Appeals over refusal to waive council tax liability to rise after key tribunal ruling

The Valuation Tribunal last month ruled that it has unlimited powers to overturn decisions by councils which refuse to award discretionary hardship payments.

That ruling has come from tribunal president Professor Graham Zellick in a case brought by two residents of East Riding of Yorkshire Council. Their appeals were the first relating to council tax discretionary relief heard by the tribunal since the Local Government Finance Act 2012 came into force.

Jan Luba QC of Garden Court Cambers, who acted pro bono for the appellants, said the long-standing power to reduce any resident's council tax liability to nil had been “brought into sharper focus since the abolition of the national council tax benefit last year”.

Many of the poorest working-age residents in an area will normally only qualify for a maximum discount under a local council tax reduction scheme - leaving a shortfall to pay. The discretionary power can be used to waive that balance.

Prof Zellick concluded that if a council refuses to exercise this power for a particular resident, those affected could appeal to his tribunals, which have full power to order the council to make a further – or total – reduction.

A previous tribunal practice statement, which suggested the tribunal's approach should be more limited and premised on ensuring that the discretion had been exercised lawfully in the public sense, will be withdrawn.

Accepting Luba’s arguments, Prof. Zellick said: “Mr Luba points out that there is nothing in the legislation to distinguish this category of appeal from any other and there is therefore no justification for adopting a different or more limited approach whether based on judicial review principles or otherwise. It is not unknown, or even unusual, for tribunals to be called to upon to act in this way in respect of the exercise of discretion by public bodies. They are appeals just like any other and, as Mr Luba variously put it, are subject to the Tribunal’s ‘full jurisdiction’, its ‘true appellate function’ and a ‘full merits review’.

“Clear statutory language would have been necessary to indicate that the Tribunal should deal with these appeals only on judicial review principles (cf, e.g., Regulation of Investigatory Powers Act 2000, s.67(2)). I doubt the government gave any thought to these ramifications and may now be surprised to learn of the role which the Tribunal is inescapably required to play.”

The tribunal president outlined 16 points designed to assist billing authorities, council tax payers and tribunal members and clerks in dealing with these appeals.

Luba said: "The result should prompt many more applications to councils for waiver of all council tax liability for the poorest households and many more appeals to tribunals against negative decisions."

In one of the cases, East Riding was ordered to quash its calculation in respect of the appellant's council tax liability and to recalculate that liability so as to reduce it to nil.

In the other case, Prof. Zellick rejected the appeal. Although the appellant and his wife were in "extremely hard-pressed financial circumstances", there was a very small surplus of income over expenditure and the president said there was no basis in law for interfering with the council's decision to reject the application for discretionary relief.

Mark Smulian