Find out how your Council Tax is calculated and how it is spent.
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.
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 2021/22 is £1,704.38.
To work out the cost of a band A property in the main part of the borough it's £1,704.38 x 6/9.
|A||Up to £40,000||6/9||£1,136.25|
If you live within the area of Wimbledon and Putney Common you pay an extra £31.00 (Band D) to cover the expenses of the Commons Conservators. Including this charge, the Band D charge is £1,735.38.
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 £31.00 (Band D) to cover the expenses of the Commons Conservators.
|Merton General Precept||1,184.52||1,210.02|| || |
|Merton Adult Social Care Precept||92.40||130.70|| || |
|Merton Band D exc. WPCC||
|Merton Band D inc. GLA exc. WPCC||
|Merton Band D inc. WPCC & GLA||
* Of the 5% increase in Council Tax, 2% (£25.50) is for Merton's general precept and 3% (£38.30) 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 2021/22 Band D council tax is £1,345.48. i.e. 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 = £1,340.72) or the Merton + WPCC Council Tax (Band D = £1,371.72).
The 2021/22 average council tax (Band D) including the GLA precept is £1,709.14.
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. For 2021/22, without triggering the need for a local referendum, councils such as Merton are able to increase their council tax level by 5% (comprising 3% for expenditure on adult social care, and 2% for other expenditure). The 2021/22 Adult Social Care precept (Band D) has been set at £38.30 (3%) – The Adult Social Care increase is calculated using the full Merton council tax charge for the previous year and not just the charge for Adult Social Care.
Our main income sources
Our main sources of income are:
fees and charges – charges that we make for services that we provide
these rates, called National Non-Domestic Rates, are the means
by which local businesses contribute to the cost of providing local authority services. In 2021/22 Merton is no longer participating in a London Pool due to uncertainties on business rates income across London boroughs, arising from the pandemic. Under the Business Rates Retention scheme in 2021/22, we keep 30% of our income from business rates, 37% goes to the GLA with the remaining 33% being paid to central Government.
revenue support grant
a Government grant which can be used to finance revenue
expenditure on any service. Under the 2021/22 arrangements Merton will receive Revenue Support Grant of £5.187m.
Other Government Grants –
grants from Government which are usually allocated to
fund specific services.
– this is any surplus or deficit from previous year's council tax and
business rates. In 2020/21, due to the pandemic leading to significant deficits on Collection Funds, local authorities are able to spread exceptional balances over the following three financial years 2021/22 to 2023/24
council tax requirement –this is an estimate of the income we'll raise from council tax this year.
–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?
- we plan our services for the coming year and work out how much they will cost to provide
- 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 (30%)
- 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 2021/22 and amount raised per head.
|Covid-19 RNF & LCTS Grant||6.811||5%||£0.03|
|Revenue Support Grant||5.187||3%||£0.02|
|Council tax requirement||99.861||68%||£0.47|
* based on estimated population of 211,787 in 2020 (source: GLA)
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 2021 to 2022 compared to last year (excluding schools which are funded by a Dedicated Schools Grant).
*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.
|Gross expenditure||Income||Net expenditure|| ||Gross expenditure||Income||Net expenditure|
|236,956||(174,959)||61,997||Children, Schools, and Families||246,096||(182,971)||63,125|
|66,370||(52,346)||14,024||Environment and Regeneration||68,543||(54,187)||14,356|
|106,615||(37,959)||68,656||Community and Housing||107,532||(38,130)||69,402|
|38,304||(41,396)||(3,092)||Investments and Provisions||37,454||(41,528)||(4,074)|
|0||(11,275)||(11,275)||Contribution to/(from) Reserves||0||(8,652)||(8,652)|
|569,925||(428,377)||141,548||Net requirement for tax purposes||584,270||(437,290)||146,980|
| || || ||Memorandum:|| || || |
Planned spending for 2021 to 2022
This chart shows the figures in a pie chart from the 2021 to 2022 income and expenditure table.
Changes in our revenue spend from 2020-21 to 2021-22
Our spending has gone up from £1141.548m in 2020-21 to £146.980m in 2021-22. We've made savings of £5.899m on council services.
|Revenue Spending 2020/21||141,548|
|Savings in Service Provision||(5,899)|
|Growth in Service provision||3,882|
|Pay and Price increases (Net)||3,122|
|Change in Provision for DSG Deficit||(1,931)|
|Bad debt provision||1,000|
|Impact of Covid-19 on income||4,276|
|New Homes Bonus||826|
|Covid-19:Sales, Fees and Charges Compensation||(2,643)|
|Appropriations to/(from) reserves||3,047|
|Budget Requirement 2021/22||146,980|
These are the bodies we pay levies to. These are set by the bodies and we do not have a choice in paying these.
|Lee Valley Regional Park||177,859||178,658|
|Environment Agency: Flood Defences||173,789||174,334|
|London Pensions Fund Authority||257,027||253,457|
|Wimbledon and Putney Commons Conservators||352,856||352,802|
We estimate our long-term borrowing to fund capital programme projects which help improve the borough's economic well-being, to be £111m as of 31 March 2021.
It is expected that this will reduce to £109m at 31 March 2022.
The interest charges arising on this amount are financed from the council's resources.
We estimate the number of staff we will employ (calculated on a full-time basis) in 2021/22 to be 1,890. This compares with a total of 1,867 in 2020/21.
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 (2020-21)