Council Tax Handbook

Geoff Parsons

• Publisher: Estates Gazette
• Year: 2017
• ISBN:
  9781135329778
• Edition: 1
• Topic: Law
• Subtopic: Commercial Law
• Index: Law

EG Council Tax Handbook is a timely publication. The text is easy to understand and very comprehensive. This volume helps to define the council tax in various contexts.

Part 1
Council Tax and its History

1 Council Tax — An Overview

Aim

To briefly introduce council tax in Great Britain and domestic rating in Northern Ireland

Objectives

• to briefly examine the nature of the government’s role and activities in local taxation
• to describe the role of the listing officer’s function of assessment
• to outline the way in which council tax is administered by billing authorities and others
• to describe the roles of the courts, tribunals and ombudsmen
• to briefly consider domestic rating in Northern Ireland

Introduction

Local taxation has been developed during the 400 years or so since the coming into force of the Poor Relief Act 1601 (the Statute of Elizabeth), itself a consolidation Act. For domestic property, it settled down as rating for most of the 20th century, based upon the rental value of the occupier’s residence. However, in the late 1980s rating was replaced by the community charge, which was itself quickly abandoned for council tax. Thus, a government consultation paper of 23 April 1991, A New Tax for Local Government, proposed a new tax to take the place of the community charge. As a result, council tax was introduced under the Local Government Finance Act 1992 and began to operate in Great Britain from 1 April 1993.

In broad terms council tax is paid to local councils by local people, mainly occupiers of dwellings, for the services that local authorities and other bodies provide.

The content of this chapter is intended as a framework for the more detailed treatment in later chapters. The chapter begins with a brief review of the legal framework, governmental roles and the general financial context for council tax. It concludes with a brief consideration of domestic rating in Northern Ireland.

Legal framework

Council tax is derived from Acts of parliament and statutory instruments — as interpreted in case law. Frequent references are made to the enactments and cases to identify the authority for various points of law and to direct the interested reader who wishes to go into greater detail. Council tax is in many ways similar to its predecessors — poor relief, domestic and non-domestic rating and community charge. Thus, the council tax enactments are sometimes interpreted by reference to case law that has emerged over the last 400 years or so. For example, Sir Anthony Earby’s Case (1633) determined that a person can only be assessed on assets owned within the parish, and in distress Semayne’s Case (1604) (1558–1774) All ER Rep 62, (1604) 5 Co Rep, a limited forcible entry by bailiffs — on the finding that “... the house of everyone is to him as his castle and fortress”, ie an “Englishman’s castle”.

Governmental functions

Central and devolved government

Central government has a relatively discrete set of functions which directly or indirectly affect the funding of local government. Devolved governments in the United Kingdom have similar functions within the framework established by central government. They are briefly described in Box 1.1.

Box 1.1 Functions of government in local taxation

Policy development	• developing policies for local taxation in the context of the socio-economic development of the economy
Law-making	• creating enactments for local taxation and for adopted central policies which affect local government funding directly or indirectly
Taxing	• raising funds by devising and operating a tax base which meets needs and accords with broadly acceptable principles of taxation (see Chapter 2)
Funding	• allocating funds to local government for their duties and discretionary work, particular programmes and projects that are required to support central policies

Local government functions

Local authorities have duties which involve delivering policies in the form of services, programmes and projects that have been established at national, devolved or regional levels — sometimes under policies of the European Union. At the same time they have discretionary powers to effect local policies.

As “billing authorities”, some of the local authorities, eg district councils, administer the council tax and council tax benefit regimes. They are defined by the Local Government Finance Act 1992 (the 1992 Act) and other enactments. The administration of council tax and council tax benefit is dealt with in detail in Part 4 of this volume.

Financial context for local taxation

This volume is being written at a time when a discussion on the future of local government funding is underway. At present it seems that the government does not intend to make substantial changes to council tax in England. Nevertheless, changes to local taxation are likely in the context of:

• a search for a 10-year strategy on the future of local government
• the balance of funding issue
• the need for additional sources for the local tax base
• the imposing of further “central” services and projects on local government.

Funding of local government is obtained locally and centrally in proportions of around 25% to 75% respectively. About £20 billion in council tax is collected by the local government authorities, ie they are called “billing authorities” in England and Wales and “levying authorities” in Scotland. The latter term is also used for fire services in Wales instead of “precepting authorities”. (In this volume they are generally referred to as “billing authorities’ unless the context is Scotland.) The money is for direct expenditure by the billing and other local bodies called “precepting authorities” (see section 39(1) and (2) of the 1992 Act).

Generally, the local bodies are free to fix the level of taxation, but there is a ministerial power to cap the amount any particular authority intends to charge (see p12). Each year additional funds, amounting to about £19 billion, come from the non-domestic (business) rates which the local charging bodies had previously remitted to the government — the amounts are redistributed on a capita basis according ...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Acknowledgments
• Preface
• Authors' Note
• Part 1 Council Tax and its History
• Part 2 Organisations and Structures
• Part 3 Property and Management
• Part 4 Administration and Recovery of Council Tax
• Part 5 Council Tax Payers
• Part 6 Valuation Lists and Assessment
• Part 7 Dispute Resolution
• Part 8 Additions or Alternatives to Council Tax
• Part 9 Appendices
• Part 10 Indexes