Local Government: Council Tax

House of Lords written question – answered at on 15 March 2007.

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Photo of Lord Hanningfield Lord Hanningfield Deputy Chief Whip, Whips, Shadow Minister, Transport, Shadow Minister, Communities and Local Government

asked Her Majesty's Government:

What would be the process for extending the current 25 per cent discount on council tax to other designated groups in a two-tier council area.

Photo of Baroness Andrews Baroness Andrews Parliamentary Under-Secretary, Department for Communities and Local Government, Parliamentary Under-Secretary (Department for Communities and Local Government)

Under Section 11(1) and (3) of the Local Government Finance Act 1992 ("the 1992 Act"), a 25 per cent discount ("the discount") applies in respect of a chargeable dwelling and a particular day if on that day:

there is only one resident of the dwelling and that person does not fall to be disregarded for the purposes of the discount; orthere are two or more residents of the dwelling and each of them except one falls to be disregarded for those purposes.

Schedule 1 to the 1992 Act has effect for determining who must be disregarded and paragraph 11 of that schedule provides that a person must be disregarded on a particular day if on that day:

the person falls within such description as may be prescribed by the Secretary of State by regulations; andsuch conditions as may be prescribed by the regulations are fulfilled.

Depending on the precise circumstances, it may be possible to use the power in paragraph 11 to extend the discount. If that is not possible, any extension in the operation of the discount is likely to require primary legislation.

There are also other powers in the 1992 Act which it may be possible to use to achieve a very similar result. For example, under Section 13 of the 1992 Act the Secretary of State may by regulations prescribe conditions which, if met, would result in a person liable to council tax paying a reduced amount of tax. In addition, under Section 13A of the 1992 Act, a billing authority may reduce to such extent as it sees fit the amount of council tax which a person is liable to pay in respect of a chargeable dwelling situated in the authority's area. The power in Section 13A may be exercised in relation to particular cases, or by determining a class of case in which liability is to be reduced.

Any changes to the present council tax system will be made only in the light of the recommendations of the final report of Sir Michael Lyons' independent inquiry, which will be published around the time of the Budget.

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