Anyone who owns property in the UK must pay council tax. Now at present the amount paid depends purely on the band in which your property lies, except in the case where a single person occupies the property when this is reduced by 25% or if the property is occupied purely by student when it is zero rated. So the council knows how many houses are to pay and work out the appropriate rate. So my question is, and I have been unable to find the answer on the net: There is almost certain to be a shortfall for the following reasons: 1. Many houses contain students so do not contribute 2. Many houses have a single occupant so pay a reduces rate 3. Many houses are occupied by those on social security and low incomes so get a reduction. How is this lost revenue recovered? 1 Is it from central governments coffers? 2 Do they increase the rate so that those who do pay actually pay for those who do not? I would love to know the answer and am sure an RR ember will be able to enlighten me.