council tax retrospective backdated fees?

Mr_Matt_K

This is my first post so I hope I can be as clear as most.

We moved into our new home in December 2015. We have been paying council tax from this date every month. Today, 20th October 2016 I received a letter from the council telling us that our council tax band will be moving up due to the fact the previous owners got an extension done in 2004. We don't mind paying a little more. The letter stipulates that the charges for the new band will be backdated to Dec 2015. We simply can't afford to pay backdated monies from 2015. Surely the council had a 'duty of care' to ask or let us know when we contacted them a year ago.

My question is Can the council simply decide to backdate fees which they just decide to spring on us a year later?

Previous MSE forums talk of similar things and talk of 'written notice' (nothing about retrospective charges). Another forum stipulates I should say it was 'their mistake'?

I'm losing faith in the council.

Any help much appreciated.

CLAPTON

Mr_Matt_K wrote: »

This is my first post so I hope I can be as clear as most.

We moved into our new home in December 2015. We have been paying council tax from this date every month. Today, 20th October 2016 I received a letter from the council telling us that our council tax band will be moving up due to the fact the previous owners got an extension done in 2004. We don't mind paying a little more. The letter stipulates that the charges for the new band will be backdated to Dec 2015. We simply can't afford to pay backdated monies from 2015. Surely the council had a 'duty of care' to ask or let us know when we contacted them a year ago.

My question is Can the council simply decide to backdate fees which they just decide to spring on us a year later?

Previous MSE forums talk of similar things and talk of 'written notice' (nothing about retrospective charges). Another forum stipulates I should say it was 'their mistake'?

I'm losing faith in the council.

Any help much appreciated.

best to post on the tax cutting board

CIS

The local authority have to work on whatever band the Valuation Office Agency (VOA) set - it's not the council's decision . If the VOA change a band then the local authority are required to re-calculate the Council Tax using this band from the date of the change that they are given.

For above - if you're in Scotland it's the Scottish Assesors rather than than VOA but the principal still holds.

Craig

Apodemus

I suspect there is more to this - either more than you are aware of, or more than you are telling us. It would appear that something, possibly related to the sale of the property, has made the Council aware of the situation. Perhaps they had not been notified of the change in size of the property until the time of the purchase. Perhaps the previous owner only resolved planning or building control issues at the time of the sale. Or perhaps something else entirely. I would also have expected the wrong banding to have been picked up by surveyors or solicitors during the sale process, so you should have been aware as part of your own "due diligence".

If Council tax was underpaid, then it seems reasonable to back-date that. You could appeal on the basis that it is less reasonable for that to be back-dated to the previous financial year, but I would think you are stuck with it for the period from April. If the issue was the other way round and you had been overcharged, I am quite sure you would think you were due back payment for the previous year, so I would see it as reasonable for it to work both ways.

unforeseen

If this was the first sale after the extension was built then the the tax band would have been reassessed on the sale which is what has happened..

The VOA only re-assess on house sale and not normally after the building work.

It may have been a long time ago that the extension was built but the process is normal. I assume the delay in advising of the change may be a mix of the length of time since the re-assessment trigger and their workload

vivatifosi

As mentioned in the previous post, if an extension is built, the council tax band can go up at the time of sale.

The VOA are almost certainly correct, but you should have six months from moving in to challenge this. I'm not sure where you stand if the band changes but the council does not make you aware.

There is a strong likelihood that you will have to pay though. I would ask whether you can pay the extra in instalments, as they should have informed you sooner and you cannot afford to pay it all in one go.

Craig (CIS) above knows more about council tax than most people on any MSE board.

CIS

Any extra council tax that has become due will be spread over the remaining instalments (technically any from before April doesn't have to be but it's unusual for them to not do so on a live account).

If it's a large amount then make sure you have your instalments spread up to & including March 17 (as is your statutory right - http://lgfa92.co.uk/council-tax-paying-over-12-instalments/). If it's going to cause a financial problem then ask the local authority if they'll let you spread it out further for you. There is no legal requirement for them to spread it further though.

The one point to remember with the local authority is that they have no say in what has happened, they can only act on the information that is set by the VOA.

As the above post, you can dispute the new banding with the VOA/ Scottish Assessors. If they alter the band then local authority will amend your council tax charge as required.

Craig

Mr_Matt_K

Thank you so much for your replies. This really helps a lot.
It's possible that the house sale has triggered this new banding but I'm still angry they didn't start these charges a year ago when we were diligently paying every month. The new house is in Scotland so your replies make a lot of sense.

The thing about the entire banding system in Scotland is that the figures are based on stats from 25 years ago. 'Everyone's home is wrongly banded. My new home is worth £170k but the have put me in their 2nd highest band which is rated between £80k - £150k. The top band says £212k & over. This means that people with a 2 million pound house in my area are pay around £400 more than me per year.

You would think the councils would sit down and remedy this once every few years.

I really appreciate everyone's comments
Matt

Apodemus

Mr_Matt_K wrote: »

The new house is in Scotland so your replies make a lot of sense.

You would think the councils would sit down and remedy this once every few years.

Totally down to Government not Councils. There are big political risks for any government trying to bring in a revaluation or a new system (remember the Poll Tax!), so they all put it off as long as possible.

You say your house is "worth" £170k and is in the second top band (i.e. band G). Do you mean you paid £170k or that it's rateable value is given as £170k but it's current value is far higher? If it's current market value is £170k then it is hard to see why it should be in such a high band.

CIS

Mr_Matt_K wrote: »

Thank you so much for your replies. This really helps a lot.
It's possible that the house sale has triggered this new banding but I'm still angry they didn't start these charges a year ago when we were diligently paying every month. The new house is in Scotland so your replies make a lot of sense.

The thing about the entire banding system in Scotland is that the figures are based on stats from 25 years ago. 'Everyone's home is wrongly banded. My new home is worth £170k but the have put me in their 2nd highest band which is rated between £80k - £150k. The top band says £212k & over. This means that people with a 2 million pound house in my area are pay around £400 more than me per year.

You would think the councils would sit down and remedy this once every few years.

I really appreciate everyone's comments
Matt

Local Authorities would like to - the banding would increase on some properties and the costs would be borne by the Scottish Assessors Office / Valuation Office. Unfortunately (or fortunately) local authorities have no say in re-banding process at all.

The Welsh re-valuation was a bit of a trial run and wasn't the best success which is why England didn't follow. Scotland I suspect was also observing from the sidelines.

There has been a recent push for a Scottish re-valuation but the Scottish Assessors Association said they believed that they did not have the ability to do so with their current workload and staffing levels.

In respect of changing valuation bands the general aim with re-valuations is to keep roughly the same number of properties in each band so that , for example, most Band A properties when re-valued would still fall in to the new Band A. There would however be an opportune chance to perhaps alter that...

Craig

antrobus

Mr_Matt_K wrote: »

...It's possible that the house sale has triggered this new banding ....

It's more than a possible. It's what's supposed to happen.

Your property may be moved to a higher or lower band because its size or internal structure has been altered by a previous owner. A band increase due to alterations only takes place after the property has been sold.

https://www.gov.uk/guidance/council-tax-band-changes

Mr_Matt_K wrote: »

...but I'm still angry they didn't start these charges a year ago when we were diligently paying every month. ....

You should already have been aware that this was likely to happen, given that the previous owners had an extension built.

Mr_Matt_K wrote: »

..
The new house is in Scotland so your replies make a lot of sense.

The thing about the entire banding system in Scotland is that the figures are based on stats from 25 years ago. 'Everyone's home is wrongly banded. My new home is worth £170k but the have put me in their 2nd highest band which is rated between £80k - £150k. The top band says £212k & over. This means that people with a 2 million pound house in my area are pay around £400 more than me per year....

The thing about the entire banding system everywhere is that the actual valuation doesn't matter; it's the valuation relative to other properties that matters.

Mr_Matt_K wrote: »

..You would think the councils would sit down and remedy this once every few years....

Revaluing 25 million or more properties is not a trivial or costless exercise.