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Council Tax

What is this?

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 its 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 Occupancy (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 meaning that they may be deemed either as a single dwelling or a number of separate units complicating the matter of liability.

The NLA's position

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 reclassified a multiple units.

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

What we're doing

• Making representations to the Valuation office calling for improved guidance for local authorities
• Communicating with individual local authorities to promote standardisation

What's your view?
• Complete our online survey, and let us know what you think.

Read the NLA Bulletin for the latest news:
• Bulletin no.2 : April 2008 [ 250kb PDF file]
• Bulletin no.1 : December 2007 [ 195kb PDF file]