60307983 - working office communication people using computer taxation conceptYou don’t have to be an American moving to London to be obligated to pay council taxes.  If you’re moving to London from Canada, or moving to London from Australia it’s the same, all London inhabitants pay council tax…you know what they say, death and taxes…it’s impossible to avoid either.  So we’ll stay with the example of an American moving to London.  So you’re investigating what costs there are associated with living in London.  One from outside the country is likely not accustomed to everyone living in an area being obligated for taxes; in most countries that are reserved for property owners, not so in London.  So let’s start with what council taxes are charged for.

Why we Pay Council Tax

Even an American moving to London can appreciate the concept of what they would call “property taxes” pays for.  According to the City of London, they’ve three aims to use the taxes for:

  • To support and promote The City as the world leader in international finance and business services.
  • To provide modern, efficient and high-quality local services, including policing within The City for the workers, residents, and visitors.
  • To provide valued services, such as education, employment, culture and leisure, to London and to the nation.

When we stop to think about it all that is important and we naturally, as citizens, take these services for granted with little thought as to how they get paid for, or by whom.  But there are other things that The City is obligated to regulate, pay for and operate.  Once you are a Londoner you will realize some of the national importance of some of the things London has to do with culture.  For instance, the only place that pay directly their council tax to the City of London is those living in the Square Mile.  Some of the cultural organizations are the Barbican Center and the Guildhall School of Music and Drama, both of which fall under London’s umbrella of responsibility and obligation.  Additional costs to cover?  3  wholesale food markets, the Old Bailey, housing the national Central Criminal Court, and 11,000 acres of open space outside The City limits.  But here is the list of what London has on its tax agenda:

59393152_lCity police, Barbican Centre, Dept. of Built Environment, Dept. of Community and Children’s Services, Dept. of Culture, Heritage and Liberties, City Surveyor’s Dept. Dept. of Markets and Consumer Protection, Chamberlain’s Dept., Open Spaces Dept.  Town Clerk’s Dept. …to the tune of £344.5 million pounds.

 

What’s the American have to pay?

14472343 - a large bundle of british twenty pound notes in the handSo returning to our American moving to London, how does he know what all that is going to cost him?  Well if we went really slow on explaining what council tax is, buckle up, we are breezing through the calculation explanation. In order to determine the tax rate of the apartments in London, you first have to know what band the London apartments in.  “Bands” are the system of assignment by The City as to what their appropriations cost residents.  Bands are classified from A to H and each carries a different tax calculation.  So if the American moving to London settles in the very unlikely square mile, he would be in Band D and this year’s tax rate is £931.20.  To give you an idea how the scale works is Band A is £620.80 and Band H is £1,862.40.  So are going to be told by your London Relocation Agent, which Band your prospective London apartment is located and if this council tax has already been accounted for in the rent, which isn’t likely.41236520 - piggybank with eyeglasses and calculator on wooden table

 

When does he Have to Pay?

47206717-tower-bridge-historical-landmark-in-london-ukSo our American moving to London is now aware of the “what” and “cold cash amount” now comes “when you have to pay up!” Council Taxes are due April 1 each year.  What may be some more bad news for our American friend is that it’s likely he can get a pro-rata council tax bill after he moves into the London apartment.  Otherwise, he will have a tax bill due April 1, 2017.  But he is far from the only one, so who exactly gets the tax bill specifically?  It’s determined like this: anyone who lives at the property in the following list who is over 18 and lives at the property as their only, or their main home:

  • A freehold owner
  • A leashold owner
  • A statutory tenant or a secure tenant (that’s our American living in London)
  • An occupier under a license
  • Anyone else over 18 living at the property

In a word; everybody.  Everybody pays council tax for the home they live in.  But some good news for our Yankee, by the “Local Government Finance Act of 1992” he can make monthly payments.  So figure about £50-£150 a month; just think about it as part of cultural cool cost that comes with living in London. Besides, being at the center of everything, from leading world finance, to the arts, the history, the lifestyle and the significance of style of London, the biggest City in the world!