Correspondence

Council Tax information letter 4/2023: Updates on HMOs, Homes for Ukraine & infected blood compensation

Published 23 November 2023

Applies to England

To: Local authorities in England - For the attention of the Council Tax section

From: Local Taxation Division, Department for Levelling Up, Housing and Communities (council.tax@levellingup.gov.uk)

Date: 23 November 2023

Support for HMO tenants facing hardship because of council tax demands

On 8 November, the Department issued a letter regarding changes to regulations for HMOs to ensure that they will be valued as a single dwelling. The Department recognises that some HMO tenants may have suffered financial hardship as a result of council tax being charged on individual rooms in HMOs. In cases where the property has been re-banded into multiple bands, tenants may be unaware about the change in their council tax liability and may be in arrears. In such circumstances, councils may wish to consider using the discretionary powers under section 13A(1)(c) of the Local Government Finance Act 1992 to apply a discount to tenants’ liability. In all cases, councils should work with bill payers to agree affordable and sustainable payment plans.

Infected blood compensation payments

As per the Department’s letter of 21 October 2022, councils are reminded that additional individuals may receive infected blood compensation payments on an ad-hoc basis following registration with the relevant UK infected blood support scheme.

The Council Tax Reduction Schemes (Prescribed Requirements) (England) Regulations 2012 as amended by The Council Tax Reduction Schemes (Amendment) (England) Regulations 2017 allows for many of these payments to be disregarded when assessing a pension age applicant’s entitlement to council tax  support.

On 30 August 2023 the Social Security (Infected Blood Capital Disregard) (Amendment) Regulations 2023 came into force. These regulations create a capital disregard in certain benefits for payments from a deceased person’s estate to their son, daughter, step-son or step-daughter, which derive from an Infected Blood compensation scheme. The disregard does not apply to local council tax support schemes and will be considered as part of the annual update which the Department undertakes.

Where local council tax support schemes for people of working or pension age do not contain a disregard, it is open to billing authorities to use their discretionary discount powers under the s13A(1)(c) of the Local Government Finance Act 1992 to offset the impact of the payment on an applicant’s claim.

Homes for Ukraine individuals and accommodation arrangements

On 11 April 2022, regulations were laid (that came into force on 12 April 2022) so that people holding a Homes for Ukraine (HfU) immigration permission were disregarded for the purposes of determining council tax discounts. This ensured that sponsors would retain any council tax discount they were receiving in the event their home was also occupied by holder of a HfU immigration permission. Where a household is formed of individuals who are all disregarded, they are eligible for a 50% reduction on their council tax bill. ^{[footnote 1]}

The Department has received correspondence in relation to individuals with a HfU immigration permission who are making separate arrangements for their accommodation while residing in England and who are therefore no longer living with a sponsor. The discount disregard continues to apply to such people for as long as they hold the relevant immigration permission, and their council tax liability should take account of this. 

Should you have any queries on any of these matters, please contact the Department at: council.tax@levellingup.gov.uk.

1. Except in the case of households only comprising disregarded students or persons with an SMI, in which case the dwelling becomes exempt from council tax. ↩