Executive to close council tax legal loophole

Those receiving Housing Support or living in certain shared dwellings will not pay

News, 17 July 2006

The Scottish Executive has moved to close a legal loophole which meant that certain vulnerable people were asked to pay council tax following recent new legislation.

An unintended consequence of new care legislation meant certain people who are in receipt of a housing support service and living in certain defined shared dwellings were asked to pay council tax, when previously they had no local tax liability.

Legislation has now been laid in the Parliament which will close the loophole and exempt relevant properties from local taxation altogether. It is planned to come into force on 1 October 2006.

Ministers have also asked all local authorities to write off any council tax debt to people affected - and to grant refunds to those who have already paid.

Tom McCabe, the minister for finance and public service reform, said: "We will ensure the loophole is closed - and that no-one is one penny out of pocket as a result of it.

"I hope this reassures those people we are doing all we can to help them to live a secure and independent life. It has taken longer than we would have liked to resolve this as it is so complex, but I am satisfied we are announcing a solution which will be welcomed by all concerned."

Ministers have now asked all Scottish local authorities to write-off any council tax debt due from residents with a tenancy agreement or license to only occupy part of a dwelling, and in receipt of a housing support service, and where the kitchen toilet or bathroom is shared. For those who have already paid their council tax bills a refund will be granted.

Following the write-off/refund, the Executive will provide a specific grant to each local authority to cover the full costs, including water and sewerage charges.