Hedge End Town Council Budget 2023/24

The Parish Precept

The primary source of income for most Parish councils come from the Precept, which is a local tax collected by the District Council on behalf of the Parish.

This money is required to run the council and pay to maintain and improve the facilities, activities and services that local Parish Councils provide and is normally the operational cost difference between expected expenditure and income in any one year. A proportion of this money is prudently held in reserve for either future planned projects and/ or unexpected events.

What is a Parish Precept?
A Parish Council gets its funding by receiving a small amount of the local Council Tax. This is referred to as The Parish Precept.

How is the precept calculated?
Each Parish Council forecasts the amount of funding it will require for the following year and requests this funding from its Borough/District Council (in Hedge End’s case, this is Eastleigh Borough Council) in the form of a precept tax that is included within the local Council Tax. A Council Tax base is calculated by equating to the number of Band D equivalent properties in each Parish/Area after taking into account things like:

The number of properties in each band during the year (i.e. including the results of changes and appeals), Disabled relief, Discounts and exemptions, Provision for bad or doubtful debts and allowance for growth.

The tax base figures are expressed as Band D equivalents in accordance with the relevant regulations. This means that a property in Band B will be expressed as being equivalent to 7/9ths (or 0.8) of a Band D property whilst a property in Band H will be expressed as two Band D properties. Therefore, in this example the two properties together would be expressed as 2.8 Band D properties.

The tax base is used to indicate the amount of Council Tax required for the Parish to cover the precept by performing the following calculation:

1. Divide the precept by the Council tax base for your Parish. This will provide you with the Council Tax for a Band D property.

2. Multiply the Band D Council Tax by the appropriate factor to calculate the Council Tax for each of the other bands.

These factors are shown in the following table:

Band    Factor    Comment
A         5/9        (entitled to Disabled Relief)
A         6/9   
B         7/9   
C         8/9   
D         1   
E         11/9   
F         13/9   
G         15/9   
H         2  

 
For example, if a Parish has a tax base consisting of the equivalent of 1,000 Band D properties and levies, a precept of £20,000, the Council Tax for a Band D property would be £20. Multiplying by the appropriate factors the Council Tax for each Band would be as follows:

Band    Formula    Example Council Tax    Comment
A        £20 x 5/9       £11.11                       (entitled to Disabled Relief)
A        £20 x 6/9       £13.33   
B        £20 x 7/9       £15.56   
C        £20 x 8/9       £17.78   
D        £20 x 1           £20.00   
E        £20 x 11/9     £24.44   
F        £20 x 13/9     £28.89   
G        £20 x 15/9     £33.33   
H        £20 x 2           £40.00   

It should be noted that, in addition to any Council Tax resulting from the Parish precept, there will also be Council Tax levied in respect of the Borough and County Councils and the Police and Fire Authorities.

What does all this mean?

All this means that, even if the Parish Council requests the same financial precept for the whole parish for the next financial year, due to changes in the number of Band D equivalent properties in the Parish, the individual precept against each property may change. This can result in the individual precept rising or falling by a small percentage even when the parish precept as a whole has not changed.