Almost 140k Leicestershire residents could have to pay more tax under Government rule change

People living alone in the city and county could be hit by a tax hike amid speculation over a possible Government rule change. Currently, single-person households get a 25 per cent discount on the amount of council tax they pay.

Angela Rayner, deputy prime minister, said the Labour Government currently has no plans to scrap the discount, but refused to rule it out. This has sparked fears that millions of people across the county could see their bills skyrocket, the Reach Data Unit reports.

In Leicester and Leicestershire, 138,561 people are currently eligible for the lower rate – just shy of a third of the local population. The city has the highest number of residents who would be impacted if the rule change is instigated at 40,964.

READ MORE: Fields in part of Leicestershire could take thousands of new homes says Government

This equates to around 31 per cent of all local households. Cash-strapped Leicester City Council voted in February to increase tax for its residents by the highest possible amount – up to 3 per cent in general taxation plus two per cent for social care.

The local authority has been warning for months it might not have the funds to balance its books for the next financial year – something it is legally bound to do. If it cannot bridge the gap between its income and outgoings, the council will have to file a Section 114 notice, essentially declaring itself bankrupt. This could pave the way for even higher council tax rises next financial year.

In the county, residents pay council tax twice – once to their district or borough council and also to the county council. Leicestershire County Council also faces a challenging financial situation, though its leadership has previously sworn “hell would freeze over” before they filed for bankruptcy.

The county council also approved putting its share of the bill up by the full five per cent in February. The district and borough authorities are able to increase their portion of council tax by up to 3 per cent. This financial year saw North West Leicestershire District Council vote for an increase for the first time in 15 years as its cost pressures were “so significant”.

Of the county areas, Charnwood has the most residents who would be impacted by the scrapping of the discount at 22,887 (30 per cent). Hinckley and Bosworth Borough and Melton District however have the highest percentage of people within their boundaries who would be charged more – 33 per cent. They have 16,974 and 7,975 single-person households respectively.

In North West Leicestershire, 15,082 people would be affected (32 per cent). Some 13,704 households in Blaby District would see their taxes hiked, with Harborough District coming in slightly behind at 13,321. This would be around 31 per cent in both areas. Oadby and Wigston Borough would collect more tax from 7,654 people (32 per cent).