Average family home 'could see council tax rise by £120 per year as Treasury prepares to let local authorities increase bills', report claims

Families are set to be hit by council tax rises of as much as £120 a year for an average home, a report has claimed.

Jeremy Hunt will reportedly give English local authorities the go-head to allow tax bills to go up by up to five per cent from April next year.

This is despite the Chancellor facing calls from Tory MPs to cut taxes ahead of the general election.

Band D households in Rutland were charged the highest rates of council tax in the country last year of £2,365.56 by the authority.

But if allowed the council and the local police and fire services raise bills by the most they are allowed to, that bill could go up by more than £120 to £2,486.32.

And households which pay the highest levels of council tax in Rutland will need to cough up around £240 more than last year,  The Telegraph reports.

Dozens of other local authority areas could also see tax bills increase by more than £100, the paper reported.

A huge tax cut for businesses is wanted by the Chancellor, which could be given through expansion of 'full expensing' so corporation tax can be reclaimed on investments.

Connor Holohan from thinktank the TaxPayers' Alliance said the council tax plans will 'heap misery on struggling households' already hit by the cost of living crisis.

Council tax rises are likely to outstrip inflation, which currently stands at 4.6 per cent as is likely to fall in the following months.

Councils are not set to decide until next year how much they will raise local taxes by, and in previous years most have chosen to do by the maximum allowed amount without requiring a local referendum, which would be unlikely to succeed.

It is believed that the Treasure will next week confirm that local authorities will be allowed to put bills up by three per cent and another two per cent on top for social care if they are responsible for it. Police forces will be allowed to raise their share by £15 and fire services by £5.

A large chunk of council tax rises will go towards social care which is facing ever-rising demand due to Britain's aging population.

It is feared that Birmingham City Council, the largest in Europe, may be given powers to raise council tax by more than five per cent after it was declared effectively bankrupt in September, forcing the Government to send in commissioners.

The London Borough of Croydon was given similar powers last year after it was allowed to raised council tax bills a whopping 15 per cent.