Council Tax

June 9th, 2014

SC v East Riding of Yorkshire Council and CW v East Riding of Yorkshire Council, Valuation Tribunal, 27 May 2014, were the first relating to council tax discretionary relief under the Local Government Finance Act 1992 heard since the Local Government Finance Act 1992 had replaced council tax benefit with the requirement for each local billing authority to have a council tax reduction scheme.  They provided the opportunity to consider and define the nature and scope of such appeals.  At paragraph 5 of the decision the President of the Tribunal, Professor Graham Zellick QC, noted that (i) discretionary relief is applicable both to those who have been awarded a reduction under a council tax reduction scheme and those who have not, (ii) as schemes must stipulate a procedure for applying for a reduction, authorities must consider every such application on its merits, and (iii) whereas there must be a formal published scheme for council tax reduction, there is no requirement for a scheme governing discretionary relief, unless there has been a determination that a class of case is to be reduced in accordance with that determination.

At paragraph 16 the President stated that his own Practice Statement, Council Tax Reduction Appeals, was incorrect.  It is to be amended and reissued.

At paragraph 23, the President stated that the Tribunal’s approach is the same as in every other appeal.  He stated as follows (emphasis added):-

“24.    Thus, it is for the appellant to raise doubt as to the correctness of the authority’s decision and to argue what the correct decision should have been. The authority may then defend its decision and the panel will decide the appeal on the balance of probabilities. There is no inhibition on the Tribunal’s substituting its view for that of the authority, but any such substitution must be soundly and solidly based.

25.     The following points … are designed to assist billing authorities, council tax payers and Tribunal members and clerks in dealing with these appeals:

(1)        The focus of an appeal as opposed to a review is fundamentally different: full appeal reaches further and assesses the actual merits of the decision reached.

(2)        Some deference should, however, be paid to the view of the original decision-maker and an effort made to understand how that decision was arrived at, but that cannot prevent the Tribunal from substituting its view for that of the authority provided that the Tribunal can articulate cogently why it is doing so and how it has arrived at its conclusion.

(3)        The authority’s decision does not have to be unreasonable in the Wednesburysense before it can be set aside, but the Tribunal should intervene only where there are strong grounds for doing so.

(4)        It may not be an exact parallel, but the Court of Appeal will allow an appeal against sentence only where the sentence is wrong in principle. This suggests that some restraint should be exhibited by the Tribunal before disturbing a billing authority’s decision.

(5)        Procedural defects may recede in importance, or be completely effaced, since the Tribunal will be chiefly concerned with the actual merits of the decision. Earlier defects in process may therefore be cured or superseded by the appeal, and a decision may be adjudged correct despite defects in process.

(6)        Although a scheme or policy is not required by statute, it is difficult to see how such an open-ended discretion can be satisfactorily exercised in the absence of one.

(7)        Any such policy should be scrutinised by the authority’s lawyers before promulgation.

(8)        Compliance with a formal published policy or scheme, if there is one, cannot preclude the Tribunal from allowing an appeal.

(9)        Any such scheme is not immune from challenge in the Tribunal as, for example, is a council tax reduction scheme… . It is not the Tribunal’s business to impugn any scheme as such but rather that its own powers cannot be inhibited or circumscribed by a scheme.

(10)      Failure to comply with a substantive element of a scheme to the detriment of the applicant is likely to lead to the overturning of the decision unless there are good reasons for having departed from it.

(11)      However, compliance with a scheme or policy may help in persuading the Tribunal that the original decision was correct.

(12)      The Tribunal should be slow to interfere with a decision that properly flows from a determination made under section 13A(7).

(13)      An authority cannot as a matter of law fetter its discretion and must therefore consider every application on its merits whatever the policy or scheme says.

(14)      Suppose, for example, there is a provision that non-essential expenditure should be disregarded when calculating legitimate outgoings and determining disposable income. The Tribunal could conclude that the item was wrongly so characterised and should be included. Or that on its specific facts it should be included. Thus, mobile phones might normally be treated as a luxury but might become a necessity if the appellant is a carer who might need to be contacted urgently when not at home. Or a subscription to a satellite television service might have to be accepted if the appellant is locked into a contract that pre-dates his financial difficulties.

(15)      A factor which cannot have any relevance for the Tribunal is an overall budget created by the authority for the totality of discretionary applications in a given year so that any application will be considered in relation to the available budget and once that sum is exhausted no further applications can be granted. I do not see how in law this can be a cash-limited exercise. The merits of an appeal cannot be affected by the existence of any such budget. A “budget” is in any event a somewhat artificial concept in view of the fact that the authority is forgoing income and not spending existing funds.

(16)      Where the Tribunal is minded to allow the appeal and order a recalculation but is unsure of the actual amount to substitute, the appeal may either be adjourned for the parties to supply whatever further information is needed to reach a decision or it may conclude the appeal by quashing the calculation and ordering the authority to recalculate properly. The former is likely to be the better course in most cases.”

Comments are closed.