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Like it or not, our taxes go up every single year. Normally, there’s a nationwide cap on how much councils can raise their taxes, but every so often authorities are given an exception. And this week, the government has given permission to five London local authorities to raise council tax by more than anywhere else in the UK over the next two years.
Kensington and Chelsea, Westminster, Wandsworth, City of London and Hammersmith and Fulham will all be allowed to increase their rates by more than the normal five percent cap in 2026 and 2027.
These five areas have been given special permission as they’re currently the councils with the lowest tax rates in the city (Band D households currently pay £450 and £1,280 less than the average in England) and will all face cuts in funding next year, with the government shifting more focus onto deprived areas.
Alison McGovern, local government and homelessness minister, told the Commons this week that the exemption for these areas will ‘improve fairness’.
She said: ‘It will enable the government to allocate more than £250m of funding in the system more fairly, instead of subsidising bills for the half a million households in those council areas.
‘It will also provide greater flexibility for those authorities in deciding how to manage their finances following our reforms. The councils will decide on the level of council tax increase to set and whether to draw on the relatively high alternative sources of income from which a number of them benefit.’
We don’t know yet exactly what percentage each borough will decide to increase their taxes by, but the Institute for Fiscal Studies has predicted that Wandsworth and Westminster would have to increase its council tax by as much as 75 percent in order to make up for the cuts.
Just outside of London, Windsor and Maidenhead has also been granted the power to hike its taxes more than five percent.
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