Welcome to Council Tax Support, a new resource on the changes to Council Tax Benefit. This website details the key features of each English local authority’s Council Tax Support scheme  alongside an analysis of the impacts of the council tax benefit reform.

This is not an advice site. If you believe that you may be affected by the changes, please contact your local authority for further details or Citizens Advice for support.

Changes to Council Tax Benefit

From April 2013 Council Tax Benefit (CTB) will be abolished and replaced by Council Tax Support (CTS). As part of the reform English local authorities have to devise their own schemes of CTS. This means a move from one national system to 326 local schemes in England alone.

All councils will have 10% less funding for CTS than they did under CTB. They are required by central government to provide the same level of support to pensioners as under CTB so any cut in support falls entirely on working-age recipients. Some councils will replicate the former CTB system and make savings elsewhere in their budgets. Other councils will make the savings by reducing the number of people entitled to the benefit and/or cutting the amount of benefit people receive.

The benefit system has always been nationally devised. The introduction of CTS marks the first time that benefit rules will vary by location. It has implications for every local authority and for the 3.1 million working-age CTB claimants in England.

Are Your Business Loans Tax Deductible?

Running a business is not a piece of cake, especially if you are on a tight budget. Sometimes, the business owners need funds to start a big project, and sometimes, they need replacing the equipment that has stopped working. No matter what’s the situation, the moneylenders can help you out.

The question that appears in your mind at the time of taking a loan is whether it will affect next year’s taxes or not. The good news that the loan won’t affect your taxes because the amount that lands in your account from a lender is different from what you earn from your business. So, there is no need to be worried about it.

However, the interest payments the borrower makes on loan put an impact on the tax responsibilities. You can lower your tax burden by deducting your interest payments based on the legal structure of your business and the type of loan as well. You should carefully submit the interest payments in the tax returns. Otherwise, things will get a little bit difficult for your business.

Is the Interest on my business loan tax deductible?

Yes, the interest payments of the business loan can be mentioned in the form of business expenses. Here are some qualifications your loan needs to meet:

  • The business owner is liable for the loan legally.
  • An agreement must be signed between the lender and the borrower for paying off the debt.
  • There must be a true lender-borrower or debtor-creditor relationship between you and the lender.

Make sure that you take the loan from a legitimate lender. The loan taken from friends isn’t tax deductible because friends and family members aren’t considered as real lenders such as online lenders and banks. In this case, the business owner won’t be able to deduct the interest payments. The reason why the IRS has implemented this rule is that they can’t verify these informal agreements by any solid way.

April 2017 update

The latest data on Council Tax Support schemes in England – how they work, how many claimants are affected and by how much.