The following section covers the following areas of Council Tax legislation;
Changes to the Discount regime for 2004/05 ~ Section 76 Local Government Act
Single Person Discounts can be granted in relation to Council Tax liability under S11 Local Government Finance Act 1992.
Discount can only be granted if there is one of the following circumstances existing within the household:
25% Discount ~ Where a single adult has their sole or main residence within the chargeable dwelling
25% Discount ~ Where more than one adult has their sole or main residence within the dwelling but all but one of the persons is disregarded for discount purposes.
50% Discount ~ Where the premises is no ones sole or main residence or where all the persons in the premises are disregarded
It is important to note that discount should only be granted if it is considered that there is only one person resident / other persons resident are disregarded.
Where there is any doubt the procedures outlined in relation to liability and sole or main residence should be followed.
There is a legal requirement for the Authority to review all discounts at least on an annual basis. either by means of a postal canvass or visit
From 1st April 2013 Exemption Class C has been removed and replaced by a locally determined discount. The period, criteria and principles are to be determined by each local authority.
From 1st April 2013 Exemption Class A has been removed and replaced by a locally determined discount. The period, criteria and principles of the 'old Class A' apply however it is for each authority to determine the level of discount (if any) that shall apply for the whole 12 months period.
The Local Government Act inserts new section 11A into the 1992 Act. This section will give the Secretary of State the power to prescribe classes of dwellings for which billing authorities may either reduce the current 50% council tax discount to a minimum of 0% (from 1st April 2013 - prior to April 2013 the minimum discount was 10%), and for which they may reduce or completely remove it, in all or part of their areas.
The Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003 prescribe three classes of dwellings for these purposes - Class A, B and C. Classes A and B define those dwellings for which billing authorities may reduce the council tax discount from between 50% to 10% (second homes), and Class C those dwellings where they may reduce the discount to nil (long term empty homes).
Second homes are defined in Classes A and B (Regulations 4 and 5). These are dwellings that are no one’s sole or main residence and furnished. Class A dwellings are second homes where occupation is prohibited by law for a continuous period of at least 28 days in the relevant year, e.g. holiday homes or chalets subject to a planning condition restricting year round occupancy. Class B dwellings are second homes where occupation is not restricted. The definition of two classes will give local authorities more flexibility in determining changes in second homes discounts.
However the second homes for which the discount can be reduced do not include any dwelling that consists of a pitch occupied by a caravan or mooring occupied by a boat. Neither do second homes for which the discount can be reduced include dwellings where the liable person is also liable for council tax for another, job-related, dwelling provided to him or his spouse/civil partner by reason of their employment, i.e. tied accommodation (regulation 6 and the Schedule to the regulations). Nor will billing authorities will be able to reduce the discount for second homes owned by service personnel who live in a Class O exempt job-related dwelling (accommodation provided by the Ministry of Defence).
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.
The definition of “job-related dwelling” has been taken from the Council Tax (Prescribed Classes of Dwelling) (Wales) Regulations 1998 (S.I. 1998/105), although the definition of “director” has been amended to reflect current legislation. (Welsh billing authorities already have power under section 12 of the 1992 Act to reduce from 50% to 25%, or remove, the discount for second homes falling within the classes prescribed in those regulations).
It was, and remains, our policy intention that where clergy have a "job related dwelling" and a second home in England, then the new local discretion to reduce the 50% discount on the second home would not apply.
However, it has become apparent that the wording of the Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003 (SI 2003/3011) does not achieve this policy because of the interaction of the new regulations with the existing Council Tax (Liability for Owners) Regulations 1992 (SI 1992/551).
Phil Hope, Parliamentary Under Secretary of State, has now signed amending regulations to ensure that clergy do not lose the 50% discount on their job related second homes.
Council Tax (Liability for Owners)(Amendment) Regulations 2004
LA.s are be able to reduce or remove completely the current 50% discount for long term empty dwellings in all or part of their district.
From 1st April 2013, the Local Government Finance Act 2012 amended the 1992 Act makes provision for an empty homes premium to be charged in relation to such classes of long term empty dwelling as billing authorities choose, subject to exceptions prescribed by the Secretary of State. The level of the premium can be up to 50% on top of the Long Term Empty charge.
The following classes of dwelling (The Council Tax (Prescribed Classes of Dwellings) (England) (Amendment) Regulations 2012) are exempted from the premium;
Class E ….is the sole or main residence of an individual where that individual is a qualifying person in relation to another dwelling provided by the Secretary of State for Defence for the purposes of armed forces accommodation, and which for that individual is job-related; or
would be the sole or main residence of an individual if that individual were not a qualifying person in relation to another dwelling provided by the Secretary of State for Defence for the purposes of armed forces accommodation, and which for that individual is job-related. (No empty home premium)
Class F…. which forms part of a single property which includes at least one other dwelling; and which is being used by a resident of that other dwelling, or as the case may be, one of those other dwellings, as part of their sole or main residence. (No empty home premium)
From April 2019 changes have been made through the Rating (Properties in Commons Occupation) and Council Tax (Empty Dwellings) Act 2018.
The legislation allows for the following changes in legislation which essentially means that authorities may charge:
100% premium where the premises have been unoccupied and substantially unfurnished for under 5 years;
200% premium where the premises have been unoccupied and substantially unfurnished for 5 years but under 10 years; and
300% premium where the premises have been unoccupied and substantially unfurnished for 10 years or more
(1)Section 11B of LGFA 1992 (higher amount for long-term empty dwellings: England) is amended as follows.
(2)In subsection (1)(b) (maximum percentage by which council tax may be increased)—
(a)after “that day” insert “(“the relevant day”)”, and
(b)for “50” substitute “the relevant maximum”.
(3)After subsection (1) insert—
“(1A)For the financial year beginning on 1 April 2019 the “relevant maximum” is 100.
(1B)For the financial year beginning on 1 April 2020 the “relevant maximum” is—
(a)in respect of any dwelling where the period mentioned in subsection (8) ending on the relevant day is less than 5 years, 100;
(b)in respect of any dwelling where the period mentioned in subsection (8) ending on the relevant day is at least 5 years, 200.
(1C)For financial years beginning on or after 1 April 2021 the “relevant maximum” is—
(a)in respect of any dwelling where the period mentioned in subsection (8) ending on the relevant day is less than 5 years, 100;
(b)in respect of any dwelling where the period mentioned in subsection (8) ending on the relevant day is at least 5 years but less than 10 years, 200;
(c)in respect of any dwelling where the period mentioned in subsection (8) ending on the relevant day is at least 10 years, 300.”
