the landowners and still raise more funds. Or another political option, this £17billion could be made up by increasing council tax on homeowners, who effectively would still pay no council tax! In the next post we will look the implications and how it can be fairly administered