Magazine article Public Finance

LGA Plea for Tax Benefit Reform

Magazine article Public Finance

LGA Plea for Tax Benefit Reform

Article excerpt

One third of households could have their bills reduced if the council tax benefit system was reformed, the Local Government Association has said.

One in three households is entitled to council tax reductions but many are unaware of this. A study commissioned by the LGA from the New Policy Institute highlighted failings in the present system which mean that many people are unable to claim as much as they could.

For example, people who claim Working Tax Credit almost always lose council tax benefit, and people start to lose out on council tax reductions even before they start paying income tax.

Sir Jeremy Beecham, vice-chair of the LGA, said: "The system has been failing society's most vulnerable for too long. Root and branch reform is sorely needed.

'An eye-watering £1.8bn goes unclaimed every year. Part of the problem with take-up is the benefit is wrongly seen as something only for the very poor... Council tax benefit should be seen as a tax allowance, not a handout'

The report, published on September 21, called for the level of income at which people start to miss out on council tax savings to be reduced, and for people with greater savings to be able to claim reductions. …

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