Help re. lodger and council tax

FairfieldLancs

Got a lovely knotty problem causing me concern - any advice gratefully received. My husband and I bought our house in 2008. It has four floors and four entrance/exits (2 at the front, 2 at the back). In the cellar there were both conventional cellar rooms, and a bathroom, a kitchen/diner and a sitting room/bedroom (there are two other kitchens, one derelict, and three other bathrooms on the other floors). We refurbished the more habitable rooms in the cellar.
When we divorced, I needed to find a way of making pennies meet, and took in a lodger. She inhabits the refurbished rooms downstairs, and as both front doors had a postal slot, I put a name on the second door to distinguish her post from ours. This door leads to the staircase which leads down to the cellar, and is used by anybody who lives in the house.
Now the council have determined that this part of the cellar constitutes a separate residence and should have its own council tax banding. I didn't see this coming because we hadn't changed anything but the organisation. There are many internal doors which we can lock for security reasons but I have free access to her rooms, and she can use the bath in the main body of the house as there is only a shower in the basement.
There is also a deed of covenant on the house which states that the property must be used a single private dwelling house. It is this in particular which concerns me regarding the council tax banding. The cellar has no value separate from the rest of the house as it cannot be sold independently because of the deed of covenant. I also thought I had not contravened the deed by having a lodger, because I have access to her rooms and she feeds our guineapigs, can have a bath etc. upstairs, shares the vacuum cleaner and the dehumidifier etc.
From what I researched so far, rooms which can function independently from the rest of the house can indeed incur a tax banding. I pay the single gas/electricity/broadband bills.
Has anybody any experience of a similar situation? Can I challenge the imposition of the council tax? I'm most afraid of contravening the deed of covenant as I have a good relationship with my neighbours who imposed it when they sold off this part of the building. Thanks!

00ec25

FairfieldLancs wrote: »

Now the council have determined that this part of the cellar constitutes a separate residence and should have its own council tax banding.

it is not "the council" who make a determination that the basement is now a "self contained annex". All council tax bandings are determined by the Valuation Office Agency and it is to them you must appeal:
https://www.tax.service.gov.uk/contact-finder-frontend/

whether your basement is indeed an annex is then down to an examination of the facts. To that end who feeds the guinea pigs or uses the vacuum are irrelevant and make you look like you are clutching at straws knowing your case is weak, particularly a comment regarding a bath when there is both a shower and kitchen in the basement. Separate entrances, separate postal arrangements, whilst not decisive, are not helpful either.

splitting a property into 2 separate council tax bands is called "disaggregation". Your appeal will therefore need to address the facts used for that assessment, read:
http://manuals.voa.gov.uk/corporate/publications/Manuals/CouncilTaxManual/council_tax_man_pn/ct-man-pn5.html

FairfieldLancs wrote: »

Has anybody any experience of a similar situation?

use the search function to find other examples, here is one to get you started:
https://forums.moneysavingexpert.com/discussion/5312223

camptownraces

Is that covenant enforcible?

How long ago was it set up, are the neighbours aware that you have a lodger? Perhaps neighbours would not try to enforce the covenant.

It does rather sound as if you have may have set up a separate "flat" in part of the cellar, without planning permission or building regulations.
I'd have thought that the council tax issue was a lesser concern in this situation. By the way, the Council Tax people don't often talk to Planning or Building Control.

Council Tax banding is determined by the valuation office - and both you and your now lodger would get 25% single person's discount on CT.

anselld

It is not the Council who determine it is a separate dwelling it is the Valuation Office Agency (VOA). Once the VOA have made that determination the Council are obliged to Tax accordingly (both properties would receive single person discount presumably).

You should have had notice of the VOA decision and the notice should have explained your right to appeal. However, it doesn't sound like you have a strong case. The fact that you may have breached a Covenant is not relevant to the VOA, neither is the fact that she uses your bath or feeds your guineapig. You would probably need to do something more severe like remove the basement shower room if you want to reverse the decision.

Jenniefour

Or removing one of the two usable kitchens. Lots of lodger have en suite's. Lodger having sole use of the downstairs kitchen is part of the problem as well (and they're not a lodger anymore either, but that's another issue). Free access for you and lodger to all the house is not relevant, unfortunately. It's about the facilities in place.

G_M

From what you have described, there should indeed be separate council tax for the basement, but as others have said, you can appeal to the VOA.

I would also doubt whether you have a 'lodger'. It is far more likely that you have a tenant, which grants considerable extra rights on the occupant, and considerable extra obligations on you.

This could only be determined by a court, so you are unlikely to find out unless either you take the occupant to court (eg for rent arrears?) or they take you to court (eg to contest an eviction or to enforce repairs, deposit registration etc).

It is unfortunate given the set-up. Like you I believe you should be able to anything pretty much (within reason!) in your own home, but ..... the law is the law.....

CIS

There is also a deed of covenant on the house which states that the property must be used a single private dwelling house.

This has no bearing on whether property is banded as more than one unit for council tax purposes.

Or removing one of the two usable kitchens. Lots of lodger have en suite's. Lodger having sole use of the downstairs kitchen is part of the problem as well (and they're not a lodger anymore either, but that's another issue). Free access for you and lodger to all the house is not relevant, unfortunately. It's about the facilities in place.

In most cases removing it can help but there are situations where it can be banded without being self-contained - it just depends on how much the valuation office want to fight it and whether they want to go down that route.