council tax question

[brian]

Hi there

I have just rented out my home to 3 "students" and would be grateful for some advice on council tax.

The 3 students have all signed one tenancy agreement where it states they are liable to pay the council tax, and make one single rent payment to me.

The problem is i phoned my council to stop my council tax payments, believing that the students would get in touch with the council separately to sort out out their payment themselves.

The guy from the council (liverpool) however said the rules had changed last year and that the landlord was still liable to collect the tax from the students and pay on their behalf (the rule was apparently changed to avoid the hassle the council had in chasing students themselves).

He advised me to collect their student tax exemption certificates and to take the originals to the nearest council shop whereby I would have my council tax account updated to "council tax exempt".

Until then, he said he would leave my council tax account open as it was.

I duly requested for the exemption certs but one of the "students" said that they were dropping out of a course so will not have one!

I am unsure of a few things:-

- Whether I should be the one collecting the tax for the council (as the council adviser had said) , or whether the students should be contacting the council separately

- Whether the tax payable is only a 1/3 of the amount as there are 2 out of the 3 tenants are students

I am suspecting that the council advisor has made a mistake and already judged me as being a Multiple occupancy landlord, in which case I am liable to pay the tax. But I think this is not true as there is only one tenancy agreement between the three and one rent payment?

Any advice on what I should do next would be apprecitated!!

Many thanks.

[Tax Accountant]

Not my area but I believe that it is not your responsibility to do what you have been asked to do.

You should write to the council and attach a copy of the tenancy agreement and insist that your council tax account is stopped at the date the letting commenced.

Ramnik

[MrShed]

OK.....basically, bullshit. You certainly do not have a responsibility to collect the tax. I believe you may have a responsibility to supply the tenants details to the council, but that is it. And, no the tax is not 1/3rd. The tax is basically full council tax, minus a single occupant discount(as there is only a single occupant eligible to pay the council tax).

I apologise if I am incorrect here, but this is certainly the case in Newcastle as of around 4 weeks ago.

[stu]

I've had this issue, basically if they are all students and can provide evidence (a letter from the uni) then they are exempt. If all professional they are liable for council tax, if a mixture of the two it depends on the agreement, from what i understand you have 1 agreement with 1 payment, if one moves out do the remaining 2 pay extra to make up the short ful - if so the tenants are liable. If no, the landlord is liable but it is OK to claim the costs back from the tenants.

I supply details of the tenants to the council tax dept and are on the system as the landlord and the tenants as tenants.

Check out http://www.local.dtlr.gov.uk/finance/ctax/pays.htm thats what I used to contest the council and won due to my tenancy agrement and after speaking to the customer services manager in the council tax department.

HTH

Cheers

Stu

[brian]

Thanks for all the advice guys. From what you've all said and from other advice I've had it seems the general consensus is that the council chap was talking out his rear. Probably sensed that I was a new landlord and thought he would try it on. I'm going to phone them to stop my account tax account and let them know the tenants names, fully knowing the rules to back me up.

I honestly thought the council, of all people, would give me impartial advice - I guess you can spot I'm a new landlord from a mile!

Cheers.

[Tax Accountant]

If you contact the Council, best do it in writing. This way there is no misunderstanding or misinterpretation of what you said and what they said. They will also need to be much careful as to what they say to you because their reply will be on record.

You should also send a copy of the tenancy agreement with your letter.

Ramnik

Ramnik

[brian]

Hi guys

Having wrote the council a letter (attaching copy of AST and 2
student exemption certs) to tell them to stop billing me for council
tax and giving them the 3 tenants names, I have just received a
letter back from the Council telling me that as "the property is multi occupied, you as the owner will remain liable for Council Tax" .

Question1 :
The council regards my house as a HMO - but I'm not sure it is. Is it worth disputing with them? Do I have a case, given that:-

- its a 3 bedroom terraced house which I was living in myself
- the tenants all signed one AST agreement at the same time
- They are friends and all moved in at the same time
- They send me one single payment in rent from one of tenant's bank accounts and its their responsibility
to make up any payment shortfall
- The are all jointly responsible for the whole house and not just
individual rooms
- There are not locks on their individual rooms.

Which of the above points are valid and so I should include to argue my case?

Question 2 : I may decide to just go with it and let them classify my house as a HMO (although this will probably give me more grief in the future??) and therefore try to get the tenants to pay the council tax through increased rent.

But what is the best way to increase rent ? I would like to just rewrite the existing contract with the new rent (obviously with their agreement), and tear up the original - but something tells me its not as simple as that? Also, is it possible to make the contract 8 months in duration so it ends at the same date as the original??

Thanks again for your counsel!

[Tax Accountant]

As far as I can see, this definitely isn't a HMO.

I would write back to the council and ask them why they consider this to be a HMO, bearing in mind the points listed by you above.

Ramnik.