Council tax replaced the poll tax in 1993
As ministers threaten to take action against local authorities in England with excessive council tax rises, BBC News Online studies the charge and how it works.
What is council tax?
Council tax is a local property tax in England, Scotland and Wales.
In England, it is levied by councils to top up central government funding of the local services they provide.
This year, the government estimates that council tax will account for 25% of local spending. The rest is funded centrally through a government grant.
The Scottish Executive and Welsh Assembly have similar roles to Westminster.
But Northern Ireland has a different local tax called rates.
What does it pay for?
Local services such as education, housing, planning, transport, highways, police, fire, social services, libraries, leisure and recreation, rubbish collection and disposal, environmental health and trading standards.
It does not pay for health services.
The total bill covers the estimated spend of all the authorities responsible for providing services in that area, including police and fire authorities and the Greater London Authority in the capital
How is it calculated?
The government allocates grants to each local authority based on what it estimates they will need to spend.
This calculation is based on a formula which takes into account such factors as how many elderly people, school children and disabled people live in the area.
This information is taken from sources such as the Census.
Once the total spending need is calculated, the government sets the grants and it is up to local authorities to raise the rest from council tax.
The government estimates the level of council tax, assuming local authorities as a whole spend at the level it thinks they should.
The commonly quoted level of council tax is for a band D property.
The government thinks the fairest way to set each bill is based on property value, although this is being reviewed.
There are eight bands, from A to H, based on values set by the Inland Revenue Valuation Office in 1991. The overall bill depends on which band your property falls into.
England, Scotland and Wales have separate cost levels for the bands.
What is the timetable for these sums?
Councils find out in the autumn how much grant they will receive and then have until March to set their tax.
The deadline for setting council tax is 11 March and submissions must be received by government one week later.
In that period, they work out their spending plans in the knowledge that extra expenditure beyond the government estimate will have to be raised in tax.
That is why some authorities claim they have to cut services to keep council tax increases down.
Why is council tax increasing so much in England?
Last year the average rise in England was 12.9% - the highest since council tax replaced the unpopular poll tax 11 years ago.
A recent report by the Audit Commission said the whole local government finance system was "fundamentally flawed" and it is under review.
Councils often blame central government by saying the grants they receive are not big enough.
Some authorities have complained their spending responsibilities are increasing more than the grants, but ministers say this is accounted for.
Local government minister Nick Raysnford claims central government funding of councils has increased by 30% in real terms since 1997 and says councils must improve efficiency.
Sometimes this becomes a political issue, with Labour and Conservative councils lauded by their political parties for their financial management.
In Scotland and Wales, the rises are not as high or controversial.
What is capping?
Capping is government action taken against councils it thinks have set a rate increase that is too high.
Ministers step in to limit the tax hike and force the local authority to cut spending.
These powers were last used in 1997.
It has been threatened again this year in England but a decision is not likely until after all the new council tax levels are submitted on 18 March.