Our council has always made properties which are only occupied by people who are exempt from Council Tax due to Severe Mental Impairment 100% exempt from the tax. It is now saying that where these properties are Houses of Multiple Occupation, the landlord is liable for the Council Tax, albeit with a 50% discount because all of the occupants are exempt under SMI. The landlords are going to want to recoup this money from somewhere, ie the tenants! But the tenants are supposed to be exempt!

Has anyone else come across this situation?

Are there any alternatives to letting the landlords put the rent up to cover the cost of the extra Council Tax?

Have a look at the following

http://www.rightsnet.org.uk/dc/dcboard.php?az=show_topic&forum=102&topic_id=6206&mode=full

I'm quite happy to say that we need go no further than the Local Government and Finance Act 1992 Reg 4, Chargeable Dwellings.

. — (1) Council tax shall be payable in respect of any dwelling which is not an exempt dwelling

That leads on to the Council Tax (Exempt Dwellings) Order 1992 Class U (inseteted by way of SI in 1999.)

“Class U: (1) a dwelling occupied only–
(a) by one or more severely mentally impaired persons, where, but for
this Order, either such a person, or a relevant person, would be liable
to pay the council tax; or
(b) by one or more severely mentally impaired persons, together with one
or more relevant persons.

CPAG have happily confirmed the situation and no charge exists as the dwelling falls outside of those to which a charge applies. i.e. No need to consider The Council Tax (Liability for Owners) Regs 1992, or Barnes V Sheffield Or (chuck) Norris and (chuck) Norris V Birmingham CC.