Self-employed people on low income will be eligible for council tax discount

Lewes council leaders have backed proposals to make major changes to the authority’s council tax collections.

Tuesday, 29th October 2019, 4:00 pm
Council tax bill

At a cabinet meeting on Monday (October 28), Lewes District Council’s cabinet backed proposals to abolish a one-month discount, which some taxpayers can receive if their property is both empty and unfurnished.

At the same time the council would trial a scheme to provide an additional council tax discount for self-employed people on low income  – a discount which is already available for other people with a low income.

Both proposals would be subject to approval at a full council vote following a public consultation. 

Zoe Nicholson, Green leader of the council, announced the changes

In a statement released after the meeting, Lewes council leader Zoe Nicholson said: “The assumed minimum income floor that is used for calculating benefits leaves some of our most worse off residents facing severe day-to-day challenges.

“Our decision puts in place extra funding to help self-employed claimants, while also discouraging property owners from leaving the homes they own empty.

“There are too many people in society who are struggling to afford even the most basic essentials, things that most are able to take for granted. 

“Our scope as a local authority to address this imbalance is limited due to the cuts in funding we receive from central government. 

“However, the Co-operative Alliance at Lewes District Council will do everything possible to make the lives of local people in need, a little less challenging than they are now.”

According to council documents, abolishing the empty property discount for Class C homes is expected to generate around £28,000 of additional income for Lewes District Council.

People who have moved into a care home or hospital will not be affected by the change in discount arrangements. Similarly, the discounts registered social landlords receive will not change.

The additional money expected from abolishing the discount would be used allow self-employed people to claim a greater reduction in their council tax bill.

Currently, people who have been self-employed for more than 12 months are assumed to be earning at least £200 per week, known as the minimum-income floor, when they apply for a reduction to their council tax bill.

Under the proposed pilot scheme, which would start on 1 April 2020, the authority would examine a claimant’s actual income instead.

While supported by members of the council’s cabinet – controlled by a cross-party Co-operative Alliance – some concerns were aired by members of the Conservative group about the proposals.

Conservative group leader Isabelle Linington said: “We are not sure about this because under the previous administration we always kept the minimum income floor. But we are happy to see it is a pilot, so we will be interested to see how it goes.

“I think one of our worries is that it is open to abuse. People may be claiming they are self-employed but are they actually properly trying to do it as a job or are they making out that they are doing it just to get the discount.”

Cabinet members, however, argued there would be significant checks as part of the discount process. 

They also argued the pilot would help to improve the council’s understanding of the impact of the scheme.

Cllr Nicholson said: “I think the type of people we are talking about  are likely to be women who are working part time. They might be child carers or they might be dog walkers who are doing self-employment because there isn’t any other option.

“What seems unfair to us is that the previous system said that if you are employed and on that income we will give a discount, but if you are self-employed then we won’t.

“We are trying to implement something that feels to us like it is prudent. During this year, we will understand what the size of the impact of that might be to then bring forward into the council tax scheme for 2021/22.”

During the meeting, cabinet members also gave their backing to adopt the current Local Council Tax Reduction Scheme for 2020/2021, subject to approval by full council. 

The cost of the scheme is somewhere in the region of £6.5m in lost income, although it is likely to increase in line with any rises in council tax. 

Details of the public consultation on this change in council tax discount are available on the council website