Working away from home – your Council Tax

By | October 17, 2016

 

Renting out a roomIt is becoming more and more popular for people to be renting rooms and properties whilst working away from home.

Many people however are not aware of the council tax implications which may arise from this and lose out financially.

Working away and renting a room

‘Sole or main residence’ is a Council Tax concept. A simple guide would be to consider the place where an outside observer would say a person lived if they looked at their situation.

If you have your ‘sole or main residence’ in a property then you must be taken in to account as being resident for Council Tax purposes. This means that, unless you can be disregarded (e.g. you are a full-time student), any discounts or exemptions received are likely to be reduced.

If you do not have your ‘sole or main residence’ in the property then you will not be taken in to account as living in the property for Council Tax purposes – in this case you must have a property elsewhere which is your ‘sole or main residence’ (e.g. you are someone who lodges during the week whilst working away). This situation is quite common and discounts are often removed (wrongly) because of it – see our case study.

Working away and renting a house

‘Sole or main residence’ is a Council Tax concept. A simple guide would be to consider the place where an outside observer would say a person lived if they looked at their situation.

If you have your ‘sole or main residence’ in a property that you rent then you are taken in to account as being resident for Council Tax purposes. This means that you would be liable for the Council Tax charge on the property. You would need to inform the local authority of any other property that you own or rent as to where your ‘sole or main residence’  is.

If you do not have your ‘sole or main residence’ in the property then you will not be taken in to account as living in the property for Council Tax purposes – in this case you must have a property elsewhere which is your ‘sole or main residence’ (e.g. you are someone who lodges during the week whilst working away).

Where a property is not a persons ‘sole or main residence’ then Council Tax charge defaults to the ‘owner’. This is not always the legal owner, Council Tax has its own definition of owner.

If you signed a tenancy for 6 months or more and it’s still within the fixed period – you are liable as the ‘owner’.
If you signed a tenancy for 6 months or more and it’s not within the fixed period but has defaulted to a periodic tenancy – you are not liable as the ‘owner’.
If you signed a tenancy for 6 months or more and it’s not within the fixed period but has continued as a contractual tenancy – you are liable as the ‘owner’.

(As of October 2016 the above situations regarding liability are correct but may change pending a current ongoing appeal case)

Where a property is not the ‘sole or main residence’ of an individual then a charge will be levied by the local authority depending on whether it is furnished or unfurnished.

Job related dwellings

There are certain situations where a person is required to occupy a property for their work purposes – this could be because you have to live on the premises or it is required for security purposes, for example.

In these situations, assuming you are the liable party (see paragraph above) for both properties you may be entitled to a 50% reduction on the property which is your ‘second home’ – i.e not the one which is your ‘sole or main residence’.

Informing the local authority

Regardless of the situation in which the person becomes resident it is the liable person must inform the local authority. Failure to do may result in a fraud investigation if a name comes up during verification checks.

It is also the liable person who has the responsibility to ensure that the local authority is kept updated. This includes anything which may increase or decrease eligibility to a discount or exemption.

Assistance from LGFA92

Good quality help with your Council Tax dispute can be hard to come across – there’s a lack of independent, expert, places where you can get the help you need however LGFA92 are here to change that. See how we can help today

Contact us today. Email us at info@lgfa92.co.uk, Call our Council Tax helpline on 0191 6451118.

This article is solely the view of LGFA92, the Council Tax experts, based on our interpretation of legislation. Your local authority is free to dispute this view. A binding decision may require the intervention of a valuation tribunal.

 

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