What is a precept and how is it calculated?

Council Tax precept setting

Parish and town councils have the right to raise money from their parishioners via the Council Tax process. They do this by 'precepting' on the principal council (North West Leicestershire District Council) who levy on tax payers in that parish or town as part of the Council Tax billing. A Council Tax payer's bill will typically include a Council Tax charge for the county council, police authority, district or borough council and the parish council.

How the tax base is calculated by District Councils

The tax base is the number of properties that the councils are able to levy a Council Tax charge from. The tax base is expressed in terms of 'band D equivalent properties' and is calculated at a point in time (around October) taking into account all chargeable properties, this is then adjusted for:

• any known development in the forthcoming year
• any known discount or exemptions
• an anticipated collection rate

How the precept is set by a parish council

Each parish council sets its precept (how much money it would like to raise from its tax payers), based on its budget requirement.

Once the parish council knows how much it needs then they will instruct the district council by January each year.

How the council tax charge for each band in a parish or town is calculated

Once the district council has established the tax base and precept for each parish or town council, the Council Tax that applies to each band of property in the parish is calculated. This is done by dividing the precept by the tax base to establish the charge for an average band D property. This charge is then added to the charges from Leicestershire County Council, NWLDC council and the Leicestershire Police Authority and a ratio applied to calculate the charges for all other bands.

The tax base is the number of properties that the council tax will be collected from.

For 2024-2025 this is calculated as

Council tax base 2349 properties

Therefore £250,000 budget / 2349 properties = £10 6.42per band d property