Resolution Foundation report says failure to reform has ‘slowly recreated the issues that undid the poll tax’
Britain’s poorest households are paying an increasing share of their income on council tax, according to new analysis that likened it to the poll tax that contributed to the downfall of Margaret Thatcher.
The poorest fifth of households paid 4.8% of their income on council tax in England, Wales and Scotland and on domestic rates in Northern Ireland in the 2020-21 financial year, up from 2.9% in 2002-3, according to research by the Resolution Foundation.
Council taxes are one of the few levies on wealth in the UK, with different systems applied in each of the four countries.
However, they are seen by economists as deeply flawed, not least because the tax in England and Scotland is levied based on the value of properties in 1991, despite huge changes in the spread of wealth over the past three decades. Wales has updated its system to use 2003 valuations, while Scotland raised the rates on higher-banded properties in 2017. Northern Ireland still has a system of domestic rates, which predates council tax.
Highlighting the “regressive” nature of the tax, meaning poorer households pay more of their income towards it than richer ones, the Resolution Foundation said the failure to reform council tax had made it progressively worse.
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Article continues at https://www.theguardian.com/business/2025/feb/17/uk-poorest-households-income-share-council-tax-resolution-foundation