Martin Lewis ‘pleased to say' as he issues update on council tax discount

Martin Lewis has reacted to news that changes to council tax which would have seen bills skyrocket will not go ahead. It had been reported that the Labour Government were planning to scrap the council tax discount which affects single people and single parent families.

However, on Sunday, the Treasury confirmed in a report to the Daily Telegraph that the Budget will not contain measures to scrap the tax break, which is claimed by millions of households including four million pensioners. The discount reduces bills by 25 per cent for taxpayers who are the sole person over the age of 18 in their property, regardless of their financial circumstances.

It can save a person in an average home around £500 a year on their council tax bill. As a result, scrapping the discount would add hundreds of pounds to a household's tax bill at a time when many people are struggling financially.

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Responding to a question in the House of Commons on Monday, September 2, the Secretary of State for Housing, Communities and Local Government Angela Raynor said Labour has no plans to scrap the 25% council tax discount for single people, but refused to rule out scrapping the exemption for people who are the only adult living in their home.

In a post on X/Twitter earlier this month, Martin said scrapping the discount would be costly to single people and raise further questions about council tax. How much council tax you pay is determined based on property valuations made in 1991, and there have been calls to review these.

Martin said: “Reports out that the government hasn't ruled out ending the 25% single person council tax discount. Clearly this would be a painful hit for single adults and single parent families, but also:

“What about the similar reduction for Severe Medical Impairments? Someone with an SMI doesn't count for council tax purposes, so if as is common they live with another adult, there's a 25% reduction equivalent to the single person reduction. Surely they're not going to end the reduction for these vulnerable people too?

“Substantial council tax changes shouldn't be done without a rebanding. Up to 400,000 homes are in the wrong band because we still rely in England and Scotland on a stop-gap temporary valuation done in 1991 to dictate what bands people are in. If such a big change comes, surely there should be even more emphasis on ensuring that people are in the right band and not overpaying.”

On Sunday, the Treasury confirmed in a report to the Daily Telegraph that the Budget will not contain measures to scrap the tax break, which is claimed by millions of households including four million pensioners.

Yesterday, Martin expressed his support for the decision. He said: “Pleased to say it seems this is NOT happening. Telegraph reporting Treasury has now ruled out getting rid of the council tax single person discount (having previously not ruled it out when asked) in the coming budget.”

Data has shown more than eight million people would see their council tax bills soar if Labour were to scrap the single person's discount. According to the government's Council Taxbase 2023 statistics for England, the withdrawal of the single person discount would impact millions of people across the country who would see their council tax bills skyrocket.

A total of 8.39 million dwellings in England received the discount in 2023, according to the latest figures from the Department for Levelling Up, Housing and Communities. The data shows just over a third (34%) of all households in the country would be affected with some parts of the country more impacted than others - particularly in the North.

Across the local authority boroughs in Merseyside, the number of people receiving the council tax exemption is no less than 38% in Knowsley, 39% in Sefton and Wirral and 42% in Liverpool. It means over one in three people would be impacted financially by any potential changes to the single person's discount.

In total, the number of households who would be affected in Merseyside is a staggering 227,499 people. Approximately, 75,000 people in Knowsley and Sefton would see their council tax bills soar if Labour were to scrap the single person’s discount.

A total of 26,148 dwellings in Knowsley and 49,547 in Sefton received the discount in 2023, according to the latest figures from the Department for Levelling Up, Housing and Communities. That works out at almost four out of every 10 (39%) of all households in the area.

The Labour Party Conference continues at the Exhibition Centre in Liverpool today. Prime Minister Sir Keir Starmer will address Labour members and reveal how the Hillsborough Law will be implemented.