Minimum Income Floor and Council Tax Reduction

Hi

I wonder if anyone has come across this scenario or could help me with this:

For council tax reduction purposes my client’s local council uses a Minimum Income Floor to calculate earnings where the client is self employed and has a nil income. In these circumstances, after allowing for a start up period of 12 months,  earnings are calculated at being 35 hours x minimum wage.

She has submitted Self Assessment returns for at least 2 years showing nil income but WTC is being paid because, presumably, her work is considered genuine and effective. She is also in receipt of Carer’s Allowance and couldn’t therefore earn more than £110.00p/w nor work more than 16 hours. I have argued this point with the council but they won’t change their position. She has now suffered a liability order and is having to pay bailiffs £106.00pm or face a visit.

She has tried for a DP but they have refused.

Any thoughts?

Which Local Authority is it?

One approach could be to say that HMRC’s view is not binding on the council, and this is not gainful employment at all (e.g. it is a hobby from which she derives no income). Depending on how the scheme defines things, this may be a non-starter, and in any case may cause tax credit problems down the road.

Just from the perspective of benefit entitlement, I’m not sure what prevents her working more than 16 hours? In fact, to get WTC she needs to be doing at least 16 hours.

I guess the council would say that it is not their scheme which is preventing her from earning more than £110, it is the fact that she wants to stay within the CA rules (or else, it’s the fact that her work is entirely unprofitable?).

Going back to the hours rather than earnings, there may be an argument that a full-time carer just does not have time to do 30 hours work, and the scheme is therefore discriminatory. This could be brought up with councillors when the scheme is up for consultation at the start of each year. I don’t think the valuation tribunal could have jurisdiction on this, so any legal challenge may have to be judicial review.

As an aside, our own local scheme has a minimum income floor, normally set at 30 hours, but set at 16 hours for lone parents. There is no equivalent 16 hour floor for carers though (at least I don’t think there is - the local scheme as published unfortunately has some paragraphs missing at that part of the document). Other local schemes I’ve looked at don’t even have the lone parent concession. ... Postcode lottery.

She has tried for a DP but they have refused…dont forget she can appeal to the LA first as “aggreived” and the to a valuation tribunal and probably has a decent chance of having at least some of her arrears written off at the latter.

Hi,
Thanks for your thoughts - it’s Eastbourne Council, (but their scheme is mirrored by Lewes and Wealden).
I also work in Brighton where there is no minimum income floor,  like you say, postcode lottery.

Will look at the DP and VOA routes and keep you posted.

Seasons greetings