Category Archives: Council Tax

Council Tax: Essential information for landlords

We’re planning a few simple blog posts over the next few weeks to remind landlords of some of the basics about Council Tax, starting off with a quick one about new tenants in your property.

 


If you’re not as dull as me (and I really can be dull) you probably don’t think about Council Tax very much, which means you could be forgetting some of the things you need to know. If you do – you’re not alone. Landlords on occasion get things wrong or sometimes don’t realise how important Council Tax is. This can lead to issues when administering the tax and this can in turn impact upon landlords.

 


If things go wrong with a Council Tax account where we haven’t had the right information at the right time, or the landlord may have misinterpreted something, it can only cause delays, confusion and sometimes extra expense. As a consequence we’ll be putting out reminders to try and help the process run smoothly.

 


Here’s the first. It might seem too obvious, but we know from the contacts we have with landlords that it does need re-stating.

 


If someone moves in or out of your property, tell us (that’s the council’s Revenues and Benefits Service) straight away. This means we can get the right bill to the right person and avoid unnecessary hassle for everyone. Hopefully, your tenant(s) will tell us when they move in or out, but this isn’t always the case.

 


Remember that if there is a period, even if very short where your property does not have a tenant, as the landlord you will be responsible to pay the Council Tax until the next tenancy starts.

 


The best way to notify us is online, via a MySandwell account. A MySandwell account lets you share information with us and other Sandwell services and keep track of all your interactions with the council. Once you’ve opened the account – it’s quick and easy to use. 

Open a MySandwell account now.

Oliver

Council Tax, Income Tax and your record keeping

Tax

Yesterday afternoon, I was trying to help a landlord sort out a Council Tax issue.

 
We know him to be a good, responsible landlord who maintains his properties to a high standard, looks after his tenants and has a good working relationship with the council. But we had a problem; a relatively simple one that could have been prevented by better record keeping and by staying in touch with our Council Tax billing section. He’s ended up with a very substantial bill that might have been mostly avoidable.

 
We are trying to do what we can to reduce the bill. Whether we can or not will partly depend on whether he can find some missing documentation we need to see from 2014: and it would also have been a smaller bill– if he had stayed in contact with us and perhaps kept more of an eye on his Council Tax account.

 
I don’t want to be critical of the gentleman and I certainly don’t want to try and ‘tell anyone off.’ As I’ve said, we know him to be a good landlord and we appreciate that there a lot of issues landlords have to stay on top of when managing their properties. Being a landlord can be a demanding job – but the things that went wrong in this case happen far too frequently and are often preventable.

 
Although we are doing what we can to reduce the bill, he will probably end up having to pay hundreds of pounds more than he would have done, had he stayed in contact with us in the relevant period. And if he can’t find some of the documentation I’ve asked him to find for a period back in 2013-14 his bill could be even worse.

 
Keeping full records of your tenants can be essential. You never know when records about a tenancy, particularly about rent payments will be demanded for Council Tax disputes, by HMRC for Income Tax purposes or by a court (and there are plenty of situations when a failing tenancy can end up in a court room).

 
So – some simple rules.
• Whilst not forgetting your responsibilities under GDPR – make sure you keep your tenancy records. Different documents need to be kept for different lengths of time – but you can always find the right guidance online on what’s required. There are plenty of excellent sites giving free landlord advice – get googling.
• In particular – make sure you keep proper records of rent payments / rent accounts (Myself and Liz – your other blog editor are constantly shocked at the number of landlords who don’t). If HMRC are knocking on your door asking for these and you don’t have them – there might be severe consequences. (Sometimes we get to see them and it’s never pleasant!).
• Keep the Council Tax team informed when someone moves in or out of your property. Don’t just rely on the tenant doing it.
• Remember that for any period your property is untenanted – there will still be a Council Tax charge. However short that period may be. And if it goes unpaid – extra recovery costs will get added on, making the bill larger than would have been necessary.

 
And finally, this isn’t all just to make life easier for bureaucrats like me (although it does) – it’s about keeping you, the landlord, out of trouble and your costs as low as possible.

 
Oliver

Council Tax . . . the costs of not paying.

money

 

Most landlords have no wish to get involved in their tenant’s business. As long as the tenant looks after the property, doesn’t upset the neighbours and pays the rent on time – that’s normally all a landlord needs to know.

 
If a tenant falls into Council Tax arrears, it’s not usually an issue for the landlord, as long as the landlord is certain that they have given us the correct information about who is in the property and when from, so that we can issue the right person the right bill.

 
It’s not the landlord’s job to chase up tenants about paying Council Tax, but if a landlord is aware that a tenant has financial problems or mentions having difficulty staying on top of their Council Tax – you might want to give them a tactful reminder about how important this is and the consequences of getting into arrears.

 
We have no wish to add to people’s burdens if they are having financial problems or struggling to pay for whatever reason. But if someone does not pay what they should, we are obliged to do our utmost to collect the debt. And this often means they face extra costs. First – there are court costs if we need to issue a summons of £69.50 which are added directly to the Council Tax bill.

 
After a case has gone to court and a liability order is issued – if the person still won’t pay, their case will be passed to an ‘Enforcement Agent.’ (previously referred to as a bailiff).

 
Enforcement agents will then start to add their own costs to the bill, as below:
• A £75 Compliance Fee is added as soon as the Council passes an unpaid account to the Enforcement Agent for collection. This fee is payable on each Liability Order. (You can have different Liability Orders for different financial years; for example – if someone hasn’t paid their Council Tax from February to May – the period runs from one financial year into another so there will be two Liability Orders.
• If the tax-payer doesn’t make an acceptable arrangement with the Enforcement Agent, a further fee of a least £235 is added. This is a one off fee regardless of the number of outstanding Liability Orders
• If the case goes to the next stage and goods have to be seized, a further minimum £110 Sale or Disposal fee is added.
• A further 7.5% fee will also be charged on any additional amount above £1500, excluding fees, this is though only chargeable at the Enforcement and/or Sale & Disposal stages.

 
These charges are set for Enforcement Agents at national level and the money from Enforcement Agent fees does not go to the council.

 
All of this means that someone who might have a relatively small debt on their Council Tax could see it snowball substantially. Definitely not something the council wants to see happen, but we have to collect Council Tax. So if anyone is ever worried about making a payment, has fallen into arrears or is worried that they might, they should talk to us as soon as they can.

 
The first thing we can do is to see if they might qualify for a discount – for example a Single Occupier Discount or whether they might qualify for Council Tax Reduction (the replacement for the old Council Tax Benefit). Once we have done these checks – we will set up an arrangement to pay so that the person has a clear plan to follow.

 
Our key message though is that people should never leave a Council Tax issue unresolved and as always, there is more information on our webpages.

Oliver.

 

 

Council Tax and evidence of old tenancies

Evidence needed

Sometimes landlords dispute Council Tax bills they receive for earlier periods on the grounds that there was a tenant in occupation of the property in the period the bill covers. As proof, the landlord will provide a copy of a tenancy agreement.

 
This isn’t always enough proof so councils are entitled to ask for extra documents. A business-like landlord shouldn’t find this too much of a problem.

 
They should have all sorts of relevant documents, such as proof of tax payments or the detailed records of rent payments they received that should be kept for tax purposes. Then there’s a host of other things, from deposit protection, to gas safety certificates or general correspondence with the tenant. It’s hard to rent out a property without building up a lot of documentation. So if you ever do have retroactively prove a property had a tenant – you should have the paper work.

 
Please don’t be offended if you are asked for more documentation than just a tenancy agreement. It doesn’t mean council officers doubt your word. Just that they have to protect public funds by sometimes asking for evidence.

 
Being a landlord is a business. It’s only reasonable to expect businesses to keep proper records. And Valuation Tribunals (who adjudicate on disputes about Council Tax liability) agree that councils are entitled to ask for more evidence than just a tenancy agreement.

 
The best way to avoid confusion over who should get a Council Tax bill is for landlords to keep the council up-to-date about changes in any property they own or manage. If there is a change in the occupancy, don’t leave it to the tenant – make sure you inform the council yourself straight away.

 
Oliver