This blog answers the question “How Far Can the Council Backdate Council Tax?” The absolute maximum (theoretically) is up to 1993 when the council tax was first introduced (which is a period of 29 years). This is a backdating of council tax overpayments for a pension age claimant who was also at or above 65 years of age on this date in 1993. Council tax credits are practically backdated for shorter periods of time such as 1 month, 3 months, 6 months etc because it is unlikely that HMRC has made errors on your council tax, dating back years into the past..
How Far Can the Council Backdate Council Tax?
For taxpayers who work, council tax can be backdated to 1 month. For Pensioners, Council Tax can be backdated to 3 months before the claim was filed
Council tax overpayments can be backdated to 1993. The claim needs to be a valid reason such as illness, being misinformed by an official organization against this claim or not being aware of a recent change in the law of backdating council tax.
If this premise for claiming overpayments is accepted (even if it is a period of 10 years or so) the tax benefit can be recovered. If a person’s income increases from the last fiscal year and this change is unrecorded, they will now be getting an oversized council tax reduction.
Why does council tax need to be backdated?
Errors in values of annual income and other changes of circumstances call for backdating of council tax. If someone starts a new job, their council tax reduction calculation becomes entitled to be revised and will be adjusted as an overpayment. Underpayments occur when a claimant has been paid less than their tax credit entitlement.
The reason for this might be a lower annual income figure used to calculate tax credit, as this value is taken from the previous tax year. This underpayment can be adjusted. By informing Her Majesty’s Revenue and Customs of this discrepancy in income, the tax credit can now be based on the lower current figure (receipts of evidence need to be provided)
If you work
In the case of working-age claimants, council tax can only be backdated to a period of one month before the claim was made.
If you are a pensioner
Pensioners will have their claim backdated to a period of 3 months before the date of filing the benefit claim. Their case is a special one that doesn’t require much detailed proof as to why this claim wasn’t made earlier.
The tax year runs from the 5th of April of one year to the 6th of April of the next year so changes to the tax award will be recorded after the 5th and not at any time within the year. This annual system creates errors in recording income, occupancy, and other changes in individual circumstances.
What are the council tax backdating rules for claimants aged under 60 years?
The Council tax reduction entitlement for claimants under 60 years of age is applied on the first Monday after the appeal is submitted. Council tax can be backdated for upto 1 month.
What are the council tax backdating rules for claimants aged 60 and older?
For council taxpayers aged 60 years and above, council tax reduction and housing benefit payments will automatically be backdated to an earlier date. Council tax can be backdated for upto 3 months before your claim was submitted or in some cases all the way back to your partner’s 60th birthday. So you may be in your late 60’s and have your council tax backdated for more than 5 or 6 years.
You may be asked for proof of your income, savings and rent while submitting a backdating application.
How is the Limitations Act 1980 used to limit backdating?
Under Limitations Act 1980 Part 2 section 9 an action based on tort cannot be brought more than 6 years after its cause of action is accrued. So any council tax which has been over (or under) charged beyond the last 6 years cannot be rectified or refunded by the council. If your council tax reduction circumstances indicated that you should have been billed a lower annual amount for your council tax 7 or 8 years ago and you wish to have this amount backdated the Limitations Act 1980 protects your council from being held liable for the error.
Your Council Tax backdating applications can only refer to overbilled council tax for the past 6 years by providing authentic evidence of your circumstances being in line for getting a council tax reduction (which was not applied).
What are the local council tax backdating schemes used for backdating council tax in England?
All local authorities are required to submit a scheme for their council tax backdating plans offered to taxpayers. This scheme includes details of the people who can avail these backtracking scheme, the types and amounts of council tax refunds they offer and how to apply for the scheme. Under the council tax reduction scheme (England )Regulations 2012 all regional councils are required to make council tax backdating reductions to pensioners only.
Other claimants of council tax backdating such as couples, full time students, working age council tax payers or council taxpayers registered as disabled can only be granted a refund from the previous month and this also only if there circumstances, income savings and rent situation clearly indicates that HMRC has made a mistake in calculating the council tax entitlement.
What level of council tax reduction is available for severely mentally impaired people and can it be backdated?
Council tax reduction for living with severely mentally impaired (SMI) occupants ranges from a 25%-100% discount on your council tax bill. This council tax reduction can also be backdated for upto 6 months back. To be eligible to receive this council tax reduction (and also for a council tax rebate for billing errors) you will need to provide the following information:
- A certificate from a certified medical professional saying that the person is severely mentally impaired.
- Prove that you are qualified for receiving certain disability benefits such as Incapacity Benefit (Short term or long term), Employment and Support Allowance, Attendance Allowance, Disability Living Allowance ( highest or middle rate care component), Personal Independence Payment ( daily living component), Working Tax Credit (Disability Element), Armed Forces Independence Payment, Income Support (with a disability premium) or the Constant Attendance Allowance.
Under the Local Government Finance Act 1992 a person is identified as severely mentally impaired if he or she has suffered long-lasting damage to social or intelligence-related cognitive functions. Such long-lasting mental conditions include:
There are 3 types of conditions for getting the severely mentally impaired council tax reduction.
In the first condition if you are living with just one person who is severely mentally impaired and :
- He or she is the only legal-age adult in the household
- Other residents of the household can be disregarded
You will be able to claim a 25% discount on your (annual) council tax bill.
In the second condition, if you yourself are severely mentally impaired and other occupants of your property can be “disregarded”, you will be able to claim a 50% discount on your council tax bill.
For being disregarded as occupants of a household in this case you must be one of the following:
- Aged under 18 years
- Be registered as a foreign ambassador or a diplomat
- Foreign language translators registered with the British Council
- A nursing school student
- Receiving funding from the Education and Skills funding agency (under 25 years of age)
- A part of certain specific apprenticeship schemes
- A care provider for someone other than your spouse or civil partner
In the third condition, you are yourself severely mentally impaired and:
- All the other adults living on your property are also declared as severely mentally impaired
- You live alone on your property
In the 3rd mentioned Severely Mentally Impaired situation you are eligible to claim a 100% reduction on your council tax bill.
The blog post addressed the question “What is the Maximum Time Period To Which The Council can Backdate Council Tax?” The maximum limit for backdating council tax benefit can theoretically date from after it was first passed into law by the Local Government Finance Act 1992. Since this time citizens of the UK are subject to council tax regulations and benefits.
But Council tax is actually only backdated for upto 1 month for most council tax payers except for pensioners, who can be granted backdating requests for more than 6 months under certain conditions.HMRC usually doesn’t make mistakes on your council tax entitlement and carefully formulates all your relevant income savings and other financial information before sending out the bill.
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Frequently Asked Questions (FAQs) : What Is The Maximum Time Period To Which The Council Can Backdate Council Tax?
Can I get benefits before I have moved into a new home?
If you have to pay rent for the period between when your tenancy started and when you actually moved in you can qualify for tax benefit but the delay in moving must have been because of one of these 3 reasons:
- You cannot move into your new home until changes are met to match the disability needs of a person in your family
- You are waiting for a social fund payment from the Department of Work and Pensions and you have a child aged 5 or under or you are a pensioner or you receive a disability income
- You were in a nursing home, hospital or residential care when you began renting the property
What is an Early Years Adjustment Tax refund?
An early years adjustment tax refund is the compensation payment made to make amends for tax calculation errors or misjudgements by HMRC, the Department for Work and Pensions or the Department for Inland Revenue on your tax returns.
In cases of overpayment, you will need to provide details on your opinion of how and why the error on your income tax or another type of tax return statement has been committed. This challenge should not dispute the authenticity of any factual data used by the government organization.
The early years adjustment tax repayment is paid out even at the expiry of the legal time limit for getting reimbursement if the overpayment has been made due to an error by a government department.
A mandatory requirement for availing this refund is the absence of any disagreements on the facts in attributing the mistake to the officials of HMRC or any other government agency. The Taxes Management Act 1970 states that a claim regarding refunds can only be made within 4 tax years of the error.
In which conditions am I entitled to request an income tax refund?
You could be entitled to request an income tax refund for numerous reasons including:
- You were only working during your summer holidays as a student
- You have more than one job and your employer has therefore applied the incorrect tax code to your HMRC returns
- You might be on a pension income and paying excessive amounts of tax
- You might also have overpaid tax on your redundancy pay or on income from abroad
- You could be self employed and see your yearly income fluctuate regularly