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Change in legislation needed for second homeowners avoiding council tax
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Scarborough Council has met to discuss approaching the Government about the current issue with second homeowners avoiding council tax.
Along with other councils, the authority is concerned about the flaw in the tax system that allows people to register second homes as businesses in order to claim relief from tax payments.
A report from the Council states that these homeowners “pay no taxation whatsoever into the local economy as they are eligible for the property to be assessed under the business rates legislation and can then apply for small business rates relief”.
Councillor Steve Siddons, leader of Scarborough Council, looks to work with South Hams, North Norfolk, the Isles of Scilly, South Lakeland, Dorset and Cornwall councils to lobby the Government for a change in legislation. He believes that it is necessary for self-catering accommodation to be taxed solely through the council tax system.
Councillor Siddons highlighted that the authority is missing out on vast sums of money, with conservative estimates putting the figure of avoided council tax at £2.56m a year. Scarborough Council would keep approximately £330,000 of this.
Councillor Siddons has commented: “People are using this loophole to avoid paying any kind of council tax at all, I’m sure this is not the way the Government intended the system to work.
“My opinion is that if you are using services then you should be paying for them. There will be some people who are honest and are paying tax but we know there are others who are not.
“There are a number of loopholes that people can use to manipulate the system avoid paying council tax and we would like to see those closed. There are a number of loopholes that people can use to manipulate the system avoid paying council tax and we would like to see those closed.”
