Ctax, How much am I liable to pay back?

himalayasalt

Hi, very short summary of the situation. In July 2016 moved into a property in the uk after 10 years oversees. A tenant living here when I arrived had been paying council tax (the previous landlord, now deceased, gave him a favourable rent with the understanding that he cover ctax) and when I moved in said he was paying the full amount. There's never been anything to suggest otherwise. It's my name on utilities, internet and i'm registered to vote here; never hidden that i'm here... but it was my understanding that ctax is per household and as long as someone is paying it in full, there's no issues. Now the more complicated part: In September 2017 I became owner of the property.

It has recently come to light that he has been claiming single person discount on the ctax.

Now I understand the council will need to be repaid this 25%. My question is, am I liable for tenant's false reporting of single person status before I moved to this country? At that time I was not owner nor had any links to the property and hadn't been on UK soil for 10 years. Because he has never lived alone here for years prior to my arrival but was claiming the single person discount, that could be a hefty bill. Rough guess: maybe 5 years of living here prior and falsely claiming single person ctax. As owner i'd rather not be liable for that, but am ok with paying back the council 25% monthly for all the months since July 2016.

Last Q.. Can I be prosecuted for fraud and/or fined? I didn't knowingly cheat the council and want to sort it out swiftly, but also without undue punishment for his deception to me and the council.

Ty.

CIS

himalayasalt wrote: »

Hi, very short summary of the situation. In July 2016 moved into a property in the uk after 10 years oversees. A tenant living here when I arrived had been paying council tax (the previous landlord, now deceased, gave him a favourable rent with the understanding that he cover ctax) and when I moved in said he was paying the full amount. There's never been anything to suggest otherwise. It's my name on utilities, internet and i'm registered to vote here; never hidden that i'm here... but it was my understanding that ctax is per household and as long as someone is paying it in full, there's no issues. Now the more complicated part: In September 2017 I became owner of the property.

It has recently come to light that he has been claiming single person discount on the ctax.

Now I understand the council will need to be repaid this 25%. My question is, am I liable for tenant's false reporting of single person status before I moved to this country? At that time I was not owner nor had any links to the property and hadn't been on UK soil for 10 years. Because he has never lived alone here for years prior to my arrival but was claiming the single person discount, that could be a hefty bill. Rough guess: maybe 5 years of living here prior and falsely claiming single person ctax. As owner i'd rather not be liable for that, but am ok with paying back the council 25% monthly for all the months since July 2016.

Last Q.. Can I be prosecuted for fraud and/or fined? I didn't knowingly cheat the council and want to sort it out swiftly, but also without undue punishment for his deception to me and the council.

Ty.

The key question in all of this for July 16 to Sep 17 is - Were you a joint tenant on the whole property alongside the other person and held a joint rental liability ?


You cannot be responsible for any council tax issues prior to you moving in.

himalayasalt

July 16 to Sep 17 I was just here... there was never a tenancy agreement between the deceased owner/landlord and the tenant already living here (this led to other troubles) like that tenant not paying utilities, but having them auto-debited from my mothers bank account for 3 years after she passed away; without anyone else realising; why pay utilities if your dead landlord does? This was his approach. On a side-note he also stopped paying rent altogether for 12 months during this three-year window when he had no-one to hold him accountable, but this was caught eventually by the executor of the estate. I moved in after this three-year-window which went from 2014 to 2016, but he continued deceiving about utilities until late 2017; hence i was hit by a bill when I put utility in my name after I noticed energy company letters arriving here with my mother's name on them (her bank account was finally closed down by the estate at this exact time).

I didn't have to make a tenancy agreement as it is a family owned property (although under control of the estate) so I was simply welcome here by being related family. As I was going to inherit the property I did not have to pay myself rent either or the estate rent.

I've already paid 2k in unpaid utilities that were of his own making; now there's this ctax... it's hard not to get angry at this person, but with ctax I believe I am on the hook. It could have been avoided if i'd have phoned the council the week after I moved in to make it clear I am living here. I just saw no reason to do so under the assumption that it was being paid in full. So, i'm not avoiding that responsibility.What I don't want is to have to pay a fine in addition to repayment of the 25%, or to have fraud charges against me.

So basically the thing that is a real red line for me, given the circumstances and the ongoing deception regarding ctax and utilities and in general with this person's attitude of 'screwing dead ppl over to save a dime', is being penalised beyond repayment of that 25% over how ever many months. Apologies if that comes across as a rant, I am quite scared and also angry over this.

Without a fine i'm thinking i'll have to pay the council about 1200 quid to make things right based on the council tax band. If it went to court I have plentiful evidence that this is a fundamentally dishonest person, and that would give credence to the argument I make in my defence, which is that he deceived me into thinking that ctax was being paid in full. I would take it to court if I were asked by the council to pay a fine, most definitely. Given that he's screwed over the council for years with three other adults living with him here before I came, I would hope that the council chases up on that too.

00ec25

Please read this carefully, you are potentially in trouble if the council takes this all the way. Council tax liability is rigidly defined as a "Hierarchy of liability". Under which the most liable is no 1, if there is no no1, then no 2 becomes liable, etc until you reach no 6

1. A resident freeholder (so for owner-occupied property the owner is liable)
2. A resident leaseholder (this includes assured tenants under the housing act 1988)
3. A resident statutory or secure tenant
4. A resident licensee (this does NOT mean a lodger)
5. A resident (eg squatter)
6. The owner (this applies where the dwelling has no residents)

the only exception to the above is where there is a council tax House in Multiple Occupation (HMO). Where it is a CT HMO, the landlord is the ONLY person who is liable.
There are 2 instances where that applies:

a) where there is a resident landlord who has one or more lodgers. The LL is liable, the lodger is not (ever)
b) where the property is let as an HMO, so each tenant has their own tenancy agreement for a specific room only, not the whole property. They then have access to common parts (eg kitchen, bathroom etc). The LL is liable, none of the tenants are liable (ever)

IN YOUR CASE
before Sept 16
you are not liable when you were not in the UK, please retain a grip on reality. You do not say if the deceased was a resident LL? If not, it would appear the tenant was correctly paying CT as No 2: a liable resident tenant (and perfectly entitled to claim SPD)


between Sept 16 - Sept 17 The "fact" the LL "did a deal" with his original tenant so the tenant paid the CT may have been perfectly correct at the time, but not from the date you moved in. From that date it comes down to what was the actual tenancy position ...??

Did you a) pay rent to the other tenant or b) pay rent to the (now deceased) owner/tenant's LL?
if a) the tenant is legally liable for the whole rent and as he continued to claim single person discount he is guilty of tax fraud and the council can prosecute him. You have no liability at all to the council as it was a CT HMO
if b) the position depends entirely on what tenancy agreement existed between the owner, the existing tenant, and you.
- If you were each on your own tenancy agreements it was a CT HMO and the deceased LL is liable. You, as tenants of the LL, have no liability to the council at all.
- on the other hand if you and the tenant were on a joint tenancy and rented the entire property between the pair of you, then you are each liable for 100% of the bill since you are both liable as No2 resident tenants. Note carefully, CT liability is "joint and several" liability, ie 100% for each person, it is not 50/50 if there are 2 of you. In that case the council can prosecute either you or your flatmate for council tax fraud for claiming 25% SPD that "you" were not entitled to have. In reality the council will be primarily interested in getting its money, they will chase whoever they can find easiest, you or him. If him and he pays up that is the end of it. If you and you pay up the council will go away, leaving you to "extract" the money from him by whatever means you can



from Sept 17 it appears you were a resident LL with a lodger. You are therefore liable for the WHOLE tax from that date. Technically if the other person has paid any CT from that date, the council should refund him in full for whatever he paid, and then chase you for 100% of the tax. Whether you can extract any money from the tenant for his "share" is then a matter of a contract law dispute between you as LL and your tenant. Your tenant was paying you rent. That rent is money you can use however you want, unless you contract specifically states + tax, then you cannot subsequently ask for tax as well as rent.

00ec25

ok i see you posted whilst i was writing

whilst your mother was alive was she the resident LL and the other person was a lodger, not a tenant? Or was this simply a property she owned and let out to tenants? If so under what terms, tenancy of the whole property or just a single room since you now refer to him having occupied the property with other people as well.

your position upon moving in needs further clarification. You say the estate was in administration, who did the will leave the property to? You? Why did it take so long for you to be legally named as owner - you say you purchased the property so was it left to several beneficiaries and you bought them out?

himalayasalt

before Sept 16
you are not liable when you were not in the UK, please retain a grip on reality. You do not say if the deceased was a resident LL? If not, it would appear the tenant was correctly paying CT as No 2: a liable resident tenant (and perfectly entitled to claim SPD)

He has another working adult living with him prior to Sept 16.

between Sept 16 - Sept 17

A bit over my head. I've tried to explain the situation in my second post.

from Sept 17 it appears you were a resident LL with a lodger. You are therefore liable for the WHOLE tax from that date. Technically if the other person has paid any CT from that date, the council should refund him in full for whatever he paid, and then chase you for 100% of the tax.

Is the council likely to insist upon refunding him? That also means I've been cheated out of rent since his rent is low to account for ctax (might not be a legal argument but how many people are aware of this?).

himalayasalt

ok i see you posted whilst i was writing

whilst your mother was alive it appears she was the resident LL and the other person was a lodger, not a tenant

once she was dead , the person ceased to be a lodger and became a tenant, making him liable for CT as NO2 , resident tenant

your position upon moving in needs further clarification. You say the estate was in administration, who did the will leave the property to? You? Why did it take so long for you to be legally named as owner?

My mother never lived here, she was a rich woman with multiple properties. I believe for the better part of a decade it was just rented out casually to 'friends of family' without any tenancy agreements. Everyone renting here would have been a casual agreement such as my mother asking this particular tenant to pay her extra for utilities on top of rent and cover his own ctax. If that wasn't legal, well we can't lock up the landlord now.

The property wasn't left to me in the will, it was gifted to me eventually as other beneficiaries received a lot and I had gotten nothing.. a family decision and it took time.

What I can gather so far: so pre me moving in I've no responsibility. Between late 2016 and late 2017, it's uncertain, and post 2017 he gets a full refund.

So I have to pay possibly 25% for the first period, full for the second (with him getting an xmas gift of cash) and a fine for me and a fraud conviction for me. All because a deceitful scumbag wanted to save 30 quid a month with a dishonest 25% discount? He knew it was dishonest.. he lied to the council long before I turned up. Do courts/council here take into account circumstances? And i'm willing to pay the 25%.

00ec25

himalayasalt wrote: »

My mother never lived here, she was a rich woman with multiple properties. I believe for the better part of a decade it was just rented out casually to 'friends of family' without any tenancy agreements. Everyone done would have been a casual agreement such as my mother asking this particular tenant to pay her extra for utilities on top of rent and cover his own ctax.

The property wasn't left to me in the will, it was gifted to me eventually.

ok so it was a let property and the occupants were liable for their own CT

as there was no written tenancy agreement (you think) it will be deemed to be a single joint and several tenancy meaning he is guilty of CT fraud if he claimed SPD whilst living there with others. It is his claim and his liability

from the date you moved in you became equally liable for the CT since you were not the LL . Pay the bill and avoid court. if you do get taken to court (unlikely if the bill is paid) you can, from what you say, show it was not you who made the claim so he'll be the one who gets prosecuted, not you. But as I say, getting that far is very unlikely unless you want to get the council to make an example of him (for his own good, sounds like he needs a lesson)

from Sept 17 you are liable as you live there and it is a CT HMO
whether the council will make a refund depends on their attitude. Legally they must. Pragmatically they probably wont; since it makes a lot of work refunding then collecting the same money back in but from you instead. In today's world of councils facing great pressure, they shouldn't end up doing extra work for the sake of no extra money

PS if this is above your head then not sure why you posted, because this is the legal position. go pay a lawyer if you prefer.

00ec25

himalayasalt wrote: »

So I have to pay possibly 25% for the first period, full for the second (with him getting an xmas gift of cash) and a fine for me and a fraud conviction for me. All because a deceitful scumbag wanted to save 30 quid a month with a dishonest 25% discount? He knew it was dishonest.. he lied to the council long before I turned up. Do courts/council here take into account circumstances? And i'm willing to pay the 25%.

ranting when you know nothing is pointless

of course that will not happen. You are not the criminal, he is

himalayasalt

ok so it was a let property and the occupants were liable for their own CT

as there was no written tenancy agreement (you think) it will be deemed to be a single joint and several tenancy meaning he is guilty of CT fraud if he claimed SPD whilst living there with others. It is his claim and his liability

from the date you moved in you became equally liable for the CT since you were not the LL . Pay the bill and avoid court. if you do get taken to court (unlikely if the bill is paid) you can, from what you say, show it was not you who made the claim so he'll be the one who gets prosecuted, not you. But as I say, getting that far is very unlikely unless you want to get the council to make an example of him (for his own good, sounds like he needs a lesson)

from Sept 17 you are liable as you live there and it is a CT HMO
whether the council will make a refund depends on their attitude. Legally they must. Pragmatically they probably wont; since it makes a lot of work refunding then collecting the same money back in but from you instead. In today's world of councils facing great pressure, they shouldn't end up doing extra work for the sake of no extra money

PS if this is above your head then not sure why you posted, because this is the legal position. go pay a lawyer if you prefer.

Ok thanks that is pretty clear. It's above my head because I only just found out and there's a lot of ground to cover.

I'm still wondering who has to pay the 1k fine. I feel like I will end up paying 3k plus to 'make it go away' and the tenant will get a gift of 1600 with no repercussions. As a human I feel that is unfair and an extra fine would take me to 'I want to go to court' mode. Over the fine issue, not the rest. He's got away with so much and now to get a windfall on top of that is a hard pill to swallow, but my liability is my liability. Still surely it is the one committing the fraud that should pay any fine.

00ec25

himalayasalt wrote: »

I'm still wondering who has to pay the 1k fine.

you are ranting again. what fine? have you been to court and been prosecuted? NO there is no fine

take a deep breath and start again
from July 16 you and he lived in the same property. 100% council tax would be due. Only 75% was paid.

you were the person who moved in and thus you "caused" the extra 25%, so one way of looking at it is you, and you alone, should pay the 25% as it is all your "fault". You will still get a bargain because one way of looking at it would be you would each contribute 50% of the CT so that it gets paid in full by the pair of you. That is the norm for how co-tenants split bills isn't it. You have therefore saved 25% yourself anyway since it is only costing you the remaining 25% now. you were not paying rent to him so he has not done you over.

what happened before Jul 16 is not your problem.
By all means tell the council, ney even forcefully encourage them to take action against him, for he did commit fraud and should suffer repercussions from it. Naturally you can then expect the living circumstances between you and him sharing a property to be rather tense...
why have you not started eviction proceedings, since you say he is not only a council tax fraudster, but also defrauded your mother's estate?