The method by which taxes are collected by local authorities on domestic properties is called council taxation. There are several ways to pay less council tax, for someone who is low on income. There are a few exemptions which can be availed by a person in need.

These are:

  • Getting discounts on council tax
  • Getting council tax reduction
  • Getting second adult rebate

This blog will discuss the applicability, rules and procedure for application, the amount of council tax deduction, and other details required by any taxpayer for his property tax payment. The blog discusses universal rules as well as varying rules depending on the localities and local councils.

Can I get a council tax reduction?

Yes, you can get a council tax reduction if you are low on income, or savings, or qualify under any other category provided by the local council. This mainly includes if you are the receiver of a pension scheme, or any other government scheme. You can also apply to get council tax reduction if you have a dependent staying with you.

Basis of Council Tax Payment

The amount of council tax that needs to be paid is dependent upon certain factors which are:

  • The overall amount to be paid which is set by the local council each year
  • The ‘Band’ assigned from A to H to the property. A home assigned band A will have lowest council tax charges, while a home assigned band H will have the highest charges.
  • The amount of tax to be paid also depends upon whether the person is eligible for a council tax reduction or not.
  • The place of residence of the claimant, since varied schemes are run by every councils
  • The circumstances of the claimant, such as income, number of children, their residence status etc.
  • The number of other dependants, or non-dependants living with the claimant at the time of application. This implies the children and adults living with the person.

Who Can Apply For Council tax Reduction

According to the Council Tax Reduction Scheme (CTRS), the following category of persons can claim a Council tax Reduction:

  • Those whose savings are less than £16,000. This reduction also becomes less if a person’s capital is more than £6,000, as compared to one having savings less than £6,000;
  • Those who are responsible for paying the Council tax Bill;
  • Those who have a low income as a result of benefits or work. This includes self-employed persons too;
  • Those who are unemployed;
  • Those who are unable to work due to illness or disability; or
  • Those who are retired from their job.

Every person except a pensioner or a ‘vulnerable’ has to pay at least 20% Council Tax. The savings limitation also includes the savings on one’s partner. This means that to claim a Council Tax Reduction, a person along with their partner must, combinedly, not have savings more than £16,000. A partner’s income and savings are included while calculating council tax Reduction. 

These ‘savings’ include savings in the form of shares, stocks or any other form of capital.

A person who is of working age receives less Council tax Reduction than a pensioner.

Any person besides the ones listed above can also apply to get council tax reduction, if they are experiencing financial difficulty, or are low on income. However, there is no surety whether they will get a reduction or not. Every person who makes a claim is not sure to be granted a CTR.

Vulnerables

The CTRS defines ‘vulnerables’ as those taxpayers who themselves, or their partner, or their child or any other dependent are entitled to certain state schemes within the Council Tax Support or any other tested benefit.

These schemes are:

  • Recipient of any enhanced disability premium,
  • Recipient of severe disability premium,
  • Recipient of a support component or employment and support allowance,
  • Recipient of Disability Living Allowance, or personal independence payment,
  • Recipient of any kind of payment for loss suffered due to war, such as disability or widow etc.
  • Recipient of armed forces payment
  • Single parent who is responsible for a dependent under the age of 5.

100% Council Tax Support

Only the following persons can get a 100% Council Tax Reduction, or Council Tax Support:

  • A person who receives old-age pension
  • A person eligible to receive a disability premium for himself or for his disabled child
  • A person eligible for an ‘employment support allowance’, who receives some benefit related to disability
  • A person receiving the premium of a carer
  • A person receiving other pensions such as those in effect due to war disablement, war widow or war widower
  • A person who is taking care of a dependent child under 6 years of age.

Payment (How Much Money Can I Get)

The amount received depends upon the person’s income and household circumstances. An awardee, however, does not get the actual payment. Rather, the taxation council reduces the amount of council tax to be paid.

The amount of reduction a person is eligible for can be calculated using the Council Tax Reduction calculator.

The council tax bill received by a person will showcase the amount of reduction they got. If any applicant qualified for a council tax reduction, and successfully received one, they would receive a revised council tax bill. This bill would specify the council tax reduction granted.

Also, in case the applicant does not qualify for a reduction, the taxation council sends them a letter or an email explaining the reason behind the refusal of their request.

Persons Not Eligible For Council tax Reduction

A person shall not get Council Tax Reduction, if the following conditions are applicable:

  • Any person who is seeking asylum, and has not yet been granted refugee status, or an indefinite or exceptional leave to reside in the United Kingdom cannot get a council tax reduction.
  • A person whose pre-condition to admission into the UK was that they would not have any recourse to public funds cannot claim the benefit of council tax reduction as a result of the existence of such a condition.
  • Any immigrant who has been sponsored by some other person, and has lived in the UK for less than five years cannot claim tax reduction. However, this condition does not apply to any such sponsored immigrant whose sponsor is dead.
  • Any person who is staying in the UK illegally, or whose stay permission has ended can, obviously, not claim reduction in council taxation.

How to Apply for CTR

The application for CTR can be made online. Depending upon the local council, this application can also be made through the telephone, if the council allows so.

For this person, an applicant needs to first of all, search for the correct local council. This can be done by searching the area’s postcode on the UK government website. After that they are led to the council tax support website of the particular area. The respective area councils provide specifications for council tax reduction in their locality and the applicant can proceed as per their requirements.

Rules Applicable for CTR

Different CTR rules apply for different categories of persons. This depends upon whether the applicant has reached the State Pension Age or not. Based upon this, there are two kinds of CTR rules.

These are:

  • Working age CTR rules
  • Pension age CTR rules

The working age CTR rules are applicable to:

  • Everyone who has not yet reached the state pension age, and
  • Every applicant or their partner who has reached the State Pension age but they get:
    • Universal Credit
    • Income-based Jobseeker’s Allowance
    • Income-based Employment and Support Allowance
    • Income Support

The pension age CTR rules are applicable to those who have reached the state pension age, that is, the earliest age at which a person can start receiving State Pension. The pension age CTR rules are a bit more lenient than the working age ones. 

Best Time to Apply for CTR

Typically, it is best to apply as soon as the taxpayer becomes eligible or aware of his eligibility to avail council tax reduction.

In case the taxpayer has prior knowledge of when they would become eligible to get CTR, they may also apply early. In this case the waiting period gets reduced or negligent, to get the reduction.

Otherwise, an application for CTR can be made upto 8 weeks before the first tax payment on such property. This situation occurs in cases where the property in question has been newly acquired.

Where, the taxpayer is already responsible for paying council tax, the application can be made upto 13 weeks prior to the eligibility to get council tax reduction.

Backdating the CTR Application

Where at the time of applying for the tax reduction, the applicant is already eligible to receive the CTR, they are allowed to backdate their application.

If the applicant is one on whom the working age CTR rules apply, they need to check their local council’s CTR policy. In this case, the applicant may ask for their CTR to be backdated if they provide the council with a good reason as to why they could not make the application at such an earlier date that they are now requesting.

If the applicant is one on whom the pension age CTR rules apply, they do not need to give any reason to the council for backdating their CTR. They are permitted to ask the local council for upto 3 months of backdating from the date of the application.

The request for backdating has to be made on the CTR application form itself. It might either be done through a request on a separate paper attached with the application, or filled in the ‘late application’ section, if available on the CTR form.

Proofs and Evidence to Get Council Tax Reduction

The applicant might be required to send evidence of his eligibility to get Council Tax Reduction by the local council. If the council’s website states so, the applicant needs to attach the required evidence. 

This evidence might be the applicant’s income, savings, pension scheme documents, residence proof, age proof, proof to show the status of dependents or partners etc.

If the applicant does not have the required evidence at hand, they may request the grant of more time from the council, to procure such proof. For this the applicant needs to write ‘evidence to follow’ on the CTR application form.

The local council, if not satisfied, or in case it requires, may also demand more evidence from the applicant. This needs to be sent within 1 month from such demand. In case the applicant is unable to get the required proof or needs more time for the same, it needs to be informed to the local council.

Council’s Decision and Further Action

The council, after getting all the required information and documents, typically makes a decision and informs the applicant in writing. If the decision is not clear, the applicant can ask the council to explain it to them within a period of 1 month from the decision. The response should be received within 14 days from the application.

If the applicant still cannot afford to pay the council tax, they may apply for a discretionary reduction, whether or not they are getting a council tax reduction. 

In case of a disagreement with the council’s decision, the applicant may write to the council to ask them to reconsider their decision. In case of further disagreement, the applicant may appeal against the decision to the Valuation Tribunal.

Conclusion 

This blog provided that any person with a low income is entitled to council tax reductions. A pensioner, or a person with dependants, or one with savings less than  £16,000 can apply for tax reduction. The value of reduction and rules thereof depend upon the category of applicant. The application procedure is to be carried through the local council of the place where the applicant lives.

Please feel free to comment on the content or ask any questions in the comment section below.

FAQs: can i get council tax reduction

What is the criteria for a reduction in council tax?

The requirement for reduction in council tax is low income, or recipient of pension schemes, less savings, or dependents.

Do I have to pay council tax on universal credit?

Yes. A holder of Universal Credit is not entitled to any help with council tax. The rules of working age CTR are applicable for pension age taxpayers if they are universal credit holders.

Is council tax reduction means tested?

Yes, the council tax reduction is means tested. The local council requires evidence in support of all provided information by the applicant such as income, savings, partner’s income etc.

Can I get a reduction in council tax if I am unemployed?

An unemployed person is eligible to apply for council tax reduction if they qualify for it. The amount of reduction depends upon the overall circumstances of the taxpayer, as seen fit by the local council.

Can you claim council tax reduction if you have savings?

Yes, if the savings of the applicant including that of their partner are less than 

£16,000. Also, the reduction granted is more if the savings are less than £6,000.

How much savings can I have for council tax benefit?

£16,000. This includes the savings of the applicant as well as their partner.

Citations 

https://www.ageuk.org.uk/information-advice/money-legal/income-tax/ways-to-reduce-council-tax/.
https://www.wycombe.gov.uk/pages/Council-tax/Help-with-council-tax/Council-tax-reduction.aspx.
https://www.edinburgh.gov.uk/counciltaxreduction.
https://www.gov.uk/state-pension-age.
https://www.citizensadvice.org.uk/housing/council-tax/check-if-you-can-pay-less-council-tax/.
https://glasgow.gov.uk/counciltaxreduction
https://www.gov.uk/apply-council-tax-reduction
https://m.luton.gov.uk/Page/Show/Benefits/Council-tax-reduction/Pages/default.aspx
https://benefits.luton.gov.uk/
https://www.aylesburyvaledc.gov.uk/council-tax-reduction-scheme
https://www.newham.gov.uk/council-tax/council-tax-reduction-ctr-disputes-appeals
https://www.northgate-nes.co.uk/pls/pwslive/f?p=NEBPWS:30:14447321970988:INITIALISE:

:30:APP_TRANSACTION_ACTIVE_IND:Y&cs=30aAgZGLzYPASUuDFwoVZUQogIdoS6xhXVUr-9TNvYSDGBVeZq8g3eM70tGMrJjw2ZEvNM0gphQK3UYZNFZnd2Q

https://www.westminster.gov.uk/council-tax/housing-benefit-and-council-tax-support
https://www.birmingham.gov.uk/info/20017/benefits_and_support/305/who_can_get_council_tax_support
https://www.eaststaffsbc.gov.uk/benefits-and-support/council-tax-reduction/can-i-get-a-reduction

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.