The precept is the Local Council’s share of Council Tax required to meet their budgeting requirements to invest in the community (e.g. open spaces, cemeteries, projects).
Each Town & Parish Council must budget, forecast, set and approve their required precept for the following financial year, to be received by their Borough or District Council.
So, how is the precept calculated?
In simple terms, the precept required will be the expenditure budget less expected income (and/or prior year surplus). For example, an expenditure budget of £150,000 with an income budget of £50,000 would mean a precept requirement of £100,000.
You then need to calculate the precept per Band D properties in your Town or Parish. With Band D being the middle band, it provides a Council Tax amount that represents the average property in your area, and also allows comparisons to be made across Local Councils of various sizes.
Don’t panic, your billing authority will provide you with the number of Band D properties in your area. You then need to take your required precept and divide this by the number of Band D properties (“Tax Base”).
For example, a precept of £150,000 and an equivalent of 1500 Band D properties, means the Council Tax for Band D properties would be £100.
You can expect a small variance year on year due to changes in your Town or Parish’s Band D properties, but large increases or decreases should be reviewed. It may be that the precept does need to increase or decrease significantly - this could be true if you had previously ended up with a large budget surplus or deficit.
Once the budget and precept has been agreed, it can be submitted to your local billing authority in readiness for the new financial year.