Parish Council Funding – the Precept
The Precept is a tax, included within the local Council Tax, which enables the Parish Council to perform its functions.
Parish Councils can apply for other funding such as grants and funding awards, generally for specific projects, but they do not receive funds directly from central Government.
How is the Precept calculated?
The Parish Council is required (in law) to agree a budget before it can set its Precept and both must be agreed by the full Parish Council.
Once the Parish Council has forecast its budget requirements for the following financial year, it requests this funding from its ‘local billing authority’ – in our case, Cherwell District Council (CDC) – in the form of the Precept.
CDC then converts the Precept into an amount per Council Tax payer that is added to the Council Tax bill (according to the property band) for all the dwellings within the Parish area.
A Precept Calculator is published on the Parish Council website in the papers for the January meeting each year so that the Council is able to make an informed decision on various scenarios.
The Tax Base
The Tax Base is produced from the Council Tax system at CDC which gives a listing of all the properties in each town or parish in the District. It then adjusts this to take into account any discounts that are given, for example, single occupancy, second homes or homes that are empty or exempt.
The properties are then translated in to Band D equivalents using the following ratios:
Band A 6/9
Band B 7/9
Band C 8/9
Band D 9/9 (base line)
Band E 11/9
Band F 13/9
Band G 15/9
Band H 18/9
For example Band A is six-ninths of Band D and Band H is twice Band D.
Finally, the estimated number of Band D equivalents to be built in the year are added to the list. This then gives the total number of Band D equivalent properties to use for the Tax Base.
The Tax Base is used to calculate the Band D charge for each town or parish which is done by dividing the total Precept requirement by the Tax Base. This figure will be compared with the previous year’s Band D charge and supplied to the Parish.
For instance, for the 2021/22 financial year for Caversfield, the Tax Base was 568.5, but the estimated Tax Base for 2022/23 is 556.2.
There are a number of reasons why the Tax Base changes.
It can go up if more homes are created.
But it can go down due to more properties in the town or parish claiming for discounts – most commonly an increase in the number of properties claiming the single occupancy discount.
Other factors will include homes being demolished, becoming empty, becoming second homes, boundary changes or even a change in collection date.