WILTSHIRE Council has defended a quirk in council tax bills that mean people living in a modest home in the county will pay hundreds of pounds more a year than those living in a £136 million mansion in London.

An investigation by a national newspaper showed that a three-bedroomed semi in Wiltshire worth £335,000 would have a bill of £344 a year more than the Ukranian owner of a penthouse flat in Knightsbridge with the astonishing £136.4 million price tag.

The Kensington house has with council tax payments of £1,376 a year but the modest Wiltshire home has a council tax bill of £1,720.

A spokesman for Wiltshire Council said: ‘It is difficult to compare Wiltshire and London as there are many factors to consider, such as the income generated by each authority and its spending power. London would bring in much more money through car parking charges.

"Shire counties’ annual public sector spending is £550 per head compared to more than £1,100 in London. We also face pressures that a city does not due to our rural location which means we have faced council tax rises."

The Daily Mail says the absurd situation happens all over the country where wealthy homeowners are asked to pay less than those in difficult financial situations.

Although the Valuations Office Agency is responsible for working out which council tax band each home should fall into, it does not decide what those charges should be. That’s up to individual councils. Council tax accounts for around 25 per cent of local authority income; the rest mainly comes from central government grants. So some councils charge households more if their handouts don’t cover their expenditure.

But no property in Westminster can be charged more than £1,376.28 a year and other boroughs such as Westminster and Wandsworth also keep their bills low.

Cliff Dalton, of the Chartered Institute of Public Finance and Accountancy, said: "Because the value of the housing market has soared and there hasn’t been a revaluation since 1991, the council tax system feels out of sync.

"This is why you might find someone in central London living in a house worth £1 million but on a banding that seems quite modest."