Welsh Government consultation on A Fairer Council Tax
CIOT and LITRG have submitted a joint response to the Welsh Government’s consultation on substantial reforms to council tax in Wales. This is the first phase of consultation with the second phase being issued in Summer 2023. The consultation proposes a council tax revaluation of all 1.5 million properties in Wales and more frequent valuations in the future. It also considers including additional council tax bands and potential improvements to the framework of discounts, disregarded persons, exemptions and premiums, and improvements to the Council Tax Reduction Scheme.
LITRG agrees that a tax system that does not reflect current property values and treats (or appears to treat) taxpayers unequally risks being undermined. In the longer-term this could place Wales’s tax revenues at risk if people are less willing to pay taxes they consider unfair, and hamper wider policy initiatives.
LITRG considers that revaluation and reform will focus public attention on council tax and transitional measures to ease the effect of the transition and phasing in reform will help to gain public support and acceptance. However, the approach to transition needs to take account of the complexity of taxpayers’ lives in low-income households in order to achieve equity in the system and maintain public support.
LITRG noted that the existing system of discounts, disregarded persons, exemptions and premiums is very complex. This makes it difficult for people to understand and therefore access relevant support. We consider this a good opportunity to relook at the whole council tax system so that people who are entitled to pay lower council tax do not have to subsequently claim support.
Our joint response can be seen here