A package of reforms to council tax in Wales is set to “address unfairness in the current system”.
That’s the intent of the Welsh government’s minister for finance and local government Rebecca Evans, who noted that the reforms were not designed to generate any more revenue overall than is raised currently.
Local taxes brought in more than £3bn in revenue in Wales last year.
The government’s proposed reforms include more progressive bands reflecting the latest data, regular revaluations, and a review of arrangements for discounts and reductions to “ensure people are supported in the most effective way”.
The changes are set to be delivered from April 2025, according to Evans, who said more detail about what the new system will look like will be confirmed towards the end of this year.
Speaking in the Senedd, the Welsh parliament, Evans stated: “Just as we see the excellent work of local government, day in, day out, we also know that wealth inequality persists across our communities. Our taxes need to move with the times, or we risk them becoming outdated and unfair.
“Council tax is still regressive in the way it is designed, it places a higher burden on households with lower wealth. Even now, it is twenty years out of date.
“With every year that we continue under the current arrangements comes more unfairness, carried by some of the poorest in society. The evidence and experts agree this is one of the most beneficial actions we can take to reduce wealth inequalities, that will be felt in the pockets of those most in need by the end of this government term.”
15th Annual LATIF & FDs’ Summit – 19 September 2023
250+ Delegates from Local Government & Investment
Evans told the Senedd she had commissioned the Valuation Office Agency to undertake revaluation work, “using the latest technology to assess property values”. She said: “I will use this information to build a new system of bands from the bottom up, as we work towards a more progressive tax. I will bring forward legislation in due course to set regular revaluation updates on a statutory footing.
“I will deliver a fairer council tax in April 2025 and, later this year, I will set out how the new system will look. I recognise that these are complex changes, and there will be winners and losers. Every year that we continue with the current arrangements brings more unfairness, often experienced most acutely by the poorest households. The evidence and the experts agree that reforming council tax is one of the most beneficial actions we can take to reduce wealth inequalities, and the benefits will be felt in the pockets of those who are most in need by the end of this government term. As we develop our proposals and modelling, I will consider whether transitional arrangements may be necessary.
“We have also made progress on a longer-term ambition, examining the potential for a local land value tax to replace both council tax and non-domestic rates, with a view to publishing more information on our work by the end of this term.”
—————
FREE weekly newsletters
Subscribe to Room151 Newsletters
Follow us on LinkedIn
Follow us here
Monthly Online Treasury Briefing
Sign up here with a .gov.uk email address
Room151 Webinars
Visit the Room151 channel
