Student exemptions and Council Tax – should they be charged ?

By | September 6, 2016

student exemptionsOne of the recurring issues that often comes up in discussion, especially at this time of year, is whether full time students should be exempt from Council Tax or not. It’s becoming even more of a common question as budget cuts start to bite and local authorities are looking to maximise every penny of income.

What happens now with student exemptions ?

Under existing Council Tax legislation a residential dwelling which is occupied solely by full time students would be exempt for Council Tax purposes under Class N of the Council Tax (exempt dwellings) Order 1992.  It is also the case that dwellings which are regarded as purpose built student dwellings, such as Halls of Residence, are exempt under Class M of the Council Tax (exempt dwellings) Order 1992.

The average Band D Council Tax charge in England & Wales for the current year is £1,530. For a city with a large student base this means that hundreds, if not thousands, of dwellings are exempt from Council Tax (Liverpool alone has around 9,000) and not therefore directly providing funding to the local authority whilst, at the same point, they are in receipt of services.

What could change with student exemptions ?

Local authorities do have some delegated powers in respect of Council Tax however the power to vary liability (the person responsible for paying) or entitlement to the exemption is not a delegated power.  The option being requested by Liverpool City Council is for a change in legislation which allows property which houses students to be made liable for Business Rates rather than remaining under Council Tax.

Any changes would need to be made by way of legislation but to move student properties from Council Tax and in to Business Rates would require a major re-write of the existing legislation and break the obvious barrier between residential and non-residential properties.

Over recent years the general tendency has been to delegate powers to the local authority to allow alteration of certain aspects of Council Tax charge within an allowed range. This would probably be the most agreeable route to local authorities as they could then look at the reduction offered to students on a local basis and tailor the charge on each dwelling appropriately . It possible however that the properties could also be changed to pay Business Rates.

Advice & 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 [email protected], 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.