The poorest households in Somerset will pay no council tax whatsoever in the first year of the new unitary authority.

Somerset County Council and the four district councils – Mendip, Sedgemoor, Somerset West & Taunton and South Somerset – will be formally dissolved on April 1, 2023 and replaced by the unitary Somerset Council.

The full council met in Bridgwater on Wednesday morning (November 23) to give its backing to plans to standardise council tax relief across the county, providing discount for working families, single occupants and foster carers.

The council has also confirmed its intention to introduce higher council tax premiums on vacant properties and to end discounts on second homes in a bid to tackle the housing crisis.

The full council tax bands will be agreed when the unitary's first annual budget is set in February 2023, with the council still needing to find more than £38m in savings to balance the books.

Under the current system, there are different levels of council tax discount available in each district, with some discounts being means tested and the percentage taken off someone's bill varying from place to place.

The new council tax scheme, which will take effect from April 1, 2023, will see these discounts standardised to reduce red tape and ensure fair treatment for all Somerset residents.

The biggest change will see a single person earning less than £95 a week, or a couple earning less than £260, being completely exempt from paying any council tax.

The discount offered will then be tapered depending on people's weekly earnings, with some families with a weekly income below £500 being entitled to either a 25 per cent, 40 per cent or 75 per cent discount.

The council believes that having a chunk of the population paying zero council tax would actually cost less than the legal fees of needing to chase unpaid bills, including the costs of any court cases.

A spokesman said: "The principle of all working age households paying 'something' was initially thought to be an approach that would be central to the design of council tax reduction.

"The reality is that, since its introduction, low-income taxpayers (the poorest households) have been unable to pay the balance, leading to additional costs, court, and enforcement action and, in some cases, the amounts demanded having to be written off as uncollectable.

"The costs of administration of these cases by all councils has increased significantly over the years, and these costs are borne solely by the council.

"With the difficulties experienced, the relatively low level of payment and the high administration costs incurred, it no longer makes these amounts economically viable to collect – notwithstanding the negative effects to those poorest households."

In addition to these discounts, people leaving the care system up to the age of 25 will continue to be exempt from council tax.

And in a new initiative, not currently offered by the four districts, registered foster carers and "special guardians" will receive a 50 per cent discount on their council tax bill.

Speaking before the full council meeting, Councillor Liz Leyshon, portfolio holder for finance and human resources, said: "This is going to be a very challenging year for council finances, but it is important that we provide help to the people who need it most, no matter where they live in the county.

"The new Somerset Council is a chance to make Somerset fairer for everyone.

"We also want to support our foster carers who make a real difference to the lives of vulnerable children in Somerset, as well as charities based in the county that do so much for so many people."

In addition to these discounts, the council will introduce measures designed to bring vacant properties across the county back into use.

Second homes will no longer receive any form of council tax discount, while properties which have been empty for at least two years will be liable for a 100 per cent premium on their council tax.

This premium will rise to 200 per cent for properties empty for five years, and then 300 per cent for those empty for ten years or more.

Councillor Steven Pugsley, who represents the Dulverton and Exmoor division, requested that the money generated from these premiums be used to built more low-cost homes in the former West Somerset area, which has a sizeable proportion of second homes.

He said: "May we have an assurance that the additional revenue generated will be hypothecated [sic] towards alleviating the housing crisis, and won't just disappear into the general fund?"

Councillor Frances Nicholson, who represents the same division, added: "The number of second homes in West Somerset is huge – it is a crisis.

"If there is to be a disproportionate increase in income relative to the area, then what we would be extremely keen on is an assurance that this money will be used to address the crisis in that area, not somewhere else."

Ms Leyhson said: "Our main concern with this is to get as many homes back into occupation as soon as possible. We will look at this proposal."