I recently moved out of my old apartment located in the City of London. I am now based in Westminster. As a result, I now have to pay my council tax to Westminster City Council.
Virtually all councils will offer various means and methods of payments to settle your council tax bill. Monthly direct debit tends to be a very popular option.
I thought I would be “responsible” and pay my 2019/2020 council tax bill upfront, in full, this year. Therefore, when I received the bill in April, I promptly paid the full amount, which amounted to a hefty £1,215.82. Note this included the 25% discount for a single occupier. The original bill was £1,621.10.
Moving out: a quick overview of the basics
As most people may already know, council tax is managed by the relevant council, which depends on where you reside. Council tax is not collected on a national level by HMRC.
As a result, when you move out from one council to another, you need to close your existing council tax account and open a new one with the council where you moved to.
If you paid your council tax in full at the beginning of the tax year, you will need to claim a refund from your existing council (i.e. the local authority where you existing home is located). You would hope that they could make the process easy. It’s a pretty common thing for people to regularly move in and move out from one council to another. Think again…
Filling out the moving out (also known as the “Vacating Occupier Form”)
First, you need to fill out the form notifying the authority that you are moving out of perimeter. For some councils, you may be able to do so online. For others – such as the City of London – they are more old school and you need to email them a form. Below is an example:
Most of the form is fairly self-explanatory although a bit tedious to fill out. There are two sections that I found confusing: (3) State the exact date you stopped residing at the property and State the exact date for the expiry of your tenancy.
In many cases, those two dates will probably be the same. You will move out right at the end of the tenancy (to avoid paying rent twice for instance).
However, I did not have that option for multiple reasons, one of which was that my new landlord was keen to have me moving in as soon as possible. Therefore, I moved out on 11 July but my tenancy technically expired on 4 August.
I filled out the form without overthinking this any further.
Time to claim the refund
A few days later, I received an email from a council tax officer telling me that I owed money. I was stunned and told them that I had already paid the council tax bill in full. I indicated the date of the wire transfer. It turns out he had made a mistake and promised to revert promptly.
Ok, fine, mistakes happen I guess.
He emailed me again and told me that I had to fill out another form to claim the refund. So here is the first trick. You need to claim the refund, which requires you to take action. Do not sit around thinking that the council authority will refund you automatically.
Yes I know. They probably already have you account details and can calculate the refund. Still, you need to make the claim. Below is the form.
I promptly filled out the form and sent it to the officer by email.
The officer had mentioned in the email the refund that I should receive. It wasn’t exactly the amount I had calculated. The discrepancy was huge (approximately £40) but I wanted to understand his calculations. I know, I’m a geek.
So I emailed him. And then I waited, waited and waited again…
Three weeks later, I received a detailed response. As a matter of transparency, below is the response (which I have anonymized for everyone’s privacy!).
The pro rata calculations are pretty standard. But one thing did shock me.
Notice how the officer removed the benefit of the 25% single person discount from 11 July 2019 to 4 August 2019. The status of the property changes. The property is now deemed to be a Second Home Class B (!) for which no discount is available. This is what was causing the discrepancy with my calculations.
Am I the only one thinking this is unfair?
Here are a few observations on this.
First, it’s now very clear why they ask for the expiry date of your tenancy and the date on which you vacated the property. Essentially, in most cases, you will be liable for the council tax until the end of your tenancy (and not just the day on which you vacated the property). However, you will lose the single occupier discount from the date you stopped residing at the property.
Second, this strikes me as particularly unfair for two reasons. Nowhere is this explained or advertised in advance so it is hard to plan in accordance with rules no one knows about. Also, if you had to move out early, that’s probably because you didn’t have a choice. After all, who likes paying for an empty apartment? Losing that one benefit may not be the end of the world for most people, but it’s another hit to your wallet at a time where many expenses are incurred in connection with the move. When you have to pay for movers, a new deposit, and settle utility bills, the last thing you need is for your council tax refund to be reduced out of nowhere.
Third, this rule incentivizes dishonest behaviors. There is no reason to be truthful and state that you moved out of the property early if that will lead you to losing a key benefit. You might as well ensure that the date on which you stopped residing at the property always matches the date of the end of your tenancy. Even if it’s not true.
Conclusion
Council tax bills are already increasing across the country, and especially in London. I understand that some of those increases are meant to fund social care and other necessary services provided by councils.
However, I don’t think that councils should try to screw residents also. I thought I was doing them a favor by paying the council tax upfront in one payment (which is ideal in terms of cash collection for councils). I don’t think it was necessary to take away the single occupier discount in this precise instance. Now, I pay council tax on a monthly basis by direct debit. What’s the point of paying everything in advance if you have to overcome multiple obstacles to get a refund?
In the end, it took a solid two months from the moment I sent the form to the day I received the refund in my bank account. That delay also seems quite unnecessary. Surely councils can do a better job at handling what is a fairly routine task.
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