Council Tax Exemptions, Discounts and Disability Reductions

This page sets out who has to pay council tax at all, the main discounts and exemptions in England, the disabled band reduction, and how to get a wrong bill corrected even after a liability order has been made. Wales runs a broadly similar system under its own provisions, so the detail below is written for England and should be checked against your own council's pages if you live elsewhere.

If enforcement agents are already involved, none of this replaces dealing with them, but it can change the amount they are collecting, and sometimes it removes the debt altogether. Council tax bailiffs covers that side of the problem.

Who is liable for the bill in the first place

Liability follows a hierarchy set by section 6 of the Local Government Finance Act 1992. Working from the top, the bill belongs to a resident freeholder, then a resident leaseholder, then a resident tenant, then a resident licensee, then any other resident, and only then, if nobody lives there, the owner. People who sit at the same level in that hierarchy are usually jointly and severally liable, which means the council can pursue any one of them for the whole amount.

That matters for arrears because councils sometimes bill the wrong person entirely: a former tenant after they moved out, one joint tenant alone, or an owner for a period when a tenant was actually resident. If the person named on the liability order was not the liable person for the period claimed, that is a defect worth raising with the council in writing, with tenancy agreements or completion dates as evidence.

The single person discount

Under section 11 of the Act, the bill is reduced by 25 per cent where there is only one resident, or where every resident except one is disregarded for discount purposes. If everyone in the household is disregarded, the discount is usually 50 per cent instead, unless the dwelling is exempt outright.

Councils periodically review single person discounts and sometimes remove them on weak evidence, such as another adult being registered at the address for credit purposes. If yours was removed and the extra charge then fell into arrears, ask the council for its reasons and provide evidence of who actually lived there. A wrongly removed discount can and should be reinstated for the whole period it applied.

People who are disregarded

Schedule 1 to the 1992 Act lists the people who do not count when residents are added up. The main groups are:

• people who are severely mentally impaired
• full time students, student nurses, apprentices and some trainees
• people aged 18 or 19 for whom child benefit is still payable
• carers meeting prescribed conditions, and certain care workers
• long stay hospital patients and care home residents
• people detained in prison or under mental health legislation.

A household of two adults where one is disregarded pays as if there were one resident, so the 25 per cent discount applies. Two disregarded groups deserve their own explanation because they are so often missed.

Severe mental impairment

A person is disregarded as severely mentally impaired where they have a severe impairment of intelligence and social functioning which appears to be permanent, a registered medical practitioner has certified it, and they are entitled to one of a prescribed list of benefits. Dementia, and the effects of a stroke or serious brain injury, are common qualifying conditions, though the test is the certificate and the benefit entitlement rather than any particular diagnosis.

Where someone with dementia lives alone, the dwelling can be exempt entirely rather than merely discounted. Where they live with one other adult, that adult usually keeps a 25 per cent discount. Councils can backdate this, and some have backdated it for many years where the entitlement clearly existed, so it is always worth claiming even for past periods that have already gone to enforcement.

Students and exempt dwellings

A dwelling occupied only by full time students is exempt, not merely discounted, and halls of residence are exempt as a class of their own. A mixed household, students plus one working adult for example, usually gets a discount rather than an exemption, with the working adult liable for the reduced bill.

Exemptions come from the Council Tax (Exempt Dwellings) Order 1992, which lists classes of dwelling on which no council tax is charged at all. Alongside the student classes, the ones most often relevant to arrears cases are:

Each class has detailed conditions, so treat the table as a map rather than a ruling on your own case, and put the claim to the council with evidence.

The disabled band reduction

The Council Tax (Reductions for Disabilities) Regulations 1992 provide a reduction where a dwelling is the sole or main residence of someone who is substantially and permanently disabled, whether by illness, injury, congenital deformity or otherwise, and the property has at least one of three features needed to meet that person's needs: a room used predominantly for them which is not a bathroom, kitchen or lavatory; a second bathroom or kitchen; or enough floor space for a wheelchair used indoors.

The effect is that the bill is charged as if the property were in the band below its actual band. Band A properties cannot drop a band, so GOV.UK describes the equivalent for them as a 17 per cent discount. The disabled person does not need to be the bill payer, and children count.

Council Tax Reduction, premiums and band challenges

Three further checks are worth making on any account in arrears.

Council Tax Reduction is a means tested reduction run by each council under its own local scheme, separate from everything above. If income was low during the period the arrears built up, ask whether a claim could have been made and whether the council will treat a late claim sympathetically.

Premiums work in the other direction. GOV.UK states that a home empty for at least a year can attract an extra charge, rising to as much as four times the normal bill after ten years, and that second homes can be charged up to twice the normal amount. If a premium is inflating the demand, check whether one of the exceptions applies, such as a property being actively marketed or recently inherited.

The band itself can be challenged through the Valuation Office Agency, which handles this rather than the council. A successful challenge can be backdated, though bands can move up as well as down, so look at what neighbouring similar properties are banded at before starting.

Fixing a wrong bill once enforcement has started

A liability order is only as good as the sum behind it, and under regulation 34(3) of the Council Tax (Administration and Enforcement) Regulations 1992 "no application may be instituted in respect of a sum after the period of six years beginning with the day on which it became due". If a discount, exemption or reduction should have applied, write to the council, ask for the account to be recalculated for the whole affected period, and ask it to instruct its enforcement agents to hold action while it looks at the claim. Councils can do that, and many will where the claim is arguable.

If the council refuses a discount or exemption you believe applies, there is a formal appeal route to the Valuation Tribunal, which is free. And if the arrears are real but unaffordable even once corrected, get help rather than letting enforcement fees mount while the argument continues.