POOREST PAY THE HIGHEST PRICE

FIRST PUBLISHED BY: THE GUARDIAN 

POLL TAX DEMONSTRATIONS IN 1990 HELPED KILL OFF AN UNFAIR SYSTEM. BUT ITS REPLACEMENT CREATED A NEW SET OF INEQUALITIES.

A campaign was launched this week to change the Council Tax system to make it fairer to low income families, who pay a far higher share of their income than richer households. Council Tax, as it is currently constituted, is the most unfair and regressive of Britain's major taxes, says the new Centre for Council Tax Reform (CCTR), set up by the left-of-centre independent think-tank, the New Policy Institute, to win support for a fairer, more democratic, tax.

It is the largest direct tax for low income families, says the CCTR, with the poorest one-third of British households paying more in Council Tax than income tax. Even though many low income families pay nothing as a result of Council Tax benefit, on average households in this group pay between £500 and £600 in Council Tax each year.

The tax is "deeply regressive" because households living in the most expensive properties rated in the top Council Tax band pay only three time more than those in the cheapest, bottom band properties, even though variations in house prices and family incomes are many times greater. The result is that, even taking into account Council Tax benefit, Council Tax payments average at over 6% of disposable income for the poorest third, while for the richest third the figure is around 3%. "Council Tax is an unfair tax, but there's nothing wrong with it that straightforward reform can't put right," says the centre's coordinator Andrew Harrop. "It hits hard at some of Britain's poorest families and it does not treat like with like because Council Tax valuations are so out of date.

"The solution is both revaluation and comprehensive reform to increase the gap between top and bottom rates of Council Tax. Revaluation may have to wait for legislation, but making a start on change would be easy. There is nothing to stop ministers simply increasing the gap between the highest and lowest rates of Council Tax in time for 2002 bills which land on our doormats next April. Council Tax reform could be a quick and efficient way to redistribute income from some of Britain's richest families to some of the poorest, without breaking Labour's election pledges on income tax," he says.

But critics say the idea of simply upping the amount of Council Tax paid by families living in high-priced properties and reducing that paid by families in low-value homes could unfairly penalise people who work and, therefore, have to live in property "hotspots" such as London, where house values are high and virtually all homes fall into the top Council Tax bands. "The jury is still out on whether the government needs to do something specific about places like London and the South east," says Mr Harrop. "Research is needed into whether the income variants are in fact smaller than the house value variants. But owning an expensive property means you have a valuable asset and, in principle, it is right to tax assets of that value."

The CCTR, supported in its work by local authorities through the Local Government Information Unit and by the public service union PCS, has set up a website www.counciltaxreform.org to keep people informed on Council Tax and the state of the Council Tax debate. The centre is not alone in campaigning for Council Tax reform. In the last year the Commission on Taxation and Citizenship, the Local Government Association and Unison have all called for reform. And earlier this year 65 MPs signed a motion calling for change.

How Council Tax works

Council Tax is levied according to the value of the home each household occupies and is payable by households who rent as well as by owner occupiers. All homes are allocated to one of eight bands, with lowest value homes in Band A and highest value in Band H. Each year local authorities set the level of Council Tax for their area by determining the charge payable by households in Band D. In 2001/02 the average English council's Band D Council Tax is £901. The tax for households in each of the other bands is a fixed proportion of the Band D Council Tax for the local authority as follows:

Band / Value of home estimated at April 1991 / Proportion of the tax due for a band D property

A Under £40,000     -     66.6%

B £40,001-£52,000     -     77.7%

C £52,001-£68,000     -     88.8%

D £68,001-£88,000     -     100%

E £88,001-£120,000      -     122.2%

F £120,001-£160,000      -     144.4%

G £160,001-£320,000      -     166.6%

H Over £320,000      -     200%

Households with only one adult and those where a person has a disability are eligible for discounts on their Council Tax. Student households pay no tax at all. Households with low incomes can claim Council Tax benefit which covers some or all of the cost of Council Tax.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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NEW PROPOSALS MEANS SOME KINGSTON RESIDENTS COULD BE FORCED TO COUGH UP MORE COUNCIL TAX

FIRST PUBLISHED BY: THIS IS LOCAL LONDON

COUGH UP MORE COUNCIL TAX UNDER NEW PROPOSALS

Landlords, second home owners and more than 400 residents of working age could be forced to cough up more Council Tax under new proposals. Kingston Council’s new Council Tax benefit scheme aims to charge higher rates to those who can afford it, while protecting the elderly, disabled and vulnerable in a bid to make up a £1m shortfall.

The deficit comes after central Government decided to abolish the national Council Tax benefit scheme and cut funding by 10 per cent by April 1 next year, leaving the local authority in the lurch. Currently 9,600 Kingston residents are claimants of Council Tax benefit, that is means tested and helps people with low or no income to pay their Council Tax.

The plans aim to encourage people to work by rewarding those who do, while still protecting people on low incomes who are already struggling to make ends meet.Under the new scheme £100,000 will come from 400 people of working age who live with other working adults and will be asked to contribute more. The rest of the shortfall will be met by removing Council Tax exemptions and discounts on certain properties, including those that are not occupied as a main home. An empty homes premium of 50 per cent will also be charged on properties left empty for more than two years.

Councillor Rolson Davies, lead member for finance and resources, said: “We understand that our proposals will not be popular with those who we would be asking to pay more, but we have a responsibility to protect those who are vulnerable, including those people relying on our frontline services.” Tenants may have to pick up the shortfall after changes to Council Tax benefits, according to Chris Norris, head of policy at the National Landlords Association (NLA).

However, Mr Norris said good communication with both groups and the council could minimise any negative effect. He said: “Landlords will be keen to sustain long-lasting tenancies, so it is important that tenants and landlords work together to agree the best way to continue rent payments and sustain their tenancies.”

Pippa Mackie, chief executive of Kingston citizens advice bureau, said one problem area could be for former owners of repossessed houses, as building societies will be taxed after repossession and they could try and pass the cost on. She said: “I think that most people who are reliant on welfare benefit are concerned about the impact that changes might have on them. “There are going to be changes which may cause confusion so we will be working to make sure that as much information as possible is out there.” People who are of pension credit age or who are receiving a disability related benefit will not be affected by the changes.

A consultation on the proposed changes will start on July 2 and run until September 9, before being considered by the council’s policy and resources committee and full council in December.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.


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£2BILLION OF COUNCIL TAX LEFT UNCOLLECTED BY TOWN HALLS WHO THEN MOAN ABOUT CUTS BY WHITEHALL

FIRST PUBLISHED BY: THE MAIL ONLINE

COUNCILS IN ENGLAND HAVE FAILED TO COLLECT BILLIONS IN COUNCIL TAX – WHILE COMPLAINING ABOUT CUTS TO THEIR BUDGETS FROM WHITEHALL.

The total arrears – much dating back several years – is spread across 31 local authorities and stands at £2.3billion. Eight out of the ten councils with the worst record on collecting Council Tax are Labour-run. Liverpool had the highest amount of arrears, with nearly £108million in Council Tax outstanding – about £500 per household in the city.

Biggest debts: Liverpool City Council is owed £108million in unpaid Council Tax. Earlier this year, the city’s Labour leader Joe Anderson said he was ‘so angry and so devastated’ that the council had to find £91million in savings. 

That amount is less than the total in uncollected Council Tax. 'Angry': Liverpool's Mayor Joe Anderson was 'devastated' the council had to make savings in other areas to make up the shortfall. Manchester’s plans to cut services were criticised last year by David Cameron when he told the Labour-run local authority it should first cut its chief executive’s £200,000 salary. Labour regained control of Birmingham from the Tories and Lib-Dems in May and Croydon, also among the ten with the worst record, is controlled by the Tories. Local government minister Bob Neill unveiled the figures in a parliamentary answer to Labour MP Helen Jones. He said: ‘Every penny of Council Tax that is not collected means a higher Council Tax for the law-abiding citizen who does pay on time. 

‘These figures show that there is a significant source of income which councils could use to support frontline service or cut Council Tax bills.’ Lambeth, which has £48million of uncollected Council Tax, last year used taxpayers’ money to fund a poster campaign complaining about central government spending cuts. The posters said: ‘The Government has cut our money so we are forced to cut services.’ The Government has ordered a freeze of Council Tax across the country and has refused to pour in more cash to profligate councils.

'Shameful': Secretary of State for Communities and Local Government Eric Pickles accused local authorities of squandering millions by failing to collect Council Tax Local authorities have also expressed outrage over the Government’s 28 per cent cut to their funding. But Local Government and Communities Secretary Eric Pickles yesterday hit back, saying: ‘This roll call of shame is familiar reading, with Labour councils year in year out topping the table of local authorities who squander millions by failing to collect our Council Tax.

‘If these Labour authorities stopped complaining about the legacy of cuts left by their own party and actually chased up Council Tax dodgers they could use the money to protect hundreds of frontline jobs.’ The worst collection rate in England for last year was the London borough of Newham, where 8.3 per cent of Council Tax was not paid. It was followed by Manchester, Salford and the London boroughs of Southwark, and Barking and Dagenham. In total, £612million of Council Tax was not collected in 2010-11 across England.

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LGA DEMANDS CONTROL OVER COUNCIL TAX RULES

FIRST PUBLISHED BY: LOCAL GOVERNMENT CHRONICLES

THE GOVERNMENT MUST SCRAP BLANKET COUNCIL TAX DISCOUNTS OR THE POOREST WILL FACE HUGE BILLS.

That warning has come from the Local Government Association, which said more than two million people who are either low earners or young and unemployed could have to pay an average of £247 more in Council Tax each year. Control of entitlement to the benefit is due to pass to councils next year. But the government will impose a £500m cut, equivalent to 10% of the total available.

And it has ordered that discounts cannot be reduced for single people regardless of income or for currently eligible pensioners, as well as suggesting that vulnerable groups such as families with children should be protected from any reductions. Ministers have claimed that councils could make up the shortfall by cutting discounts for second homes and empty properties.

But LGA chair Sir Merrick Cockell (Con) rejected this: “The poorest regions and the most vulnerable people will be hardest hit by this cut unless the government offers councils more flexibility over all forms of Council Tax discount. “It is the only way that councils can ensure that the greatly reduced funding for Council Tax benefit is targeted at the local people who need it most.” Without this, the £500m cut would prove “impossible to deliver” except through service cuts, higher overall tax rates or the higher charge for working poor people and the young unemployed, he warned. Sir Merrick added: “The Treasury has made the cut and left councils to make incredibly tough decisions and face the inevitable fallout.”

The LGA arrived at its £247 figure by taking Department for Work and Pensions statistics, published only at UK level, which show 5.9 million Council Tax benefit recipients, of whom 2.2 million are aged 65 or over and 1.7 million are families with children. The first group must be protected, and it has assumed that councils would wish to protect the second, leaving 2.0 million working age benefit recipients to share the £500m cut, an average of £247 each. For England, the figure would be roughly £210. David Magor, chief executive of the Institute of Revenues, Rating and Valuation, said: “The shortfall in England will be £437m, and the government has said second and empty home discounts could be worth some £420m. “The trouble with that is that it is ‘lumpy’ at local level. If you have not got many second homes you will have to cover the gap from something else.”

Councils in places such as the south west, with both low income levels and high numbers of holiday homes, might make the equation work, but those in older industrial areas could struggle, he said. Local government minister Bob Neill said: “The government has no intention of letting councils abolish vital discounts like those for single person homes.

“Spending on Council Tax benefit has more than doubled since 1997. The Local Government Association needs to realise that councils accounts for a quarter of all public expenditure and they need to play their part in tackling the deficit.” He added: “We are giving councils a strong incentive to put in place a better and fairer local Council Tax support scheme based on local priorities that means they can help more residents get back into employment, protect the vulnerable and reduce the spiralling benefits bill.”

The Local Government Finance Bill, which would give effect to the changes in Council Tax benefit, is due for debate in the House of Lords this evening.


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COUNCIL TAX BENEFIT LOCALISATION FRAUGHT WITH DIFFICULTIES, SAYS IFS

FIRST PUBLISHED BY: PUBLIC FINANCE

FISCAL STUDIES HAS WARNED

Local authorities face a ‘tough challenge’ in taking control of Council Tax Benefit at the same time as it is being cut by 10%, the Institute for Fiscal Studies has warned today. In a report commissioned by the Joseph Rowntree Foundation, the economic think-tank has also found that the move is likely to disadvantage poorer working households. 

Funding for the Council Tax Benefit will be given to councils in England from next April. The grants provided will be worth 90% of what would have been spent in each area. In total, the benefit is being cut by £500m.  In Scotland and Wales, the money is being given to the devolved administrations to allocate to local government. Scotland has said it will make up the 10% cut from central funds. 

In England, town halls have been instructed not to cut the benefit for pensioners, and are unable to reduce the separate single person’s discount. This leaves them with the option of reducing eligibility criteria for working-age people or filling the funding gap themselves. Authorities need to agree their schemes by January next year.  But the IFS warned today that authorities ‘have little experience or expertise in designing means-tested support schemes and very little time to do it’. 

Almost 6 million people receive Council Tax Benefit, making it more widely claimed than any other means-tested benefit or tax credit. Around 85% of it goes to households with below-average income, and almost half to the lowest-income fifth. Unless councils find additional money from elsewhere, the requirement to protect pensioners’ entitlements implies an average 19% cut in support for working-age claimants, the IFS found. 

The alternative, protecting all support by filling the funding gap from elsewhere, would require a 1.9% increase in Council Tax rates, the think-tank said. Its report, Reforming Council Tax Benefit, also criticised Whitehall’s decision to localise the benefit and exclude it from the Department for Work and Pensions’ new Universal Credit.  This action ‘severely undermines’ the attempt to simplify benefits under the Universal Credit. Its aim is to remove disincentives to work by replacing a number of overlapping means tests with a single one, ensuring that overall effective tax rates cannot rise too high. 

However, separate local means tests for Council Tax support would undermine this, the IFS said. For example, although an ‘aggressive’ means test by councils could protect the very poorest from cuts, to save 10% it would be so severe that some people would be worse off after a pay rise. ‘It is difficult to think of reasons why fully integrating CTB into Universal Credit would be inferior to what is now being proposed,’ the report stated. 

Stuart Adam, senior research economist at the IFS and one of the report’s authors, said: ‘Councils face a difficult task to design replacement schemes that protect the vulnerable while maintaining work incentives in the context of reduced funding. The fact that they also need to make these schemes work alongside Universal Credit, which is being introduced from October 2013, makes an already difficult challenge truly formidable.’ 

Chris Goulden, programme manager for poverty at the Joseph Rowntree Foundation, added: ‘While there are some sound reasons for localisation, given that it is a rebate of a local tax, it is likely to create headaches for claimants and for local administering agencies. ‘Not only is the 10% cut likely to affect people already in or close to poverty, the protection from this cut provided for pensioners means that working-age adults are hit that much harder.’ 

Responding to the report, the Department for Communities and Local Government said that Council Tax Benefit was best placed within ‘a joined-up Council Tax system’. A spokesman added: ‘It is right that councils, who collect Council Tax, have a strong incentive to put in place a fairer local Council Tax support scheme based on local priorities that helps residents get back into employment and protects the vulnerable.’ 

The Local Government Association said that councils were ‘extremely worried’ about how they could protect residents from the 10% cut. They were being put in an impossible position, LGA chair Sir Merrick Cockell said. ‘They can either cease helping the working poor, or continue to support them by taking money from other services or putting up Council Tax. 

‘If the government wants to localise Council Tax Benefit it needs to go all the way and give local authorities the freedom to make savings in a way which will protect the people who most need help.’

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.


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OLYMPICS HOCKEY STAR LEFT WITH £1,500 COUNCIL TAX BILL BECAUSE SHE TOOK TIME OFF LAW DEGREE TO TRAIN FOR GAMES

FIRST PUBLISHED BY: THE MAIL ONLINE

THREATENED BY THE BAILIFFS: What a disgrace.  

Bristol University student Georgie Twigg, 21, spread the teaching of her final academic year over two to focus on a training for the GB hockey team. But she is now only part-time student in a house of six Bristol - leaving her liable for a hefty Council Tax bill on a property in band E, totalling £1,500


A young Olympic hopeful who took time out from her law degree to train for a place at the London 2012 games has been threatened by balliffs over Council Tax payments. Bristol University student Georgie Twigg, 21, spread the teaching of her final academic year over two so she could focus on a tough training schedule for the GB hockey team. But this loyalty to her country makes Miss Twigg the only part-time student in a house of six, in Clifton, Bristol - leaving her liable for a hefty Council Tax bill on a property in band E, totalling £1,500.


Bailiffs calling: Bristol University student Georgie Twigg, 21, spread the teaching of her final academic year over two so she could focus on a tough training schedule for the GB hockey team. Full-time students are exempt from paying Council Tax while they study, but as Miss Twigg only attends university for one day a week, she no longer qualifies for this bracket. Miss Twigg spends the other four days of her week training with her GB hockey team in Maidenhead, Berkshire - living in a property that she pays full Council Tax on.


She received a court summons after returning from Argentina in February, where her GB hockey team won a silver medal at the Champions Trophy for the first time. Miss Twigg, who carried the Olympic torch through Clifton, Bristol, earlier this month, contacted Bristol City Council to ask to be treated as a student as she does not have the money to pay the bill - but her plea fell on deaf ears.


The summons stated that because she was completing her final year in two years instead of one, she was classed as a part-time student and was no longer exempt from paying Council Tax, as full-time students are. Miss Twigg's parents wrote to the council, including to leader Simon Cook and chief executive Jan Ormondroyd to ask that she be made exempt due to her exceptional circumstances.


In action: Miss Twigg spends four days of her week training with the GB hockey team in Maidenhead, Berkshire - living in a property that she pays full Council Tax on. But the council told the family there was nothing it could do and demanded the money. At the start of this month, just as she was about to take her final law exams, Miss Twigg received a notice of 'intended bailiff action'.


Her father Robert Twigg, 57, said: 'We feel that Georgie has been penalised for trying to complete her studies while at the same time qualifying for the Olympic team. 'It can't be right that this charge wouldn't have been put on her if she had opted out of such a fantastic opportunity. 'Bristol City Council has been completely unsupportive and unreasonable - no-one seems to want to stick their head above the parapet and realise that these are exceptional circumstances - it just seems so wrong.'


Miss Twigg challenges with Ireland's Niamh Atcheler during their fifth/sixth place play-off in the Investec London Cup at the Quintin Hogg Memorial Ground in Chiswick, west London, earlier this month. A spokesman for Bristol City Council said: 'Unfortunately the law regarding Council Tax discount is quite clear and does not allow any leeway on the part of the city council. 'Miss Twigg forfeited her eligibility for the Council Tax discount when she reduced the number of days she was studying in Bristol.


'We have looked at this case sympathetically to see if there was any room for discretion on our part, given that she is about to represent the UK at the highest level, but regrettably there is none and we are bound by national legislation. 'It is a situation that can also affect other individuals who give up their time for good causes such as special constables and charity volunteers. 'We have offered as reasonable terms as we can for the repayment of the debt incurred. It goes without saying that we wish her all the best at the Olympics.'


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COUNCIL TAX IRREGULARITIES IN BROUGH

FIRST PUBLISHED BY: THIS IS HULL AND EAST RIDING

THIS IS AN ACTUAL CASE - SHOCKING WHAT THEY WILL DO TO ALL OF US.

The house we occupy on the Bovis estate in Brough is described as 'The Kingsley' and is situated in the middle one of three parallel cul-de-sacs on the east side of the estate bordering on Common Lane. In this part of the estate just eight 'Kingsley' design houses were built. In my cul-de-sac our Kingsley house was one of nine houses of differing designs. 

When we moved in we learned that of the nine houses, seven were banded as 'G' whilst the two smaller houses were banded as 'F'. As our house was one of those banded as 'G' we saw no reason to complain. After living in the property for some five years, and quite by chance, we learned that five of the seven houses that had originally been banded as 'G' had, at some point in the previous three years been re-banded to 'F' by the Valuation Office Agency (VOA) leaving only our house and one other as 'G'. 

I assembled a portfolio of evidence on the pricing of houses in the area and made representation to the VOA and was told here was nothing we could do. We then approached the Valuation Tribulation (VT) who told us they could do nothing as I had gone past the 6 month dead line for appealing against a banding. Of course we pointed out to the VT that we would not have needed to know about the appeal process as , initially, most of our immediate neighbours were on the same band as us, and the VOA had not told us that they were going to re-band the other houses in the cul-de-sac.

Then the VT dropped a bombshell. They told us that a resident of a 'Kingsley' design house in one of the other cul-de-sacs had won a successful appeal against his 'G' band and had been re-banded as 'F'. As might be imagined we were furious that someone in a house of identical design to ours was now paying £500 a year less in Council Tax than we were. 

We were even more taken aback when the VT sent us the papers on that successful appeal. The package of data sent in by the resident of that identiical 'Kingsley' property was, in almost every respect, identical to the evidence we had submitted even though we had never spoken to the owner and knew nothing of his appeal. We should add that there is one important difference between my 'Kingsley' house and his 'Kingsley' house which is that his plot is larger than mine.

We went back to the VOA who told us there were "differences" between the two cases but would not tell us what they were. The VT told us that it was usual and customary for the VOA to take the decisions of the VT and apply them to "similar" properties in the "vicinity" of a successful appeal. When we asked the VOA why they would not apply the VT decision to not just our 'Kingsley' design house, but to the other six 'Kingsley' houses in the vicinity they refused to say.

We then went to the local government ombudsman who said they could do nothing but suggested we went to the HMRC adjudicator in London. This we did but it was only possible to do so by going through our local MP, David Davis. The Adjudicator said the VOA were refusing to back down and she could not force them to apply the VT decision. 

The adjucator did suggest that we might be able to put forward a case for re-banding our property on the basis that the nature of the estate had changed substantially as a consequence of the council allowing a greater density of houses to be built than was originally allowed for. I refused to do this as there was already a precedent for re-banding 'Kingsley' design houses which had been take some years previously as a result of the VT decision. 

Additionally, the Adjudicator told us that a significant element of the original banding decision by the VOA had been the square footage of the houses. It was immediately apparent to us that the two houses in our cul-de-sac who did not get their banding changed by the VOA had integral double garages whilst the other five houses that did have their banding changed had detached or linked double garages. 

I then discovered that the VOA was counting the square footage of our double garage as part of the living accommodation of the house. When we pointed this out to the Adjudicator she said the VOA was still not going to change their original banding of our house.

Despite the very obvious injustice of this case we are still in the position of paying £500 a year more in Council Tax than a fellow resident of this estate who lives in an identical house to ours. This has now been going on for over six years. The amount in question now exceeds £2,500. We are now at a loss as to what to do next but surely there must be some way of rectifying this dreadful state of affairs.


'This Case just shows you that everybody needs professional guidance and help from us. These Government departments will put obstacles in your way to prevent you from claiming back your Council Tax over-payments'.  


Please contact Rebates UK Claims & Services Ltd for help in claiming back all your over-payments. Working with you: to give the Council a bloody nose together.


Call us on: 0161 209 3132 today! 

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.


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