How your council tax is calculated and how it is spent

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What is council tax?

Council Tax is a local tax that helps to pay for a wide range of public services in your borough.

Each household receives a bill and the amount each household pays depends on which property valuation band the home is in and any discounts or exemptions that apply.

There are 8 valuation bands which relate to the value of the property on 1 April 1991, with the value of new properties being assessed back to this date.

In addition to Merton's Council Tax, the Council also collect an amount of Council Tax on behalf of the GLA, and households within three quarters of a mile of Wimbledon Common are required to pay an additional levy for Wimbledon and Putney Commons Conservation.

Council tax charges and bands

The amount of council tax you pay depends on which of the eight bands your home comes under.

We use band D charge as the basis for working out the charge for the other bands. For example, the charge for a band D property for 2019/2020 is £1,548.33.

To work out the cost of a band A property in the main part of the borough it's £1,548.33 x 6/9.

Band

Property value (on 1 April 1991)

Proportion of band D charge

Council tax charge (Main part of borough)

AUp to £40 0006/9£1032.22
B£40,001–£52,0007/9£1,204.26
C£52,001–£68,0008/9£1,376.30
D£68,001–£88,0009/9£1,548.33
E£88,001–£120,00011/9£1,892.40
F£120,001–£160,00013/9£2,236.48
G£160,001–£320,00015/9£2,580.55
H£320,001 upwards18/9£3,096.66

If you live within the area of Wimbledon and Putney Common you pay an extra £29.90 (Band D) to cover the expenses of the Commons Conservators. Including this charge, the Band D charge is £1,578.23.

You may not have to pay the full council tax charge as you may be entitled to a discount or an exemption.

What council tax helps pay for

Council tax helps pays for the local services we provide. With the introduction of the Adult Social Care Levy there are four main elements to the charge:

  • spending on local services, such as education, waste collection, green spaces, and care services including levies, which the Council is required by statute to pay to  the Environment Agency, the London Pension Fund Authority, and Lee Valley Regional Park.
  • Spending on adult social care which is ring-fenced and funded by the Adult Social Care precept
  • the GLA charge for the services they provide, such as police and fire services which is collected by the Council and passed to the GLA
  • If you live within the area of Wimbledon and Putney Common you pay an extra £29.90 (Band D) to cover the expenses of the Commons Conservators.
Merton's Band D Council tax

2018/19

£

2019/20

£

Change

£

Change

%

Merton general precept1,124.951,159.98
Merton Adult Social Care precept44.41    67.81 

Merton Band D excluding WPCC

1169.361,227.8258.46*5.0 
GLA precept294.23320.5126.288.9 

Merton Band D including GLA excluding WPCC

1,463.59 1,548.3384.745.8 
WPCC29.3029.900.602.0 

Merton Band D including WPCC & GLA

1,492.891578,2385.345.7 

Of the 5% increase in Council Tax, 3% (£35.03) is for Merton's general precept and 2% (£23.43) is for the Adult Social Care Precept.

 

 

 

 

 

 

 

 

 

 

Average Council Tax

The Government require the Council to express its Council Tax as an average. Merton's  average 2019/20 Band D council tax is £1,232.39.

For example, across the Council's area most properties pay the general Council tax but some properties also pay the Wimbledon and Putney Commons Conservators levy. The total council tax raised for Merton's services across the borough is then converted to an average although no properties pay the average, they either pay the Merton Council Tax (Band D = £1,227.82) or the Merton + WPCC Council Tax (Band D = £1,257.72)

The 2019/20 average council tax (Band D) including the GLA precept is £1,552.90.

Adult Social Care Precept

Local authorities with responsibility for social care, such as Merton,  may levy a precept to spend exclusively on adult social care. This precept equates to up to 6% over 3 years, from 2017-18 to 2019-20, with a maximum increase of 3% in the first 2 years and 2% in the final year. Merton has levied 3% in 2017/18, 1% in 2018/19 and 2% in 2019/20.

The adult social care percentage increase is calculated using the full Merton council tax charge, including the adult social care figure, and not just calculated as a percentage of the adult social care amount.  

In 2018/19 the average Council Tax (Band D) was £1,173.83 and in 2019/20 the average Council Tax (Band D) is £1,232.39 which is an increase of £58.56 or 5%.

The actual increase is slightly under 5% to avoid going over the overall 5% specific limit that the Government set to trigger the need for a referendum.

Of the 5% increase, 2% applied to Adult Social Care. Splitting the overall council tax increase between Merton General (3%) and Merton ASC (2%) this gave an increase of £35.13 Merton General and £23.43 Merton ASC

The level of charge set for each Band is then derived from these Band D values set for the year based on the following ratios.

Band A 6/9

Band B 7/9

Band C 8/9

Band D 9/9

Band E 11/9

Band F 13/9

Band G 15/9

Band H 18/9

For example, if your property is band F your adult social care figure increase is 13/9 of £23.43 which is £33.84. This will give a total adult social care charge of £97.98 for you. (2% increase).

Our main income sources

Our main sources of income are:

  • fees and charges – charges that we make for services that we provide
  • business rates – these rates, called National Non-Domestic Rates, are the means by which local businesses contribute to the cost of providing local authority services. In 2019/20 Merton is participating in a London Pool to pilot 75% Business Rates Retention. Under the pool we keep 48% of our income from business rates, 27% goes to the GLA with 25% to central Government.
  • revenue support grant – a Government grant which can be used to finance revenue expenditure on any service. Under the Pilot Pool Merton will not receive any Revenue Support Grant as this is being replaced by Business Rates.
  • Other Government Grants – grants from Government which are usually allocated to fund specific services.
  • collection fund  – this is any surplus or deficit from previous year's council tax and business rates.
  • council tax requirement –this is an estimate of the income we'll raise from council tax this year.
  • budget requirement –this is an estimate of what we will spend this year after deducting income raised from services we charge for, government grants and any funding from reserves.

How is Council Tax calculated?

  1. we plan our services for the coming year and work out how much they will cost to provide
  2. we deduct any income that we expect to receive during the year from fees and charges,  government grants and other contributions, and a share of business rates (48%)
  3. the resulting balance is the amount we need to fund from Council Tax. The Council Tax is calculated by dividing this figure between all properties in the borough, taking into account the different Council Tax property bands

Main income sources in 2018/19 and amount raised per head

Funding sources

£000s

%

£/head*

Business rates44,02633209.18
Revenue support grant000
Collection fund(1,301)(1)(6.18)
Council tax requirement92,37168483.89
Budget requirement135,096100641.89

* based on estimated population of 210,465 in 2019 (source: ONS)

 

 

 

 

 

 

 

 

 

Medium Term Financial Strategy (MTFS)

You can view our financial plans for the next four years in our Medium Term Financial Strategy.

The services we deliver

This table shows the amount we plan to spend on council services in 2019 to 2020 compared to last year (excluding schools which are funded by a Dedicated Schools Grant).

The income we have to spend on services has gone down over the last two years as the funds we receive from government have been cut. To deal with this, we’ve had to find ways to deliver our services more efficiently with less money.

2018/19

  

2019/20

Gross expenditure £000's Income £000's Net expenditure £000's   Gross expenditure £000's Income £000's Net expenditure £000's
142,296(132,801)9,495Corporate Services146,812(135,882)10,930
251,568(195,423)56,145Children, Schools, and Families234,566(173,746)60,820
56,710(38,760)17,950Environment and Regeneration63,098(47,267)15,831
101,084(37,329)63,755Community and Housing101,089(37,334)63,755
9380938Levies9500950
9,462(21,354)(11,892)Investments and Provisions20,360(33,364)(13,004)
562,058(425,667)136,391 Planned Expenditure566,875(427,593)139,282
0(1,342)(1,342)Contribution to/(from) Reserves0(4,186)(4,186)
562,058(427,009) 135,050 Net requirement for tax purposes 566,875 (431,779) 135,096
10,102(10,102)0Memorandum   
142,296​(132,801)9,495​

Public Health

10,396​(10,396)​0​

Public health funding is provided by the NHS and is not part of our services. We have included it to show that it is money we are responsible for although it has no effect on the level of council tax set.

Planned spending for 2019 to 2020

This chart shows the figures in a pie chart from the 2019 to 2020 income and expenditure table.

 

Changes in our revenue spend from 2018-19 to 2019-20

Our spending has gone up from £135.050m in 2018-19 to £135.096m in 2019-20. We've made savings of £6.835m on council services.

£m

Revenue spending 2018/19 135.050
Savings in service provision(6.835)
Growth in Service Provision2.506
Pay and price increases (net)4.316
Other adjustments, concessionary fares, income etc.4.966
Capital financing2.048
Appropriations to/(from) reserves(1.943)
Budget requirement 2018/19135,096

Levies

These are the bodies we pay levies to. These are set by the bodies and we do not have a choice in paying these.

 

2018/19
£

2019/20
£

Lee Valley Regional Park179,239178,109
Environment Agency: Flood defences164,339170.601
London Pensions Fund Authority259,469257.530
Wimbledon and Putney Commons Conservators331,349342,822
Total levies938,287949,062

Borrowing

We estimate our long-term borrowing to fund capital programme projects which help improve the borough's economic well-being, to be £113m as of 31 March 2019.

It is expected that this will remain at £113m at 31 March 2020.

The interest charges arising on this amount are financed from the council's resources.

Staff

We estimate the number of staff we will employ (calculated on a full-time basis) in 2019/2020  to be 1,816. This compares with a total of 1,731 in 2018/2019.

Greater London Authority services

This guide explains how your council tax pays for Greater London Authority (GLA) services:

Your Council Tax and the Greater London Authority (2019-20)

Empty Homes Premium

From 1 April 2019 – 100% premium for properties that have been empty for 2 years or more (this means your council tax will be twice as much as the normal charge).

Reductions, appeals and support

If you think there has been a mistake calculating your bill, or that your home is in the wrong valuation band, please see Council Tax Appeals.

You might be entitled to a reduced bill depending on who lives in the property: see Council Tax Discounts and Reductions.

Some types of property are exempt from council tax: see Council Tax Exemptions.

If you are on a low income you may be entitled to Council Tax Support.

See also

Contact us

Local Taxation Section
London Borough of Merton
PO Box No 559
Morden
SM4 5ZY

Phone:
               Account or billing enquiries: 020 8274 4904
               Summons enquiries: 020 8274 4905 or 8545 3468
Fax:020 8545 3960
Email:local.taxation@merton.gov.uk

We are no longer able to attend to personal visitors at the Civic Centre. You can email us anytime or telephone between 9am and 5pm.