Scotland announces £150 council tax rebate for 1.85m households

SNP finance secretary Kate Forbes announced on 10 February 2022 that 73% of Scottish households would receive a £150 council tax rebate in April 2022, a figure reported as 1.85 million households¹. The announcement came a week after Chancellor Rishi Sunak set out similar help for England in a statement on 3 February 2022, which he said aimed to "take the sting" out of price rises¹.

In Scotland, the rebates will go to households in all council tax bands that are currently part of the council tax reduction scheme, plus those in council tax bands A to D¹. Forbes indicated a preference for the rebate to be distributed as a payment, but local authorities also have the option to issue it as a council tax credit if necessary¹.

The Scottish measure sits alongside support announced for the rest of the UK:

The Welsh measures were announced by finance minister Rebecca Evans on 15 February 2022¹. As council tax systems in Scotland, Wales and Northern Ireland work differently from England's, these devolved nations are expected to receive £565m of Barnett funding as a result of the council tax rebates granted in England¹. Northern Ireland will be funded with around £150m of comparable funding through the Barnett formula next year, as energy policy is devolved¹.

Separately, Ofgem announced that the energy price cap would rise by £693 in England, Scotland and Wales from April, taking bills for the average customer to £1,971¹. All domestic electricity customers will receive a £200 credit on their energy bill in October 2022, which the government will initially meet but which customers repay at £40 a year over five years from 2023¹. Local authorities will also receive a £144m discretionary fund to help those on low incomes and vulnerable residents, particularly those who do not pay council tax, or who pay it on properties in bands E to H; how much is given and who is eligible will vary between local authorities¹. The Chancellor also confirmed plans to expand eligibility for the Warm Home Discount, expected to benefit 3m households, with a £10 uplift to £150 from October¹.

Why it matters for households

For households in Scotland in bands A to D, or in any band covered by the council tax reduction scheme, the £150 is a one-off reduction in the amount due for the year from April 2022, delivered either as a payment or as a credit on the bill¹. It is not a recurring change to council tax rates, and the Scottish Government has not reported whether it will be repeated. Households in bands E to H in Scotland that are not in the reduction scheme are not covered by the rebate as described¹.

The timing matters because the rebate lands in the same month as the higher energy price cap¹. The £200 energy credit is not a grant: it is recovered through bills at £40 a year for five years from 2023, so the net effect on household energy costs over that period is a £200 advance followed by £200 of repayments¹. Households that do not pay council tax directly, including some on low incomes, fall outside the rebate and are instead directed to the local authority discretionary fund, where amounts and eligibility vary by area¹. Free guidance on Scottish payments and benefits is available through Money help in Scotland.

What happens next

Local authorities are expected to credit people's accounts with £150 in April, using saved bank account details where council tax is paid by direct debit¹. The £200 energy credit is due in October 2022, with repayment beginning in 2023¹. The government says more detail on which households will qualify for the expanded Warm Home Discount will be published after a consultation¹.