Council tax leaves Brits most bitter

As the deadline for self-assessment tax returns looms large, council tax has been declared the most hated tax of all by users of MSN Money.

The ‘Tax Hates’ survey pitted ten forms of UK tax against each other in one-on-one ‘battles’ with council tax winning 79% of its encounters against other taxes to emerge as the biggest tax bugbear over the likes of inheritance tax and stamp duty.

However it seems the cost of council tax is not the reason we hate it; in fact three of the top five ‘tax nasties’ take a much bigger bite out of our savings than we pay for the upkeep of our local borough. So why do we despise it so much?

According to Alastair Bruce, MSN Money Editor; “Council tax being voted as the most hated tax is not that surprising. Although it represents a comparatively low proportion of our earnings and income tax, stamp duty and inheritance tax can all carry a far heftier bill. As such the result reflects people’s displeasure with the level of service they receive in return for their monthly contribution, and the rapid and often unexplained rate of recent increases.

“People are angry that their bills have increased far above the rate of inflation with often little improvement in public services; they also feel they have little say about the increases and how the money is spent, and that council tax is not based on your ability to pay. It seems that people simply want a fairer and more transparent council tax system.”

Britain’s ‘Top Ten Tax Nasties’ as voted for by users of MSN Money are:

1. Council tax - All residents must pay council tax to their local government. The amount that households are charged is calculated based on the value of the property they live in.

2. Fuel duty - This is a duty charged on oils, including road fuels, such as petrol and diesel. The rates are decided annually by the chancellor.

3. Inheritance tax - Beneficiaries of an estate must pay 40% inheritance tax if the assets held by an estate are worth more than £300,000.

4. VAT - An indirect tax, Value Added Tax (VAT) is charged as a percentage of the selling price of most goods or services.

5. Income tax - This is the government's primary source of revenue. It's a percentage of your earned income plus some types of unearned income, minus certain allowances and deductions.

6. Stamp duty - This is a levy charged on certain transactions, such as the transfer of property ownership or certain share sales. The charge is a percentage of the total purchase value within set limits.

7. Road tax - Correctly called Vehicle Excise Duty (VED), this is an annual tax charged to use public roads, paid by vehicle owners. Since 1998, road tax was calculated in a series of bands, based on engine size or CO2 emission ratings.

8. Capital gains tax - This is taxed as a percentage of the increase in the net value of an asset (the capital gain) in the period from purchase to the date of sale.
9. Insurance tax - A tax payable by insurers on premiums paid for most insurance contracts. There are some exemptions.

10. Sin taxes - Technically these are a series of duties levied on items like cigarettes or alcohol to offset the associated negative effects they have on people not directly connected to the sale.