Debt Advice Handbook (13th edition)Chapter 5: Types of debt Council tax
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Council tax
This is a tax administered by local authorities, comprising two equal elements – a ’property’ element and a ’people’ element.
For more detailed information, see CPAG’s Council Tax Handbook.1Council tax also applies in Scotland. For the position where a Scottish local authority is pursuing a client who lives in England or Wales for unpaid Scottish council tax, see ‘Q & A with Shelter Specialist Debt Advice Service’, Quarterly Account 52, p24.
 
1     Council tax also applies in Scotland. For the position where a Scottish local authority is pursuing a client who lives in England or Wales for unpaid Scottish council tax, see ‘Q & A with Shelter Specialist Debt Advice Service’, Quarterly Account 52, p24. »
Property element
All domestic properties have been valued and placed in one of eight valuation bands in England and nine in Wales.
In England, the valuation is based on what the property would have sold for on the open market in April 1991. In Wales, properties were revalued on 1 April 2003 and the new valuations took effect from 1 April 2005. It is assumed that the property was sold freehold (or with a 99-year lease for flats), with vacant possession and in a reasonable state of repair. Under some circumstances, an appeal against this valuation can be made. Certain properties are exempt, and advisers should check to make sure that exemption has been applied for, if appropriate.
People element
The tax assumes that two adults aged 18 or over live in each household. Nothing extra is payable if there are more than two adults. One adult living on her/his own receives a 25 per cent discount. If there are no adults, there is a 50 per cent discount. If the latter applies, it may be that the property is exempt, and you should check whether this is the case.
When counting the number of adults in the household, certain people can be disregarded and this should be checked. In addition, in certain cases, there are reductions for people with disabilities whose homes have been modified or if a disabled resident uses a wheelchair in the home. Note: the disabled person does not have to be the person liable for the council tax.1For further details, see Chapter 6 of CPAG’s Council Tax Handbook.
 
1     For further details, see Chapter 6 of CPAG’s Council Tax Handbook. »
Liability
A council tax bill is sent to each domestic property. There is a ’hierarchy’ of liability, as follows:
    •resident freeholder (owner);
    •resident leaseholder;
    •resident statutory/secure tenant (including a council tenant);
    •other resident(s);
    •non-resident owner (depending on the terms of her/his tenancy, a former tenant who no longer occupies the property could come into this category1Leeds CC v Broadley (Adviser 181 abstracts). See also R Curry, ‘Liabilities on Leaving a Tenancy’, Quarterly Account 49, IMA).
If there is more than one resident who has the same interest in the property (ie, joint owners or joint tenants), they are ‘jointly and severally’ liable. This means that all the people concerned can be asked to pay the full charge, together or as individuals. Married couples and couples who live together are jointly liable. A single bill is sent, either in the name of one of the persons concerned, or in both names.
Students and people who are ’severely mentally impaired’ are disregarded and may be exempt. They cannot be jointly and severally liable if there is someone else with the same status and legal interest in the property who is not exempt. Dwellings in which all the occupants are students and/or severely mentally impaired are exempt.2For a discussion of when a resident who is disregarded can be liable for council tax, see Shelter Specialist Debt Advice Service, ‘Q & A’, Quarterly Account 52, IMA
Bills should be issued less any discounts, deductions and council tax reduction (also known as council tax support), and must arrive at least 14 days before the first instalment falls due. The local authority usually asks for payment by 10 monthly instalments but must offer the option of paying by 12 monthly instalments if requested to do so. Any discount(s) can be backdated indefinitely.
There is a right to appeal to a valuation tribunal against certain decisions, including those on liability, valuations, discounts, exemptions and council tax reduction.3See A Murdie, ‘When the Ombudsman is not Enough’, Adviser 158; SC v East Riding of Yorkshire (Adviser 164 money advice abstracts)
Local authorities have the power to reduce or remit sums of council tax, including arrears, in cases of hardship (see here).4s13A LGFA 1992
 
1     Leeds CC v Broadley (Adviser 181 abstracts). See also R Curry, ‘Liabilities on Leaving a Tenancy’, Quarterly Account 49, IMA »
2     For a discussion of when a resident who is disregarded can be liable for council tax, see Shelter Specialist Debt Advice Service, ‘Q & A’, Quarterly Account 52, IMA »
3     See A Murdie, ‘When the Ombudsman is not Enough’, Adviser 158; SC v East Riding of Yorkshire (Adviser 164 money advice abstracts) »
4     s13A LGFA 1992 »
Checklist for action
Advisers should take the following action.
    •Consider whether emergency action is necessary (see Chapter 8).
    •Check whether the property is exempt and the client is in receipt of all relevant discounts and reductions, including council tax reduction.
    •Check liability for the debt, including any associated bailiff’s charges. Consider whether there are any grounds for a complaint.
    •Assist the client to choose a strategy from Chapter 8, as this is a priority debt.