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4 April, 2022 Open access

DLUHC sets out steps it is taking to prevent the Homes for Ukraine scheme from affecting a sponsor’s council tax status in England

Department confirms that it is laying new legislation to ensure that all discounts and exemptions will be protected

The Department for Levelling Up, Housing & Communities (DLUHC) has set out the steps it is taking to prevent the Homes for Ukraine scheme from affecting a sponsor's council tax status in England.

When announcing the launch of the scheme on 14 March 2022, the Secretary of State Michael Gove assured prospective sponsors that payments made will be 'tax free, and will not affect benefit entitlement nor council tax status'.

Providing details of the legislative mechanism to ensure that the commitment will be met in relation to council tax, the DLUHC says that it will lay regulations on 11 April 2022 to - 

NB - the letter highlights however that the regulations will not provide for a general exemption for dwellings occupied by people arriving under the Homes for Ukraine or other schemes.

In respect of council tax support, the DLUHC advises that the Local Government Finance Act 1992 (the 1992 Act) does not permit in-year changes to billing authorities’ local council tax support (LCTS) schemes, and it is therefore not possible to enable the £350 monthly thank you payment and any potential non-dependant deductions to be disregarded when calculating an LCTS reduction for the host household. However, in order to protect a sponsor's council tax reduction, the Department says it will - 

'... encourage billing authorities to offset any Homes for Ukraine-related changes in council tax support through discretionary discounts made under s13A(1)(c) of the 1992 Act. To facilitate this, we will shortly revoke the Collection Fund (Council Tax reductions) (England) Directions 2013 and replace them with directions specifying that where a discount is provided to offset an increase in liability resulting from a Homes for Ukraine thank you payment or non-dependant deduction no billing authority payment need be made into the collection fund.'

For more information, see 8/2022: Council Tax information letter - 1 April 2022 from gov.uk