It is a common situation for tenants to dispute that they should be not paying Council Tax on a property. The usual basis of the argument is that a tenancy agreement or personal agreement they have made with the landlord means they should be paying it instead.
What is the correct decision for Council Tax purposes ?
Council Tax liability – the general situation
In the majority of cases Council Tax legislation (which cannot be overridden by an agreement with a landlord) determines who is liable for the Council Tax charge by reference to Section 6 of the Local Government Finance Act 1992 (LGFA92). This section of legislation is (with some specified exceptions) the primary determinant as to who is liable for the Council Tax charge. Some of these special cases are discussed in more depth below.
What if I’ve made an agreement for the landlord to pay Council Tax for me
You are free to make any agreement you wish for the landlord (or any 3rd party) to pay your Council Tax for you however this is purely a personal arrangement and does not affect the legal liability for Council Tax. The Local Authority will continue to pursue the person who falls liable under Council Tax legislation (usually the tenant) – this was confirmed in a 2013 Valuation Tribunal decision and a 2014 Valuation Tribunal decision.
The tenant would need to look at alternative action of their own to recover any monies from the landlord, possibly a small claims court case.
Valuation Tribunal decision on Council Tax paid as part of the rent
A recent Valuation Tribunal decision considered the situation where a tenant appealed against their Council Tax liability on the basis they had mad an agreement for a higher rent to be paid to the landlord and this would be inclusive of the Council Tax charge.
The Valuation Tribunal confirmed that they were bound to consider this type of liability dispute with reference to Section 6 of the Local Government Finance Act 1992 (LGFA92). This section of legislation is the primary determinant as to who is liable for the Council Tax charge. In this case the tenant held a tenancy agreement to occupy the entire property and was therefore found to fall liable under Section 6.
The Valuation Tribunal found that they have no powers to make a decision which is contrary to legislation. Any decision therefore had to find the tenant liable for the Council Tax and their appeal was dismissed on this basis. Although the tenant is free to make an agreement with the landlord for them to make payments on their behalf the tenant remains ultimately responsible as far as Council Tax legislation is concerned. It will be up to the tenant that any payment demands, and enforcement action, would be addressed.
Council Tax and non-resident landlords
Where a property is occupied then a non-resident landlord will be liable only in specific cases which are defined in the Council Tax (Liability for Owners) regulations 1992 (as amended). This liability cannot be changed solely by terms in a tenancy agreement.
Council Tax for Houses in Multiple Occupation
The liability for Houses in Multiple Occupation are defined in the Council Tax (Liability for Owners) regulations 1992 (as amended). This liability cannot be changed solely by additional terms in a tenancy agreement.
Council Tax liability after vacation
Tenants should also be aware of the recent Leeds v Broadley case. This case clarified points on what happens with Council Tax liability when vacating a property. Council Tax liability does not always cease simply because a person has vacated a property.