10. 2026 01 27 The Future of Council Tax in Scotland - Consultation Response V2
North Ayrshire Council · 27 January 2026
Back to Cabinet — 27 January 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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NORTH AYRSHIRE COUNCIL 27 January 2026 Cabinet Title: The Future of Council Tax in Scotland – Consultation Response Purpose: The purpose of this report is to seek approval on the North Ayrshire Council response to the Scottish Government’s consultation on the future of Council Tax in Scotland. Recommendation: Cabinet is asked to: (1) Review the proposed consultation response contained in appendix 1 of the report; and 2) Authorise officers to submit the consultation response to the Scottish Government by the 30 January 2026 deadline. 1. Executive Summary 1.1 The consultation was published on the Scottish Government website on the 27th of October 2025, and it closes on 30th January 2026. 1.2 The consultation is a result of a joint ministerial working group between Scottish Government and COSLA, with professional input from local government Directors of Finance, the Institute of Revenues, Rating and Valuation (IRRV) and Scottish Government officers. 1.3 The consultation seeks views on considerations around how to make the Council Tax system fairer and arguably less regressive in nature. The link to the full consultation and supporting documents is included in the attached link: - Future of council tax in Scotland: consultation - gov.scot The main purpose of the consultation is to seek views on whether a general re-valuation is required in Scotland to bring Council Tax banding values up to date as the current banding is based on values as at 1st of April 1991. There are also considerations around what the main principles around any change should be as well as the number of new bands and if there should be a case for transitional reliefs and possibly deferral of any charges and consequential changes to the Council Tax Reduction (CTR) scheme.
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1.4 The proposed response from North Ayrshire council is included in appendix 1 for Cabinet consideration. The response is aligned to the taxation principles of fairness, equity and being progressive in nature. 1.5 It is also recognised that the policy intent from the Scottish Government is that any new council tax scheme should be cost neutral. In terms of timescale, it is not expected that any reforms will be implemented soon, and unlikely to be before April 2030. 2. Background 2.1 The consultation was published on the Scottish Government website on the 27th of October 2025, and it closes on 30th January 2026. 2.2 The consultation is a result of a joint ministerial working group between Scottish Government and COSLA, with professional input from local government Directors of Finance, the Institute of Revenues, Rating and Valuation (IRRV) and Scottish Government officers. 2.3 The intention from the Scottish Government is that any new scheme would be cost neutral in overall terms and not simply be a means of generating more Council tax revenue in Scotland. 2.4 North Ayrshire Council generated over £66million Council tax revenue in 2024/25 across 70,256 dwellings. This is a vital source of revenue to the Council. The band profile of dwellings is outlined in the undernoted table along with the current levels of council tax charges across each Band. The North Ayrshire profile reflects 68% of total dwellings (47,939) i.e. more than two thirds are across Bands A to C. It is recognised that there are also variations in band profile across both Island communities. Council Tax Bands Number of Dwellings 2024/25 Annual Council Tax Charge 2025/26 A 21,493 £1,035.84 B 18,705 £1,208.48 C 7,741 £1,381.12 D 7,417 £1,553.77 E 9,268 £2,041.48 F 4,295 £2,524.87 G 1,279 £3,042.79 H 58 £3,806.73 Total 70,256 2.5 The current Council tax Bands are based on historic 1991 property valuations. There is a recognition that the current scheme is both outdated and, from a taxation principle, arguably regressive in nature.
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2.6 The consultation seeks views across several areas, including but not limited to, • Whether property values should be reviewed and updated • New Bands to be set nationally or locally and the number of bands • Whether there should be a gradual differentiation approach to bands or whether there should be more emphasis on higher value homes contributing more • Whether there should be transitional relief arrangements or deferrals, and, • Whether the Council Tax Reduction (CTR) scheme should also be reviewed 2.7 The proposed consultation response is included in appendix 1 of the report. The key points from the proposed response can be summarised as follows: • Property values should be updated to reflect current market values and updated every 5 years to reflect ongoing shifts in valuations in a proportionate manner. • Any new Bands should be set nationally to ensure consistency of application, avoid complexity and avoid multiple variations of bands. • From the principles of fairness, equity and arguably a more progressive approach to taxation, that that those higher value homes and households contribute more. • General support for the application of a transitional relief scheme that smooths the impact of any band increases over years, however, no support for a deferral scheme as it is recognised that protection is already available from the Council tax reduction (CTR) scheme. • Support to also review the CTR scheme to consider any potential gaps, threshold changes. There could potentially be a consideration that more council tax revenue is generated / billed, however, CTR also proportionately increases also to provide appropriate income-based household protections. This could still result in any new scheme being cost neutral. 3. Proposals 3.1 Cabinet is asked to: (1) Review the proposed consultation response contained in appendix 1 of the report; and 2) Authorise officers to submit the consultation response to the Scottish Government by the 30 January 2026 deadline. The response will be submitted in draft, subject to confirmation of Cabinet approval following the expiry of the call-in period.
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4. Implications/Socio-economic Duty Financial 4.1 None Human Resources 4.2 Potential resource implications have been highlighted in the response. Legal 4.3 Any new Council tax scheme would require to be supported with new legislation. Equality/Socio-economic 4.4 All equality impact assessments would require to be undertaken by the Scottish Government and considered in advance of any new scheme being implemented. Climate Change and Carbon 4.5 None. Key Priorities 4.6 Council tax is a vital source of revenue to maintain a sustainable council and fund council services. Community Wealth Building 4.7 None. This would be a national scheme. Islands Communities Impact Assessment (ICIA) 4.8 Requirement for Island Communities impact Assessments to be considered and undertaken by the Scottish Government in advance of any new scheme being implemented. United Nations Rights of the Child (UNCRC) 4.9 None. Consumer Duty 4.10 None. 5. Consultation 5.1 This is a Scottish Government consultation that has invited responses from both citizens and organisations.
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Mark Boyd Head of Service (Finance) For further information please contact Mark Boyd, Head of service (Finance), on 01294 324560. Background Papers 0
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Appendix 1 Consultation: The Future of Council Tax in Scotland Respondent Information Form Please Note this form must be completed and returned with your response. To find out how we handle your personal data, please see our privacy policy - Privacy - gov.scot Are you responding as an individual or an organisation? Individual Organisation Full name or organisation’s name Phone number Address Postcode Email Address The Scottish Government would like your permission to publish your consultation response. Please indicate your publishing preference: Publish response with name Publish response only (without name) Do not publish response We will share your response internally with other Scottish Government policy teams who may be addressing the issues you discuss. They may wish to contact you again in the future, but we require your permission to do so. Are you content for Scottish Government to contact you again in relation to this consultation exercise? Yes North Ayrshire Council 01294 324560 KA12 8EE Cunninghame House Friar’s Croft Irvine markboyd@north-ayrshire.gov.uk Information for organisations: The option 'Publish response only (without name)’ is available for individual respondents only. If this option is selected, the organisation name will still be published. If you choose the option 'Do not publish response', your organisation name may still be listed as having responded to the consultation in, for example, the analysis report.
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No About You Questions 1. About you Question 1 [For individual respondents] Please tell us which local authority area(s) you live in Local Authority Area(s): [For organisational respondents] Please tell us which local authority area(s) your organisation operates in Local Authority Area(s): North Ayrshire 2. About you Question 2 If you pay council tax, please indicate which council tax band(s) apply to the property (or properties) for which you pay council tax: Band A Band B Band C Band D Band E Band F Band G Band H I don’t pay council tax I don’t know
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Questions for Consultation 1. Do you think the current council tax system in Scotland needs to be reformed? ☒ Yes ☐ No ☐ Don’t know 2. Do you think property values used to calculate council tax should be updated to reflect current market values, instead of using 1991 values (i.e. should there be a revaluation of every Property in Scotland)? ☒ Yes ☐ No ☐ Don’t know 3. How often do you think property values should be reviewed and updated for council tax purposes? ☐ Every 3 years ☒ Every 5 years ☐ Every 7 years ☐ Every 10 years ☐ Other, please specify [50 words maximum] ☐ Don’t Know This would be proportionate to reflect shifts in property valuations and keep up to date. This would maintain relevance and avoid the situation we have been in for the last 30 years. This would require to be supported by additional funding to Valuation Boards (Assessors) to meet additional workload demands that arise from this. 4. Following a revaluation, do you think council tax band property value thresholds should be set at a national level or vary by council area? ☒ Thresholds should be set nationally to be the same across all council areas ☐ Thresholds should vary by council area based on local housing markets ☐ Don’t know From the perspective of consistency of application across the country. Locally set thresholds could lead to multiple variations in bands across Scotland. Enabling 32 variations of different thresholds will be administratively complex and may increase frequency of appeals. 5. Which of the following is most important to you in the design of council tax bands?
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☐ Ensuring tax rises between bands are gradual and predictable (differentiation) ☒ Ensuring households in higher-value homes contribute more (progressivity) ☐ Don’t know ☐ Other, please specify [50 words maximum] From the principles of fairness, equity and arguably a more progressive approach to taxation, that that those higher value homes and households contribute more. 6. Which of the potential council tax systems do you most support? ☐ Revaluation with 8 existing bands ☐ Revalued 12-band (differentiated) system ☒ Revalued 12-band (progressive) system ☐ Revalued 14-band system ☐ The current council tax system ☐ Don’t know Proportionate range that allows progression and also considers administration impact and potential levels of Band appeals. 7. Which of the potential council tax systems do you least support? ☐ Revaluation with 8 existing bands ☐ Revalued 12-band (differentiated) system ☐ Revalued 12-band (progressive) system ☐ Revalued 14-band system ☒ The current council tax system ☐ Don’t know 8. Do you support the establishment of a transitional relief scheme to limit how much a household’s council tax bill can increase each year following reform? ☒ Yes ☐ No ☐ Don’t know There should be support for households who see a large increase in their council tax bill as a result of the reform. This would be an appropriate approach. 9. Which transitional relief scheme would you prefer? ☐ Scheme 1: Cap increases at 10% or £300 per year ☐ Scheme 2: Cap increases at 25% or £600 per year
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☒ Other, please specify [50 words maximum] ☐ Don’t know Rather than selecting an arbitrary % cap or value to be applied, the Transitional Relief Scheme could be applied in a manner that limits any increases to 1 band per annum from the current council tax charge (and associated Band) incrementally to the new Band. If banding decreases this could be implemented immediately. This would require a full impact analysis, especially within the context of any new scheme being cost neutral. Therefore, this would likely require to be revisited, however, the principles behind this approach apply. 10. Do you support the establishment of a council tax deferral scheme for homeowners? ☐ Yes ☒ No ☐ Don’t know On balance there should be sufficient protection for through the Council Tax Reduction scheme or through any transitional relief that could be applied. 11. In your view, who should be eligible to receive support from a council tax deferral scheme? [Select as many as you think should apply] ☐ Pensioners (over state pension age) ☐ Disabled people ☐ Households with children ☐ Households experiencing financial hardship ☒ Other, please specify [50 words maximum] ☐ Don’t know As stated in Q10, protections already exist, however, If a deferral scheme was introduced, it should be limited. It is also important to consider how and who would administer such a scheme as there could again be significant cost implications for local authorities, depending on the level of complexity for any scheme. 12. Should households who defer payment pay interest on the amount deferred? ☐ Yes ☒ No ☐ Don’t know 13. Do you think the Council Tax Reduction scheme should be expanded to support more households following any reform?
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☒ Yes ☐ No ☐ Don’t know It would be appropriate to review the CTR scheme as part of any Reform. The main rationale to consider any potential gaps in available support that could be addressed. 14. Which changes to the Council Tax Reduction scheme would you support? [Select as many as you think should apply] ☐ Broaden eligibility criteria for CTRS to include low-income households where the property moves into a higher band due to council tax system changes ☐ Change CTR so support is withdrawn more gradually as rising incomes move individuals out of eligibility ☐ No changes needed ☒ Other, please specify [50 words maximum] ☐ Don’t know The current level of savings / capital limit of £16,000 could potentially be increased to increase the eligibility for CTR. The taper rate which is currently 20% which has the effect of reducing the level of CTR support could also potentially be reduced. This would facilitate more CTR support based on household income levels. In short these are adjustments / threshold changes that could be applied to the current CTR scheme, rather than the creation of new policies within the scheme. It is important that any impact on funding to local authorities is assessed and addressed accordingly. 15. Do you have any information you wish to share that has not already been discussed in the paper on the impact of council tax reform on any of the following: - Groups who share protected characteristics - Island Communities - Businesses or organisations in the public, private or third sector - Your local area Please provide details, making reference to the type of impact to which your comments relate. [free text, 300 words maximum] North Ayrshire has two island communities on Arran and the Isle of Cumbrae. Each of the islands have unique features and have a markedly different current Council tax banding profile. It is therefore important that Islands Communities Impact Assessments are undertaken as part of any future policy considerations. 16. Please provide any other comments or views on the consultation themes or council tax reform that you have not been able to share above. [free text, 300 words maximum]
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North Ayrshire Council supports modernising Council Tax through a general revaluation approach which reflects current property values (and not those from 1991) and that the scheme is aligned to the principle of fairness and that any new scheme is a more progressive approach to taxation. The Council does not favour a deferral scheme as this simply adds further complexity and Council’s would most likely be faced with an additional administrative burden. The Council supports a national banding system which adds bands, potentially at both the bottom and the top end on a progressive basis, any localisation of banding would again introduce further complexity and create potentially significant variations across the country. The application of water charges would also have to be considered within any new proposed banding structure. The Council supports a review of the current Council Tax Reduction scheme to run in parallel with the Council tax review. This aligns to the principles of fairness and a progressive approach. If the objective is that any new Council tax scheme is to be cost neutral, then there is a consideration that an increase in the overall Council tax base could be achieved through the revaluation and associated Banding, which could be supported with an increased level of Council tax reduction eligibility and support.