Discounts - Case Law

The High Court agreed with a Valuation Tribunal that a dwelling was not a residential care home and that the residents could not be disregarded for the purposes of Council Tax discount. On this basis, a 50% no resident discount was not applicable for the dwelling in question. Justice Moses dismissed Mr Bogdal’s appeal.

Schedule 1 of the LGFA 1992 provides a list of persons that can be disregarded for Council Tax purposes. Paragraph 7 provides for “patients in homes in England and Wales” to be disregarded.

“Care home” means

(a) a care home within the meaning of the Care Standards Act 2000 or

(b) a building or part of a building in which residential accommodation is provided under section 21 of the National Assistance Act 1948:

“Independent hospital” has the same meaning as in the Care Standards Act 2000.

The legislation referred to in (a) provided that registration was not required in respect of a small home if only persons receiving board and personal care there were persons “carrying on the home”, employed there or their relatives. A small home was defined as an establishment having fewer than four persons receiving board and personal care.

Mr Bogdal contended that the dwelling was a small home that did not have to be registered and that the occupants (himself, his mother and another elderly lady) should be disregarded for discount purposes, thereby qualifying for a 50% no resident discount. Justice Moses agreed with the Tribunal’s findings that the dwelling was not a small home but an ordinary domestic dwelling. Evidence was placed before the Tribunal that neither Mr Bogdal’s mother nor the other elderly lady were receiving personal care. Justice Moses also concluded that there was no evidence to support the notion that the dwelling was an “establishment”.

The appellant subsequently appealed to the Court of Appeal which held that it was not an establishment as there was no element of organisation in the way it was run.

The taxpayers, Miss Mullaney and Mr Clayton, each received a 25% single resident discount in respect of two separate dwellings. The Billing Authority removed Mr Clayton’s single resident discount and Miss Mullaney was awarded a 50% no resident discount for her dwelling on the basis that it was no person’s sole or main residence. The Valuation Tribunal dismissed Miss Mullaney’s and Mr Clayton’s appeals, thereby upholding the Billing Authority’s decision.

Miss Mullaney and Mr Clayton appealed to the High Court. Justice Scott Baker considered the evidence presented at the Tribunal hearing in relation to the issue of which of the two dwellings was Miss Mullaney’s main residence, including: early morning surveillance reports; benefit investigation officer’s meetings with Mr Clayton; and, location of Miss Mullaney’s possessions. The High Court dismissed Miss Mullaney’s and Mr Clayton’s appeals.

The appeals were concerned primarily with the issue of “sole or main residence”. However, the determination of sole or main residence had ramifications for the awarding of discounts to the taxpayers. A dwelling which is only one person’s sole or main residence will attract a 25% single resident discount; a dwelling which is no person’s sole or main residence may attract a 50% no resident discount.

The VT’s decision was quashed because it had erred in its finding that Mrs Evans was a full time student doing a qualifying course of education. Mrs Evans was undertaking an All Wales Part Time Occupational Therapy Course at the University of Wales. The High Court decided that Mrs. Evans’s course of study did not meet the qualifying criteria for the Council Tax (Discounts Disregards) Order 1992 because she was not required to attend the college for 24 weeks or more in an academic year.

In Lever v London Borough of Southwark [2009] EWHC 536 (Admin) (26 February 2009) the High Court outlines that the appellant had purchased the property in question - a one-roomed flat with no separate bedroom - in his own name in 1978. However, since 1984 it has been vested in the name of an investment company, of which he and his daughter are directors -

'The flat is very modest ... It provides overnight accommodation and it is used also for the purposes of the business of the company when one of the directors is present. In other words, it is a place to sleep and it is a place to work ... it has been used by both Mr Lever and his daughter when they have needed to be in London for the purposes of the business of ... the investment company. Mr Lever stays in the property on a periodic basis and ... sometimes he stays twice per week, sometimes twice per month. There is no regularity; it depends upon the needs of the company. His home — it is clear on any view his first home — is ... in Gloucestershire.'

However, the valuation tribunal had held that the appellant's circumstances did not fall within paragraph 1(1)(a) -

'... from the evidence presented both verbally and in writing ... Mr Lever's business work could be operated from other dwellings equally as well .... There must be a link established between the duties of employment and the particular property in which the employee is living, such that it would be impossible to carry out the duties if he were living in a different property. In this case it is a matter of personal choice and not a matter of employment dictates.'

Upholding the tribunal's decision, the High Court holds that -

paragraph (a) is intentionally restrictive, and it must be necessary for the proper performance of the duties of employment that the employee should reside in that dwelling - 

'I believe that the provision is intended to refer to dwellings that are connected with the duties of employment — for example, a dwelling provided in the grounds of a care home, where the employee has to go into the care home in the course of his work; another example would be a dwelling which is provided in the grounds of a school. In every case residence in the dwelling concerned has to be necessary for the proper performance of the duties.'

on the facts, the appellant does not reside in the dwelling - 

'Residence connotes a situation of some permanency; it does not mean that you stay there occasionally, sometimes twice a month, sometimes twice a week. You must reside there. If anybody asks, Where does Mr Lever reside?, on the facts presented to me, the answer would be plain: he resides in his home in Gloucestershire and he uses the flat in London for occasional stays in connection with his directorship.