Council tax bills will rise by £75 a year 'across almost all of the UK'

Households face council tax hikes of up to £75 a year on average following measures introduced in Jeremy Hunt’s Autumn Budget.

Next year, local authorities will be allowed to raise bills by up to 5% without holding a referendum, up from the current ceiling of 3%.

The chancellor said use of this ‘additional flexibility’ will be based on ‘need, resources and priorities of their area, including adult social care’.

But the independent public finance watchdog expects virtually all councils to take full advantage of the rule change.

Council tax bills will rise by continue rising by 5% a year over the next five years, according to the latest forecasts from the Office for Budget Responsibility (OBR).

Treasury officials have not sought to contradict the warnings.

The estimates suggest households paying the UK-wide average annual council tax bill of £1,493 would see their total liabilities for the following year rise by £75 in April.

A typical home in band D would have to pay £98 per year more, bringing average bills in that bracket over £2,000 in many areas.

The rise in actual amounts paid may be larger for some people due to the £150 council tax rebate for homes in bands A to D handed out this year as part of the government’s cost-of-living support package.

The Autumn Statement saw Mr Hunt unveil a raft of tax rises and spending cuts aimed at safeguarding public finances from a drawn-out recession.

They include freezes on the threshold at which workers start paying income tax and move up tax brackets, as well as an extension on the current freeze on the main national insurance (NI) threshold.

Raising council tax is expected bring in an additional £4.8 billion a year by 2027-28.

This figure is equivalent to nearly a quarter of total spending on adult social care services – one of the main areas of council spending.

But with headline inflation currently at 11.1%, this increase alone will not be enough for local authorities to cope with rising costs in the near term.

Other measures have been introduced to help maintains pending, such as the Health and Social Care Levy which is expected to raise £5.4 billion over the next three years.

After the NI changes, the rise in council tax will be the second-largest hike to workers’ tax obligations, the OBR said.

It added that workers and businesses will now be paying more tax relative to the overall size of the economy than at any time since the Second World War.

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