Debt Advice Handbook Scotland 1st ed - with new materialChapter 4: Household debt4. Council tax Special features
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Special features
Property element
All domestic properties in Scotland have been valued and placed in one of eight valuation bands A to H. Any type of house or flat counts as a dwelling. Caravans count if they are the client’s main home. Properties with multiple occupation with shared facilities may count as one or more dwellings, dependent on arrangements.
The valuation of a property is based on what it would have sold for on the open market on 1 April 1991.
The Assessor does not normally adjust the valuation based on sale prices over time. They apply the comparative principle of valuation, which relies on comparing the physical and geographic features of the property to be valued with those of houses that sold around 1 April 1991.
The current bands are:
 
Range of values
Band
Up to £27,000
A
Over £27,000 and up to £35,000
B
Over £35,000 and up to £45,000
C
Over £45,000 and up to £58,000
D
Over £58,000 and up to £80,000
E
Over £80,000 and up to £106,000
F
Over £106,000 and up to £212,000
G
Over £212,000
H
 
 
The Council Tax Valuation List is a public document which contains the addresses and council tax bands for all domestic properties in the valuation area. It is available at the local Assessor’s office or on the Scottish Assessors Association’s website.
Certain properties are exempt, and advisers should check to ensure an 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 their own receives a 25 per cent discount.1s79 LGFA 1992 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. The disabled person does not have to be the person liable for the council tax.
 
1     s79 LGFA 1992 »
Liability
A resident for council tax purposes is a person who is 18 years or over and occupies the property as their sole or main residence.1s75 LGFA 1992
If there are more than one resident with 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. Members of a couple are jointly liable. A single bill is sent, either in the name of one of the persons concerned, or in both names.
Some people are disregarded and may be exempted from being counted as being residents living in the property. These include full-time students, people who are ‘severely mentally impaired’, unpaid carers, people held in detention and children under 18. 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.
Annual council tax bills should be issued less any award of council tax reduction (CTR), exemption or discounts, 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 this can be spread over 12 monthly instalments in certain circumstances.
A council tax bill is sent to each domestic property. There is a ‘hierarchy’ of liability, as follows:2s75(2) LGFA 1992
    •resident owner of the whole or any part of the dwelling;
    •resident tenant of the whole or any part of the dwelling;
    •resident statutory tenant, resident statutory assured tenant, or resident secure tenant of the whole or any part of the dwelling;
    •resident subtenant of the whole or any part of the dwelling;
    •resident of the dwelling or any of the following:
      ◦the subtenant of the whole or any part of the dwelling under a sublease granted for a term of six months or more;
      ◦the tenant, under a lease granted for a term of six months or more, of any part of the dwelling which is not subject to a sublease granted for a term of six months or more;
      ◦the owner of any part of the dwelling which is not subject to a lease granted for a term of six months or more.
A resident of the property is usually responsible for paying the council tax unless:
    •they rent and the owner has agreed to be responsible for paying it; or
    •they live in a house in multiple occupancy (HMO); or
    •they live in a hostel, nursing home or other accommodation where several individuals or households pay rent separately but share cooking or washing facilities; or
    •they live in a convent, monastery or other religious community.
There is a right to appeal to the First-tier Tribunal (Local Taxation Chamber) against certain decisions, including liability, valuations, discounts, exemptions and CTR.
 
1     s75 LGFA 1992 »
2     s75(2) LGFA 1992 »
Exempt properties
Some properties are exempt for six months (or longer) – eg:1Sch 1 CT(ED)(S)O
    •unoccupied and unfurnished new dwellings;
    •dwellings under repair;
    •dwellings last occupied by charitable bodies;
    •empty dwellings;
    •dwellings last occupied by persons living or detained elsewhere;
    •deceased owners;
    •dwellings empty under statute;
    •dwellings awaiting demolition;
    •dwellings occupied by a minister;
    •unoccupied dwellings for students;
    •repossessed dwellings;
    •agricultural dwellings;
    •dwellings difficult to let separately – eg, granny flats.
Others are exempt indefinitely. These include properties:
    •only occupied by one or more people who are in the UK under the Homes for Ukraine Sponsorship Scheme, where an approved sponsor provides the accommodation – this exemption only applies where it is their sole or main residence;2s2 The Council Tax (Exempt Dwellings) (Scotland) Amendment Order 2022 No.124
    •where the accommodation is provided with no payment in return, and only occupied by one or more people who are in the UK under one of the following schemes – this exemption only applies where it is their sole or main residence:3s2 The Council Tax (Exempt Dwellings) (Scotland) Amendment Order 2023 No.36
      ◦the Afghan Citizens Resettlement Scheme;
      ◦the Afghan Relocations and Assistance Policy;
      ◦the Community Sponsorship Scheme;
      ◦the UK Resettlement Scheme;
      ◦the Vulnerable Children’s Resettlement Scheme;
      ◦the Vulnerable Persons Resettlement Scheme.
 
1     Sch 1 CT(ED)(S)O »
2     s2 The Council Tax (Exempt Dwellings) (Scotland) Amendment Order 2022 No.124 »
3     s2 The Council Tax (Exempt Dwellings) (Scotland) Amendment Order 2023 No.36 »
Discounts, exemptions and reductions
Single person discount
A client may get a 25 per cent discount on their council tax bill if they are the only adult living in the property. This is not automatic and must be applied for.
Students, apprentices and trainees
Council tax does not need to be paid by anyone under 18, full-time students, student nurses and some apprentices or trainees.
Carers
Carers who live in the same property as the person they care for may get a discount on council tax. The carer must provide care for more than 35 hours per week.
The person receiving care must receive one of the following benefits:
    •child disability payment (CDP) or disability living allowance (DLA) – care component at the middle or high rate;
    •adult disability payment (ADP) or personal independence payment (PIP) – daily living component at any rate;
    •attendance allowance (AA) or pension age disability payment (PADP) – at any rate;
    •armed forces independence payment (AFIP).
The carer cannot look after their spouse, civil partner or a child under 18. It does not matter if the client is getting carer support payment or carer’s allowance. Their income and savings will not affect whether they can get a discount.
Disabled clients
Clients may be eligible for the disabled band reduction scheme if they live in a larger property than would be needed if they or another occupant were not disabled.1s80(1)-(4) and (6)-(7) LGFA 1992; The Council Tax (Reductions for Disabilities) (Scotland) Regulations 1992 No.1335
The client must show that they have either:
    •an extra bathroom, kitchen or another room that is needed for the disabled person; or
    •extra space inside the property for using a wheelchair.
The property must be the main home for at least one disabled person, either an adult or a child. It does not have to be the person responsible for paying the council tax.
Severely mentally impaired
People with certain severe mental impairments (SMI) are disregarded for council tax purposes. For council tax purposes, you are considered to have SMI if you have a severe impairment of intelligence and social functioning (however caused) that appears to be permanent. This includes where you are severely mentally impaired as a result of a degenerative brain disorder such as a stroke, Alzheimer’s disease or other forms of dementia. The household is billed as if this person was not living there. If the person with SMI lives alone, they do not need to pay council tax.
A client qualifies for this if they have a permanent and severe learning disability or mental health impairment and are in receipt of, or entitled to one of the following benefits:2Art 4(2) The Council Tax (Discounts) (Scotland) Consolidation and Amendment Order 2003 No.176; The Council Tax (Discounts) (Scotland) Amendment Order 2023 No.25
    •universal credit (UC) (the limited capability for work/limited capability for work and work-related activity element must be included);
    •employment and support allowance (ESA);
    •incapacity benefit or severe disability allowance;
    •AA/PADP;
    •CDP/DLA (middle or highest rate care component);
    •ADP/PIP (standard or enhanced rate of daily living component);
    •AFIP;
    •the disability element in working tax credit;
    •income support (IS) including a disability premium because of incapacity for work;
    •disablement pension for constant attendance at the increased rate;
    •disability working allowance;
    •unemployability supplement;
    •constant attendance allowance or unemployability allowance payable under the industrial injuries or war pension schemes.
The client may qualify if they are entitled to any of these benefits but do not receive them due to their age – eg, for being too old. The disregard can still be awarded if they meet the criteria. The SMI exemption can be backdated – check with the local authority as significant backdates can sometimes be obtained which can extinguish council tax arrears.
Empty and unfurnished property
If the client’s property is unoccupied, the local council may offer a discount for a limited amount of time if the client can prove:
    •they are in the process of renovating the property;
    •the property is for sale or rent.
The previous owner’s or occupier’s use of the property can affect the amount of the discount the client gets and the length of the discount.
If the property is unoccupied for more than 12 months, the council can charge a surcharge equal to double the normal rate of council tax.3The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013 No.45 The council has the discretion to:
    •grant no discount for empty homes;
    •increase the council tax by 100 per cent for certain properties which have been empty for one year or more.
 
1     s80(1)-(4) and (6)-(7) LGFA 1992; The Council Tax (Reductions for Disabilities) (Scotland) Regulations 1992 No.1335 »
2     Art 4(2) The Council Tax (Discounts) (Scotland) Consolidation and Amendment Order 2003 No.176; The Council Tax (Discounts) (Scotland) Amendment Order 2023 No.25 »
3     The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013 No.45 »
Council tax reduction scheme
The CTR scheme can reduce a client’s council tax bill if they have a low income. It is available to both homeowners and tenants in all council tax bands. The amount of CTR depends on:
    •the amount of council tax the client is liable to pay;
    •whether the working-age or pension-age rules apply;
    •how much income and capital the client and their partner have;
    •how many people are in the household, their circumstances and income.
CTR can reduce a bill to zero, but the client must still pay their water and sewerage charges. If the client has savings over £16,000, they will not be entitled to CTR unless they receive the guarantee credit of pension credit (PC).
Council tax valuation band
The owner of a property, or a person liable to pay council tax for it, can lodge a proposal to alter the council tax band in certain circumstances. The criteria can be found on the Scottish Assessors Association website.
You may want to use a rating agent to help you deal with issues such as appealing your rateable value or checking what the likely effect of any changes will be.
Before appointing a rating agent, make sure that you have a clear agreement on what they will do for you and what they will charge. Typically, tasks include valuing your premises to determine what the rateable value should be.
If there are grounds for a reduction, your agent can lodge an appeal and act as the point of contact with your local assessor. Remember that a reduction in your rateable value does not guarantee a reduction in your non-domestic rates bill.
Your agreement should clearly state what fees are payable to the agent and if these are affected if your rates bill is not reduced.
Members of the Royal Institution of Chartered Surveyors (RICS) or the Institute of Revenues, Rating and Valuation (IRRV) must follow a rating consultancy code of practice. You can contact RICS or one of their members for advice from a local chartered surveyor.
Appeals
The Local Taxation Chamber deals with appeals about council tax, water charges and non-domestic rates. It is part of the First-tier Tribunal for Scotland. It is a free service dealing with ‘first instance decisions’. However, you have to pay your own costs, such as travel and professional fees, should you ask a rating agent, or other person, to represent you. For council tax, there is a right to appeal to the tribunal against certain decisions, including liability, valuations, discounts, exemptions and council tax reduction.
Arrears procedures
Council tax is normally paid in monthly instalments. If a payment is missed, the local authority sends a reminder notice giving the client seven days to pay the outstanding amount.
This reminder notice lists:
    •the outstanding amount to be paid; and
    •if this amount is not paid within seven days, the right to pay in instalments is lost and the outstanding amount for the financial year must be paid.
If the outstanding amount is paid but a payment is missed later in the year, the next reminder notice will state that if a third payment is missed in the same financial year, they will lose the right to pay in instalments without a reminder notice being sent out.1s22(4) The Council Tax (Administration and Enforcement) (Scotland) Regulations 1992 No.1332
When a client loses the right to pay by instalments and fails to make payment of the outstanding amount for the financial year and the time limit for payment has lapsed, the local authority can apply to the sheriff court for a summary warrant.
The client cannot negotiate with the court before it is granted.
The amount due will have increased as there is an automatic penalty of 10 per cent if a summary warrant has been granted against the client.
The local authority must obtain a charge for payment before money can be recovered.
 
1     s22(4) The Council Tax (Administration and Enforcement) (Scotland) Regulations 1992 No.1332 »
Enforcement
There is no court hearing as such for enforcing council tax and water debts in Scotland. It is done by summary warrant procedure.1The Council Tax (Administration and Enforcement) (Scotland) Regulations 1992 No.1332 More detailed information on summary warrants is in Chapter 7.
Once a summary warrant has been granted, a charge for payment must be served and expired before certain diligence can be carried out. Charge for payments expire after 14 days if the debt remains unpaid.
Diligence available to sheriff officers for the recovery of unpaid council tax is:
    •arresting the client’s earnings;
    •freezing and taking money from the client’s bank accounts;
    •removing belongings from the client’s home and selling them;
    •sequestration.
Once a charge for payment has been issued, the client can apply for a time to pay order, which will allow them to make a repayment plan. It also stops sheriff officers from taking action against the client.
A statutory moratorium may also be used to stop enforcement after the summary warrant has been issued.
 
1     The Council Tax (Administration and Enforcement) (Scotland) Regulations 1992 No.1332  »
Third-party deductions
A third-party deduction scheme is used when a client has arrears and other methods to recover the debt have been tried. A threat of enforcement action must have been used before a third-party deduction can be applied for (unlike Water Direct (see here) which can be applied for without the threat of enforcement action). A fixed amount is deducted from the client’s benefits to clear the arrears.1Sch 9 SS(C&P) Regs
Third-party deductions can be made from UC, PC, IS, JSA or ESA. The amount is deducted from the client’s benefit and paid directly to the creditor until the debt is cleared. Where there is more than one debt, a maximum of three deductions can be taken at any one time inclusive of council tax arrears.
 
1     Sch 9 SS(C&P) Regs  »