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24 March, 2020 Open access

Government issues guidance to local authorities on £500 million council tax hardship fund

Guidance confirms 'strong expectation' that working-age recipients of council tax support will have annual council tax bill reduced by further £150 whether affected by coronavirus or not

The government has issued guidance to local authorities on the £500 million council tax hardship fund that was announced in Budget 2020.

Introducing the Council Tax: COVID-19 hardship fund 2020-21 – Local Authority Guidance today, the government says that the hardship fund will go to local authorities in England to enable them to reduce the 2020/2021 council tax bills of working-age people receiving local council tax support (LCTS), and that councils will also be able to use the funding to provide further discretionary support to vulnerable people through other support arrangements such as local welfare schemes. 

NB - the guidance includes that -

'The government’s strong expectation is that billing authorities will provide all recipients of working age LCTS during the financial year 2020-2021 with a further reduction in their annual council tax bill of £150, using their discretionary powers to reduce the liability of council tax payers outside of their formal LCTS scheme design.

Where a taxpayer’s liability for 2020-2021 is, following the application of council tax support, less than £150, then their liability would be reduced to nil. Where a taxpayer’s liability for 2020-2021 is nil, no reduction to the council tax bill will be available.

There should be no need for any recipient of LCTS to make a separate claim for a reduction under this scheme. The billing authority should assess who is eligible for support from the hardship fund and automatically rebill those council taxpayers.

Whether or not a taxpayer has been affected by COVID-19, directly or indirectly, should not be taken into account in assessing eligibility for this reduction'

For more information, see Government confirms £500 million hardship fund will provide council tax relief for vulnerable households from gov.uk