Council Tax

Council Tax was introduced in 1993 as a replacement for the Community Charge ("Poll Tax"). It is the principle form of local government taxation in England, Scotland and Wales.

Under Council Tax rules all dwellings are allotted a band based on their value which determines the level of Tax due. For the majority of residential let property the Council Tax liability falls to the tenant, however in regard to Houses in Multiple Occupation (HMO)  landlords are liable and Council Tax can become a significant issue.

Depending on a number of conditions, local authorities differ in how they classify HMOs. This means that HMOs may be deemed either as a single dwelling or a number of separate units. This complicates the matter of liability for landlords.

Council tax banding and the way some local authorities are administering the tax, are creating anomalies. In some parts of the country a landlord can claim exemption if their property is unfurnished while elsewhere they cannot. In some areas buildings that had previously been treated for council tax purposes as single units (for example HMOs) have been disaggregated and reclassified as multiple units.

The NLA wishes HMRC and the Valuation Office Agency to examine this issue and provide guidance to local authorities requiring them to take a consistent approach in the way they administer this tax. In particular, council tax benefit and liability should be harmonised.

As such, we are making representations to the Valuation Office Agency calling for improved guidance for local authorities and communicating with individual local authorities to promote harmonisation.