A parish council is doing its bit to ease the financial gloom by offering its residents a £15,000 ‘tax holiday’.

The parish council in Islip, near Kidlington, has decided to give its 318 households their first break from its yearly council tax levy, by charging them nothing for its portion of the council tax. It is expected to save an average £46 a head.

The council raises the money to pay for services such as the upkeep of footpaths and bus shelters.

But this year, due to the low level of return on its savings, about £35,000, it has decided to use a portion of the money to pay for its services, costing about £10,000 in total.

Its main area of expense for the year was going to be on the upkeep of the play area, which would have cost about £14,000.

However, the arrival of unexpected grant money meant the parish council did not have to dip into its own finances.

Villagers will still have to pay district and county council levies.

Parish council chairman John Sargent, 75, said: “This isn’t our money, it belongs to the people of Islip, so in these difficult times it seemed the right thing to do.

“It would have been wrong to let our reserves sit there not accumulating very much interest.”

Parish councillor Johanna Stephenson, 49, of Confessors Gate, said: “I think it’s terribly important the community know the parish council is on their side. We know the financial difficulties they’re having, even if this is just a drop in the ocean.”

Fellow parish councillor Mike Coleman, 57, of High Street, said: “I think it’s important you don’t just take the money from people just because you can.

“It’s a good time to give this money back to people and put it into their pockets.”

The move follows in famous footsteps, coming around 950 years after Islip’s most famous son, Edward the Confessor, abolished an unpopular national military tax collected to defend the country from invaders.

Council clerk Michael Wilkinson said: “This is as far as a parish council can go, but we hope it goes down well with villagers.”

Mark Wallace, campaign director for the public spending pressure group Taxpayers’ Alliance, said: “This is an extremely unusual move, but fantastic news and should be an example to other councils around the country.”