Council tax is a means-tested, mandatory tax that is due upon all adult residents in England, Scotland and Wales. Whether the residents are homeowners or tenants, working or unemployed, council tax remains payable; although there are certain personal and income-based circumstances that may earn individuals a discount on their yearly council tax bill. 

Who Is Exempt From Council Tax?

Should someone fall under any of the below categories, they will be considered as exempted from having to pay their council tax bills:

  • 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

The following link may be helpful to get more information on council tax exemption: Properties exempt from council tax – Council tax discounts, reductions and exemptions – Newham Council

To have a detailed understanding of council tax exemptions, we will explore the following areas in this article:

  • How To Get Council Tax Exemption on an Empty Property?
  • Are Occupied Properties Eligible For Council Tax Exemption?
  • Who Has To Pay Council Tax?
  • Who Is Eligible For Council Tax Benefits?
  • How Can I Get Council Tax Reduction On My Bill?
  • How Do I Know If I Am Entitled To An Income Based Council Tax Benefit?
  • What Happens When Someone Misses Their Council Tax Payments

How To Get Council Tax Exemption on an Empty Property?

If a new property is being constructed or an existing one is being refurbished, no council tax will be applicable for the duration of construction/home improvement. 

If a property is considered to be derelict; making it impossible to be inhabited, it will be exempted from council tax payment. However, the deterioration to the premises must be due to weather conditions, vandalism or rot. Additionally, the property must require structural refurbishments to be made liveable again.

If the owner of the property has died and it remains unoccupied, there is council tax due on the premises. This discount remains applicable even after probate has been attained. However, once 6 months have passed after the probate, council tax becomes applicable.

A temporary exemption of up to 6 weeks may be applicable in cases where the said property is unoccupied, unfurnished, and listed for sale.

Are Occupied Properties Eligible For Council Tax Exemption?

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 Has To Pay Council Tax?

Council tax bills are sent in the name of the person who is registered as the one ”liable” for such bills. This means that even if someone is living with their parents they are not responsible for making council tax payments if they are not considered to be liable for them by the local council office.

Council tax becomes payable upon those who fall under the hierarchy of liability; which looks something like this:

  • at the top of the hierarchy is the resident who owns either the leasehold or freehold of the property;
  • the second in line is a resident tenant;
  • this is followed by a resident who is not a tenant but lives on the property;
  • then comes any resident occupying the property;
  • and finally, the owner of the property while it remains unoccupied

However, unless the council tax bill is sent to your name, you are not liable to pay. 

Who Is Eligible For Council Tax Benefits?

To qualify for a council tax benefit certain criteria needs to be met. Following are some examples: 

  • Two adults who live in the same house qualify to pay full council tax; they may share the bill. However, if a single adult is 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. 

To learn more about benefits for individuals on a low income, click here Browse: Benefits and financial support if you’re on a low income – GOV.UK (www.gov.uk)

How Can I Get Council Tax Reduction On My Bill?

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.

To apply at your local council office, click here Apply for Council Tax Reduction – GOV.UK (www.gov.uk) 

How Do I Know If I Am Entitled To An Income Based Council Tax Benefit?

While an online benefits calculator Benefit Calculator (eden.gov.uk) may prove to be useful in calculating council tax, it may also help claimants know the criteria that may apply to their specific circumstances. These relate to certain demographic data including the number of children per household and the age bracket that claimants belong to.

A household without children:

Single individuals between the ages of 18-24 may be eligible for a council tax reduction of between £153 to £200; depending on the band they are eligible for (bands vary from A to D). Meanwhile, couples belonging to the same category will be eligible for a reduction of £243 to £306 in their council tax bills; depending on their assigned band.

As an individual’s age bracket increase from over 25 to over state pension age, eligibility for increased benefits also increases. Singles aged 25-state pension credit age may be eligible for a council tax reduction of between £169 to £216.

A household with children:

A single parent with a child qualifies for a £255 council tax benefit and as age brackets and bands increase the discount may rise up to £419.

On the other hand, a couple with a single child qualifies for a £329 council tax benefit and as age brackets and bands increase the discount may rise up to £561.

To learn more about age and income-based council tax bands, this link may be helpful Are you entitled to a council tax reduction? (eden.gov.uk)

What Happens When Someone Misses Their Council Tax Payments?

While it is best that individuals expecting to be unable to pay their council tax bills inform the local authorities in advance so that if there is any leverage possible from the council’s side, it may be extended in time. However, if a resident chooses to stop making payments, the following order of events would take place as a reaction from the council office:

Step 1: When a resident has misses their council tax payment for the first time, the council office sends them a reminder to clear their dues in the next 7 days. 

Step 2: If the resident continues to defer council tax payments twice in a row, a second reminder will be sent by the local council office, asking them to clear their dues. Within one financial year, there will only be 2 such reminders sent. The next communication will be a final notice from the council’s side, which serves as a legal demand for council tax debt to be cleared. All legal fees incurred for the debt recovery process will also be added to the council tax dues to be paid by the debtor.

Step 3: After the final notice, the council can now apply for a Liability Order to be drawn up upon the debtor. The next communication between that of the council and the debtor would be magistrate court summons which demands clearance of dues on an immediate basis or court appearance in the next 14 days. Should the resident clear their due before the court hearing, there will be no hearing or Liability Order.

Step 4: If council tax dues are not cleared by the debtor and the date of the court hearing arrives, a Liability Order will be issued in their name (irrespective of whether or not the debtor appears in court). Should the debtor be in any form of financial hardship or facing a severe health condition, they must seek advice from a reliable consultant or their local Citizens Advice bureau. Should the debtor’s circumstances qualify them for a council tax reduction or exemption, they may be able to defend themselves during the hearing.

Step 5: In case of a lack of defence from the debtor’s side, the Liability Order will now be issued. This authorises the council for the following:

  • deduction of dues from debtor’s wages through contact with the employer
  • deduction from any benefits that they may be receiving such as Income Support, Job Seeker’s Allowance, Pension Credit, Universal Credit, Employment and Support Allowance
  • visit by bailiff’s to seize valuables amounting to the council tax dues from the debtor’s property
  • court proceedings that usually lead to jail time of 3 months if they decide that the debtor has no valid reason not to make payments

Conclusion:

As a general rule, there is no exemption from council tax unless an individual caters to extremely specific criteria. In that case, claimants will have to inform their local councils through an application for exemption along with evidential documents to support their claim. Once their application is approved by the local council office and they have been informed of their status of exemption, only then should they consider themselves as being exempt. 

There may be situations in which individuals may be eligible for a reduction in their council tax bills, such as being the sole adult in a household or being a full-time student. In such cases, they must inform the local council office to learn more about the process of application for a council tax discount on their bills.

FAQs: Who Is Exempt From Council Tax?

Does everyone pay council tax?

Council tax is a mandatory tax levied upon all adult residents, whether they own or rent a property. It is based upon two adults sharing a household. In the case of spouses or partners, both of them jointly share the liability of paying council tax bills. However, certain conditions such as being a single adult in a household qualify you for a council tax reduction on your bill.

Do you pay council tax if you are on universal credit?

While universal credit is managed by the Department of Work and Pensions and does not directly connect to an individual’s council tax data which is managed by local councils, one may apply for a reduction on their council tax bills if they are on universal credit. 

Does council tax depend on the number of occupants?

Yes, council tax depends on the number of occupants of a property. A full council tax is based on two adults sharing a household. If there is a single adult occupant of a property, they are eligible for a 25 per cent discount on their council tax bill.

Do you pay more council tax for 2 adults?

Yes, a full council tax is applicable in the case of 2 adults sharing property as their main residence. 

Do you have to pay council tax if you are unemployed?

Yes, council tax is applicable on individuals even if they are unemployed; as long as they are adults. However, you may qualify for a council tax reduction if you are unemployed or on a low income.

References:

Council Tax: Who has to pay

Paying council tax

Council tax exemptions

Council Tax Reduction – Who can apply?

https://www.newham.gov.uk/council-tax/council-tax-discounts-reductions-exemptions/5
https://www.gov.uk/browse/benefits/low-income
https://www.gov.uk/apply-council-tax-reduction
https://eforms.eden.gov.uk/bencalc/
https://www.eden.gov.uk/council-tax-and-housing-benefit/council-tax-reduction/are-you-entitled-to-a-council-tax-reduction/
https://www.citizensadvice.org.uk/

What was missing from this post which could have made it better?