On 3 February, the chancellor announced that some households in England will get £150 towards their council tax bill in April to help with the cost of living crisis.
However, not everyone will get the payment. Here’s everything you need to know about the new scheme.
What is the new £150 council tax discount?
On Thursday 3 February, the government announced it would help households with the cost of living crisis in the form of a £150 one-off payment towards their council tax.
The payment applies to homes in England and is expected to benefit up to 20 million households. It is not yet known what help will be available to those living in Scotland, Wales or Northern Ireland. However, it’s expected that the devolved governments of these nations will soon make an announcement.
Why is the government introducing a £150 council tax payment?
The government says it is introducing a £150 council tax payment to help households tackle the cost of living crisis.
It is, of course, no coincidence that the government announced the new £150 council tax payment on the same day that Ofgem reviewed its energy price cap. Ofgem’s new cap means that almost £700 is likely to be added to average annual energy bills from April.
Aside from increased energy costs, National Insurance will also rise from April. As well as this, the UK’s high inflation rate is putting pressure on households budgets. That’s because the prices of everyday goods are rising at a rate that hasn’t been seen in over 30 years.
There has been much speculation in recent weeks as to how the government would help households with rising bills. One big rumour was that the government would cut VAT on energy bills, which is currently charged at 5%.
However, according to the Resolution Foundation, the £150 payment is a better scheme, describing it as a more ‘progressive policy.’ The Think Tank says cutting VAT on energy bills would have benefited those living in larger homes more than those living in smaller properties.
Who qualifies for the £150 council tax payment?
The £150 council tax payment only applies to households in England in council tax bands A-D. You can check your council tax band on the gov.uk website.
If you live in a property that isn’t in council tax bands A-D, you won’t get the payment. Worryingly, the Resolution Foundation suggests that 12% of the poorest households will fall foul of this rule.
If you are struggling with bills, and your home isn’t in council tax bands A-D, it’s worth speaking to your local authority to see if they can help.
How do you apply for the £150 payment?
If you qualify for the £150 council tax payment, then you don’t need to apply. That’s because the payment will be automatically applied to your council bill from April.
This applies whether you pay your council tax by direct debit or using a debit or credit card. It also doesn’t make a difference whether you pay council tax annually or monthly.
Are you interested in cutting your council tax bill right now? Whether or not you qualify for the new payment, see our article that explains how you can reduce your council tax.
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About the author
Karl is a writer specialising in investing and personal finance content. He regularly contributes articles on savings, bank accounts, mortgages, and loans. He was previously a Personal Finance Writer for MoneySavingExpert.
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