Council tax is a community-based tax collected by local council authorities to provide services including but not limited to parks, community centres, garbage collection and care homes for the elderly. While the key focus of this blog post is on whether churches in the UK pay council tax, we will explore the topic in detail by discussing the different criteria for council tax exemption, council tax reduction as well as the eligibility criteria for council tax payments.

Do Churches Pay Council Tax In The UK?

No, churches do not pay council tax in the UK as being a place of worship exempts them from all forms of taxation under UK law.

By its definition, council tax is a community-based tax due upon domestic properties. Non-domestic properties (which includes churches) are charged with “Business Rates” which is said to be the equivalent of council tax for properties including the following:

  • factories
  • holiday rental homes or guest houses
  • offices
  • pubs
  • shops
  • warehouses

According to the Local Government Finance Act 1988, a “place of public religious worship” (which includes churches) is completely exempt from payment of taxes including business rates (or council tax). To meet this criterion, the church must fulfil the below conditions:

  • The church must belong to the Church of England or the Church in Wales; or
  • It must be certified and registered as a place of worship under the Places of Worship Registration Act 1855; or
  • The premises is a church hall, chapel hall or similar building that is used in connection with a place of worship.

Under this law, not only are churches but all places of worship that may belong to any religion are exempt from payment of taxes. In fact, if an office space is being used for the purpose of administrative work of the church, they are exempt from payment of tax as well.

The same law applies to properties that are agricultural land and buildings; including fish farms or buildings that are used for the training or welfare of disabled people.

However, should a church be registered as a charity and not be able to fulfil the essential criteria of a public place of religious worship, it will be considered for an 80 per cent tax relief on business rates.

Usually, empty properties in the UK are liable for council tax payments and in certain cases, an empty home premium. In case the empty proprty is a church building, it will be exempt from such payments as well.

Do Church Ministers Pay Council Tax?

No, members of the religious community, including Church Ministers do not have to pay council tax unless they own the property that they live in.

When council tax is calculated, the number of people living in a property are also accounted for. Members of religious communities; which includes ministers of churches are considered as “disregarded” in certain cases. This means that they are exempt from paying council tax in consideration of their religious service. 

In certain cases, they may be eligible for council tax discounts as long as their principal occupation included prayer, they have no income other than the occupational pension they receive (they may have capital of their own) and they rely on the community for meeting material needs.

Who Is Exempt From Council Tax Payments?

To be considered for council tax exemption, the individual must cater to any of the following conditions:

  • the resident lives in a care home and not their own home
  • the resident is under hospital care
  • the resident is living somewhere else; providing care to another person
  • the resident is in the armed forces 
  • the resident is in prison (not for non-payment of council tax bills)
  • all the residents are full-time students
  • all the residents are under 18 years of age
  • all the residents are mentally impaired

Then there may be situations that are property-centric; making the premises ineligible for council tax to be applied. These may include:

  • the property is used for charity work
  • it is an annexe to the main property
  • the property is repossessed
  • it has been purchased to be demolished

Are Occupied Properties Exempt From Council Tax?

An occupied property may be exempted from council tax payments under the following conditions:

  • the visiting accommodation of a member of the armed forces
  • the Ministry of Defence barracks
  • part of another property; residents of whom are elderly or disabled relatives of those living in the said premises
  • student hall of residence 
  • the residents are foreign diplomats

Who Can Get Council Tax Reduction?

Basic criteria for council tax reduction is based upon an individual’s age, residential status, and income level. To be eligible for a reduction on ones’ council tax bill, the claimant must either be on low income or claim benefits through a government-supported program.

The amount of council tax reduction that they qualify for will depend on the following factors:

  • The area in which they live as each local council has its scheme
  • Claimant’s circumstances; including their income, number of children, any other benefits that may be receiving
  • Total household income; this includes the joint incomes and saving of couples
  • If children are living in the house
  • Number of other adults in the house

It must be noted here that since the rates of council tax bills are dependant upon local council schemes, they may vary from council to council. Furthermore, the eligibility for council tax benefit and the amount of benefit that may be extended to applicants is also at the discretion of local council schemes.

Who Is Eligible For Council Tax Reduction?

To qualify for a council tax benefit the general rule is that individuals above the age of 18 are eligible to pay as long as they own or rent a home. However, certain criteria need to be met to qualify for council tax benefits as well as the amount of benefit that one may qualify for.

Two adults who live in the same house qualify to pay full council tax; they may share the bill. However, if there is a single adult living in a property by themselves, they may be eligible for a 25 per cent reduction in the bill irrespective of the fact whether they are part-time employees or full-time ones. The same rule applies if an adult is sharing the premises with one or more individuals under the age of 18 years.

A 50 per cent council tax benefit becomes applicable if all the residents of the household are under 18 years of age. Complete exemption or a 100 per cent discount is applicable if all the residents of the said premises are full-time students.

Individuals on a low income or those receiving other forms of public support qualify for a 100 per cent discount on their council tax bills. To apply for this exemption, claimants may be homeowners or tenants; they may either be unemployed or working. Variation in homeowner and employment does not cancel out eligibility for council tax benefit; however, the amount that one is eligible for may vary.

What Is Council Tax?

First introduced in 1993, Council Tax is a bill levied upon properties in England, Wales and Scotland and is paid by owners or tenants to their local council office. It is essential that the resident(s) of the said properties are above the age of 18 and are not full-time students. They may be working, unemployed or studying part-time.

The local council office maintains a list of all the houses in their area. Once the Valuation Office Agency (VOA) shares their value assessment, council tax bills for the next year are prepared and sent out to residents on April 1st each year. 

Payments are required in 10 monthly instalments up to the month of January of the next year; with February and March being tax-free months. However, residents have the right to opt for making full payment in advance and thus qualify for a discount as per their local council’s discretion.

Conclusion:

Since churches are public places of religious worship, they are exempt from council tax or business rates under UK law. The same rule applies to all public places of religious worship in the UK. Council tax is a domestic property tax; to be exempt from which either the owner must fulfil the exemption criteria or the property must be deemed exempt as per the decision of the local council authorities. Non-domestic properties are due to pay a tax called business rates; which is similar in nature to a council tax. However, churches or properties used for agricultural land and buildings as well as for the training or welfare of disabled people are all exempt.

FAQs: Do Churches Pay Council Tax In The UK?

Do ministers of religion have to pay Council Tax?

No, ministers of religion are exempt from council tax payments and are considered as “disregarded” by the valuation agency while assessing a property for council tax estimates. Similarly, an unoccupied property reserved for a minister is also exempt from empty properties tax.

Who is exempt from paying Council Tax in England?

Anyone under the age of 18, full-time students, student nurses and some apprentices and trainees are exempt from council tax in England. Also, if a resident lives in a care home, under hospital care, living somewhere else to provide care, serving the armed forces, in prison (not for non-payment of council tax bills) or is mentally impaired, they will be exempt from council tax as well.

Do religious organisations pay tax UK?

Religious organisations that are registered with the Church of England or the Church in Wales are exempt from taxes according to the Local Government Finance Act 1988. However religious organisations registered as charities receive an 80 per cent discount on taxes.

Is there a church tax in the UK?

No, there is no church tax in the UK. According to the Local Government Finance Act 1988, a “place of public religious worship” which includes churches is completely exempt from payment of taxes.

Do priests pay tax in the UK?

Priests (and other religious members of the community) pay taxes only if they withdraw a salary. Non-salaried members of the religious community are not required to pay taxes.

References:

Council Tax: Who has to pay

Paying council tax

Council tax exemptions

Council Tax Reduction – Who can apply?

People exempt – or disregarded – from paying council tax – Council tax discounts, reductions and exemptions – Newham Council 

Exemption Class H – Held for occupation by a minister of religion

EIM60014 – Employment Income Manual – HMRC internal manual – GOV.UK

Guidance for clergy claiming Council tax Discount on second home | The Church of England

Excepted charities – GOV.UK

Business rates relief: Exempted buildings and empty buildings relief – GOV.UK

Places of public religious worship – Charity Tax Group

Business rates – Property wholly or mainly used for charitable purposes – Charity Tax Group

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