Council Tax Blow!

[richo106]

Thank you @Adsibobyes I was just worried that the payment might bounce and be negative impact.

 

Thanks @ProDave

 

Does getting my property getting removed from the council tax list/band affect anything to do with my VAT reclaim as I using the conversion forms as being empty for over 10 years 

[Adsibob]

1 hour ago, richo106 said:

Thank you @Adsibobyes I was just worried that the payment might bounce and be negative impact.

So if you don't have enough money in your account to cover the direct debit on 3rd Jan, there are two options:

1. Your bank decides to let you use an unauthorised overdraft. They charge a lot for this, but it is unlikely they would do this if the shortfall was more than £500 or £1000, depends hat you authorised overdraft is.
2. Your bank doesn't process the direct debit because of insufficient funds.

You certainly want to avoid the first of these options, because according to Experian, which is a credit information provider (amongst other things) "Regularly using an unarranged overdraft can affect your credit rating because it shows potential lenders that you struggle to manage your finances." It's also just bloody expensive. Natwest's current interest rate is close to 40% EAR. 

 

You have no control over whether the bank does (1) or (2). Hence my advice earlier in the thread that you should try calling them today and tomorrow to instruct them to cancel the direct debit, or better still log on to online banking and cancel it yourself. If you cancel it today I think you might just be in time. If none of those ork because of the festive period, call their fraud line and just say you think the Council is cheating you out of money and you want the fraud team to cancel the direct debit. Possession is nine tenths of the law, so just easier to win your dispute with the council if the money is in your account, than to have to force them to credit or refund you.

 

1 hour ago, richo106 said:

 

 

@ProDave

 

Does getting my property getting removed from the council tax list/band affect anything to do with my VAT reclaim as I using the conversion forms as being empty for over 10 years 

I don't know the answer to this, but I doubt it. VAT and council tax are two separate taxes collected by different agencies of state (HMRC in the former and your local council in the case of the latter). The chances of those two agencies being joined up is minimal. But others who are familiar with the VAT reclaim process may be able to advise. I just can't see any public policy reason as to why one relates to the other.

[saveasteading]

Council officers tend not to be vindictive. Assume they are being fair, but don't know the circumstances.

 

Don't pay anything but do write, politely, and reasonably and urgently. Old fashioned copy in the post with recorded delivery.

First: you don't believe that there is any tax to pay.

Explain the timescale of your ownership, at what stages and why it was uninhabitable, esp roof off.

 

and that you are happy to discuss further and look forward to hearing from them....and meanwhile are not paying anything.

 

 

 

 

 

[Adsibob]

8 minutes ago, saveasteading said:

Council officers tend not to be vindictive. Assume they are being fair, but don't know the circumstances.

 

Don't pay anything but do write, politely, and reasonably and urgently. Old fashioned copy in the post with recorded delivery.

First: you don't believe that there is any tax to pay.

Explain the timescale of your ownership, at what stages and why it was uninhabitable, esp roof off.

 

and that you are happy to discuss further and look forward to hearing from them....and meanwhile are not paying anything.

 

 

 

 

 

Plus 1

[PeterW]

1 hour ago, richo106 said:

 

Does getting my property getting removed from the council tax list/band affect anything to do with my VAT reclaim as I using the conversion forms as being empty for over 10 years 

Define “empty”, as it has to have not been used as a domestic dwelling, or had CT paid on it, and not part of another domestic curtilage  for 10 years to be exempt. You may also require a sworn statement from previous owners.

 

The “empty house conversion” clause in VAT reclaims is one of the hardest to convince HMRC to accept - I have tried (and failed..!) and that was for a garage conversion that never had a car in it for 12 years and was used as storage for a business.

[richo106]

23 minutes ago, PeterW said:

Define “empty”, as it has to have not been used as a domestic dwelling, or had CT paid on it, and not part of another domestic curtilage  for 10 years to be exempt. You may also require a sworn statement from previous owners.

 

The “empty house conversion” clause in VAT reclaims is one of the hardest to convince HMRC to accept - I have tried (and failed..!) and that was for a garage conversion that never had a car in it for 12 years and was used as storage for a business.

I have a letter from the councils empty homes officer saying this property has been empty since December 2009. That and now the council trying to charge me this would hopefully be sufficient evidence 

[richo106]

39 minutes ago, Adsibob said:

So if you don't have enough money in your account to cover the direct debit on 3rd Jan, there are two options:

1. Your bank decides to let you use an unauthorised overdraft. They charge a lot for this, but it is unlikely they would do this if the shortfall was more than £500 or £1000, depends hat you authorised overdraft is.
2. Your bank doesn't process the direct debit because of insufficient funds.

You certainly want to avoid the first of these options, because according to Experian, which is a credit information provider (amongst other things) "Regularly using an unarranged overdraft can affect your credit rating because it shows potential lenders that you struggle to manage your finances." It's also just bloody expensive. Natwest's current interest rate is close to 40% EAR. 

 

You have no control over whether the bank does (1) or (2). Hence my advice earlier in the thread that you should try calling them today and tomorrow to instruct them to cancel the direct debit, or better still log on to online banking and cancel it yourself. If you cancel it today I think you might just be in time. If none of those ork because of the festive period, call their fraud line and just say you think the Council is cheating you out of money and you want the fraud team to cancel the direct debit. Possession is nine tenths of the law, so just easier to win your dispute with the council if the money is in your account, than to have to force them to credit or refund you.

 

I don't know the answer to this, but I doubt it. VAT and council tax are two separate taxes collected by different agencies of state (HMRC in the former and your local council in the case of the latter). The chances of those two agencies being joined up is minimal. But others who are familiar with the VAT reclaim process may be able to advise. I just can't see any public policy reason as to why one relates to the other.

As this comes out of the joint/bills account there will be around £2k in there with £500 overdraft. No where near the the £11.7k it looks like they are planning to take 

[Adsibob]

3 hours ago, richo106 said:

As this comes out of the joint/bills account there will be around £2k in there with £500 overdraft. No where near the the £11.7k it looks like they are planning to take 

Well hopefully a simple matter of logging onto your online account and cancelling the direct debit, but you usually need to do it at least 24h in advance, so get cracking if you've not done it already.

[pilgrim]

@richo106 was your house left totally empty? or was any furniture left in the house?

I had exactly the same situation as you but the law says the house has to be left unoccupied AND unfurnished to be liable for the 300% premium. 

My house was left with some furniture in it so I was able to successfully argue this with the council and eventually got the premium removed but it took a few months and the threat of court action before they finally backed down.  

[richo106]

The house was left furnished, well full of furniture when we bought it. The previous owners then cleared the property 2 weeks after we completed

[richo106]

Has any body dealt with the valuation agency? I feel if I can prove it was ‘derelict’ I could claim all my council tax back…albeit i will be stung when it get revalues.

 

when we bought the property (June 21) it had holes in the roof and fascia’s (numerous places) , mould everywhere, plasterboard ceilings falling down, no heating system.

 

I think I am clutching at straws to think they would class this as derelict.

It was certainly not livable when we bought it, especially with a pregnant wife (found out month later)

 

 

Edited January 2, 2023 by richo106

[richo106]

We took all the plasterboard ceilings/insulation down to avoid the rest of it coming down naturally 

[Adsibob]

1 hour ago, richo106 said:

I think I am clutching at straws to think they would class this as derelict.

It was certainly not livable when we bought it

The above two sentences contradict each other. Did you mean to write that or is there a superflous/missing "not" somewhere?

 

Although not a quite a slum dunk, I think there are sufficient grounds for you to pull together a very cogent argument that the place was derelict. The gov.uk guidance states:

 

"Your property’s only considered derelict if it:

• is not possible to live in it, for example because it’s been damaged by weather, rot or vandalism
• would need major structural works to make it ‘wind and watertight’ again"

Let's take each bullet in turn.

 

First bullet:

Clearly, with holes in the roof and mould everywhere the place was "damaged by weather". Although it is not made express in the guidance, it is to be implied that whether it is "possible to live in it" means "whether it is possible to live it it safely". That is the only sensible interpretation. Otherwise the council could argue that as homeless people live under bridges, it is possible to live everywhere. Clearly it is not possible to live somewhere safely that is mouldy, not weather tight, has ceilings at risk of falling down and no heating. In your letter make the list of reasons why it was not possible to live there as long as possible, including all defects, as even if a defect on its own seems a bit trivial, together with all the others it compounds an already bad situation. So in my view, you pass with flying colours on the first bullet point.

 

Second bullet:

To meet this bullet point, there are three requirements, all of which need to be met:

1. major structural works
2. wind proof
3. water tight

On (1) There is a photo of a wall with a diagonal zig zag crack through the mortar joints. Clearly that is a structural issue that would need addressing. Whether or not there is really a difference between "major structural work" in this context and just "structural work", I don't know. I'd be interested to hear @Gus Potter's views on this. But I think there is enough doubt as to the utility of the word "major" in this context, that you could argue that any structural work required would meet this first requirement. Presumably, that crack is not the only structural damage and there are other issues which a structural engineer could identify.  Same point as before applies, even if a structural defect on its own seems not "major", whatever that means, together with all the other structural defects, it compounds an already bad situation.

 

On (2) and (3) given the holes and mould it's clearly neither, so these are easy. I know mould grows when there is an absence of ventilation, but the Council won't be clever enough to work it out. Make reference to "damp ingress" as that sounds more like not water proof and is closely related to mould and I'm sure you have some of that as well.

 

So I would have thought that if you provide all of this information to the Council you have a strong case. It just doesn't look like a safe place to live and I would be making these points as assertively as you can. To put it from a different perspective: if you rented out that place as a landlord as somewhere fit for human occupation, the tenant would have every right to sue you for it.

 

BUT: think very hard before you apply for it to be removed from the valuation bands if you  are planning any form of extension or loft conversion. That's because if after the property is declared derelict and removed from the valuation bands, you enlarge it, then once it is habitable again it will need to be revalued. At that point, your council tax band will jump up and you'll have to pay the higher rate. Do the maths, what's cheaper: the big bill now and then cheaper council tax for the duration of your ownership, or a saving on the bill now, but then a higher band until you sell?

 

Edited January 2, 2023 by Adsibob

[richo106]

Thank you very much @Adsibob I will start drafting my letter and gather all the evidence today. Still not sure how to approach the council tomorrow 

 

Regarding the cancellation of bands, a local council officer was driving passed my property the other month (beginning of November) and took pictures when the roof was and said she was going to inform the VOA so think they already may be in the process regardless of what happens maybe 

 

our property is currently in band F (which i think was high for 3 bed bungalow) we will extending it to be a 5 bed house and hoping it will be only re assessed to the band above as there is go properties in the village above band G

[JOE187]

[JOE187]

I sent the  above pictures to valuation office and was told the bungalow did not qualify to be deleted  for council tax.

  I eventually got valuation officer to visit, he took one  quick look around  and deleted  the Bungalow from the purchase date!

[Mr Punter]

I don't think that they will remove it from the list.  It does not look derelict to me, in the way that @JOE187's place is.

 

The bit of displaced brickwork in the single skinned single storey lean-to will not be enough to convince them.  The house looks fairly new, with cavity walls.

 

No photos of the mould.

 

For heating, a working electric supply would be sufficient.
 

[richo106]

2 hours ago, Mr Punter said:

I don't think that they will remove it from the list.  It does not look derelict to me, in the way that @JOE187's place is.

 

The bit of displaced brickwork in the single skinned single storey lean-to will not be enough to convince them.  The house looks fairly new, with cavity walls.

 

No photos of the mould.

 

For heating, a working electric supply would be sufficient.
 

I would have to agree @Mr Punteras much I wish it wasn’t! I am still going to try my utmost see where it gets me 

 

 

[Adsibob]

36 minutes ago, richo106 said:

I would have to agree @Mr Punteras much I wish it wasn’t! I am still going to try my utmost see where it gets me 

 

 

I take a different view, but perhaps that is because of my history of having worked in civil litigation (which I have since retired from), where the winners of disputes don't tend to be the party with the best hand, but the party who has the confidence to play their hand most confidently. Here you have the advantage that your opponent is unlikely to have the legal resources (or human resources!) to fight this very hard, very efficiently or very effectively. Accordingly, I cannot see the Council taking this to Court. @richo106 has enough to formulate a cogent case that it was derelict. He doesn't need it to be strong enough to win in Court. He just needs it to be strong enough to create enough doubt in the Council's mind, that they eventually back down or come to a reasonable compromise position. I can't see there is anything to lose by trying, but do the maths first. If you were to live there for the next few decades, the increased band of a 5 bed house could be significant.

[pilgrim]

17 hours ago, richo106 said:

The house was left furnished, well full of furniture when we bought it. The previous owners then cleared the property 2 weeks after we completed

@richo106 Hopefully you have some pictures saved of the rooms furnished, or the old estate agents listing. This will be enough to get the 300% uplift cancelled. 

 

My house had rotten floors, broken windows and no heating but this was not enough to convince the council to unlist it for council tax, but they did give me 3 months for free as an uninhabitable discount.

[richo106]

5 hours ago, Adsibob said:

I take a different view, but perhaps that is because of my history of having worked in civil litigation (which I have since retired from), where the winners of disputes don't tend to be the party with the best hand, but the party who has the confidence to play their hand most confidently. Here you have the advantage that your opponent is unlikely to have the legal resources (or human resources!) to fight this very hard, very efficiently or very effectively. Accordingly, I cannot see the Council taking this to Court. @richo106 has enough to formulate a cogent case that it was derelict. He doesn't need it to be strong enough to win in Court. He just needs it to be strong enough to create enough doubt in the Council's mind, that they eventually back down or come to a reasonable compromise position. I can't see there is anything to lose by trying, but do the maths first. If you were to live there for the next few decades, the increased band of a 5 bed house could be significant.

I wish I could get you to write my letter/ represent me 😀 in all seriousness very much appreciate all your replies on this topic.

 

regarding the increase I think this is happening anyway as mentioned previously a council officer drove passed on the chance and took some photos and reported it to the VOA

[richo106]

49 minutes ago, pilgrim said:

@richo106 Hopefully you have some pictures saved of the rooms furnished, or the old estate agents listing. This will be enough to get the 300% uplift cancelled. 

 

My house had rotten floors, broken windows and no heating but this was not enough to convince the council to unlist it for council tax, but they did give me 3 months for free as an uninhabitable discount.

I do yeh. I have all listings saved etc..

 

On the council website it mentioned unfurnished properties were subject to the premium etc but on the council tax letter it was listed as empty house premium.

 

what’s the difference?

 

this being furnished doesn’t effect it being empty for VAT reclaim purposes does it? 

 

Many Thanks

[pilgrim]

1 hour ago, richo106 said:

I do yeh. I have all listings saved etc..

 

On the council website it mentioned unfurnished properties were subject to the premium etc but on the council tax letter it was listed as empty house premium.

 

what’s the difference?

 

this being furnished doesn’t effect it being empty for VAT reclaim purposes does it? 

 

Many Thanks

The wording in the law for the empty house premium says it can be only be applied to a house that has been left "unoccupied AND unfurnished". as long as you can prove it was left furnished then the premium cannot be applied. As soon as I raised this point to the council officer they dropped their case.

Thankfully it was written with an and not or!

 

As far as I can tell this will not affect the VAT reclaim process, that requirements for that just state you have to be able to prove that the property has not been lived in for more than 2 years. It does not mention the condition that the property was left in. I have not finished my renovations yet so have not filed my claim, in my case the power was disconnected so its fairly easy to prove it was not lived in.

[Gus Potter]

On 01/01/2023 at 18:30, saveasteading said:

Council officers tend not to be vindictive. Assume they are being fair, but don't know the circumstances.

This is a good view. Some are "slow", some are just young and learning what is a very big subject.. need to speak to their boss.

 

 

[Gus Potter]

20 hours ago, Adsibob said:

On (1) There is a photo of a wall with a diagonal zig zag crack through the mortar joints. Clearly that is a structural issue that would need addressing. Whether or not there is really a difference between "major structural work" in this context and just "structural work", I don't know. I'd be interested to hear @Gus Potter's views on this.

Good spot that crack.

 

Have been following this thread but don't know enough about council tax rules etc in the rest of the UK.. Scotland's are hard enough!

 

Can't say much about the crack just from the photos.. other than yes there is some movement but it does not look like you can put your finger in it.. if you could then you would be thinking major movement.. temporary structural stability issues.. particularly if there are other cracks / things dropping  elsewhere.

 

For me I would want to see the whole building in person before making any meaningful comment.