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CT liability
Having a mind block here (nothing new there then…)
Can you be liable for CT on two rented addresses simultaneously?
Client rented flat locally (Town A) with friend. Jointly liable for CT. Due to work commitments, client relocated to another town (Town B) on a temporary (but comparatively long term) basis. Client rented property in Town B and became liable for CT at that address too.
Basically, the issue is that whilst client was paying regular sum into friend’s bank account to cover her share of the CT liability (and rent) in Town A, client later discovered friend had absconded with the dosh and hadn’t paid the CT. Friend now AWOL. Client (who has since returned to Town A and who is now benefit-reliant due to serious health issues) has arrangement with LA for Town A to clear the CT debt but is struggling due to current financial circs. She’s provided LA with proof that she was transferring regular payments into the friend’s account along with a letter from the LA in Town B to confirm she was liable for CT in their area during the period in question but Town A LA has refused to waive recovery (or to make further efforts to track down the AWOL former friend in relation to remaining debt).
Should Town A treat client as liable for the CT at all, being as she was liable in Town B?
You can only be liable as a resident of one dwelling, but you can be liable as a non-resident owner if you have a current tenancy originally granted for six months or longer. In order to be a non-resident liable owner there would have to be no-one resident in the dwelling.
If both authorities have taken the view that she was resident in their area they cannot both be right but it might need an appeal to the VT to sort it out. Even then, having the VT decide which dwelling she is liable for as a resident doesn’t necessarily get her off the hook for the other one. She might be properly liable for both in the following ways:
Option 1:
- was resident at all times in Town A but tenancy in Town B was long enough to make her liable as non-resident owner. Town B has billed her in that capacity. As she is jointly liable in Town A, Town A is within its rights to go after her if she is the more convenient target
Option 2:
- became resident in Town B, but remained jointly liable as absent owner in Town A after the joint tenant moved out (while the joint tenant remained resident the liability should have rested solely with her). Again, Town A entitled to pursue her as more convenient target.
Something that could help her on the liable owner point is a strange CTB UT decision in which the UT judge decided that statutory tenancy coming into existence by operation of law at the end of a contractual AST was no longer the same 6m+ lease and therefore did not incur owner’s liability. In my view the benefits UT was overstepping its jurisdiction there and if the VT does not agree with the reasoning I don’t think it is in any way bound by it. But if the VT agrees with the reasoning it is helpful. If that were the case liability would pass up to the next higher interest - whoever your client’s landlord was. Case is here:
http://www.bailii.org/uk/cases/UKUT/AAC/2013/617.html
Brilliant- thanks as always HB Anorak for your fantastically comprehensive response.
I’m hoping friendly local councilor will intervene and persuade LA to either waive the remaining debt or pursue the former joint tenant anyway but it’s good to know we have a fall back position if necessary.
For interest, a recent High Court decision upheld the VT’s approach to the question of whether a tenant is an owner for C Tax purposes after the initial 6 month term:
... and rightsnet summaries of both cases if needed UKUT 617 (AAC) and Leeds City Council v Broadley
Thanks my dears- what a totally splendid resource this is!
I gather from the comments under this blog article http://nearlylegal.co.uk/2014/01/shorthold-tenancies-and-council-tax-liability/ that landlords use the hybrid tenancy form discussed in the Leeds case for the specific purpose of protecting themselves against CT liability when a tenant stops living in the accommodation without the landlord’s knowledge. The successful reliance on the hybrid tenancy in the Leeds case seems to have raised the profile of this issue in the landlord community and we can expect that more and more private landlords will adopt that format.
In the OP’s client’s case liability will depend on whether her dual liability fell within the original AST contract period of N months and, if not, whether she had a single agreement for N months followed by monthly/weekly periodic, or whether it was a bare N-month AST.
The lesson for tenants is if you no longer wish to live in the property you have three options:
- make sure someone else lives there
- give notice
- pay owner’s Council Tax, for which you cannot claim CTR.