The Local Authorities (Calculation of Council Tax Base) (Wales) (Amendment) Regulations 2016

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Local Authorities (Calculation of Council Tax Base) (Wales) Regulations 1995 (“the 1995 Regulations”) in respect of a financial year beginning on or after 1 April 2017.

The 1995 Regulations provide for the calculation by billing authorities (county and county borough councils) and major precepting authorities in Wales of their council tax bases. The council tax base is an amount required by the Local Government Finance Act 1992 (“the 1992 Act”) to be used in the calculation of council tax by billing authorities and major precepting authorities and in the calculation of the amount of a precept payable by each billing authority to a major precepting authority.

The amendments in these Regulations are made as a consequence of amendments to the 1992 Act by section 139 of the Housing (Wales) Act 2014. Those amendments enable billing authorities in Wales to apply a higher amount of council tax (“a premium”) in respect of long-term empty dwellings and dwellings that are occupied periodically.

The council tax base for the whole of a billing authority’s area (item T in section 33(1) of the 1992 Act) is found by adding together the relevant amounts for each council tax band and multiplying the total by the authority’s estimate of its collection rate (see regulation 3 of the 1995 Regulations).

Regulation 4 inserts new regulation 5B into the 1995 Regulations. When calculating the tax base for financial years beginning on or after 1 April 2017, the formula in new regulation 5B requires billing authorities to take account of any premium applied under section 12A or 12B of the 1992 Act (if the authority has determined to charge a premium in respect of that year). The new formula includes item “E” which is a factor to take account of a premium to which the council tax may be subject. The calculation for item E requires a billing authority to multiply, for each relevant percentage, an estimate of the number of dwellings in respect of which a premium applies with the relevant percentage. In this context the “relevant percentage” is the percentage by which council tax is increased due to the application of a premium (see the amendment to the meaning of “relevant percentage” in regulation 1(3) of the 1995 Regulations made by regulation 3 of these Regulations).

Billing authorities are required to make their calculations on the basis of the council tax list on the day prescribed by regulations. This day, the “relevant day”, for a financial year beginning on or after 1 April 2017 is 31 October in the year preceding the financial year for which the calculations are made.

Paragraph (7) of new regulation 5B requires billing authorities to take account of a premium in the calculation of item J in the formula. Item J is the amount of any adjustment in respect of changes in the number of chargeable dwellings or discounts calculated by the authority during the period from the relevant day to the end of the financial year. The calculation of item J in new regulation 5B includes an element to take account of any adjustments to the application of a premium.

Regulation 6 of the 1995 Regulations provides for the calculation of the tax base for a part of a billing authority’s area (item “TP” in the 1992 Act). Regulation 5 of these Regulations inserts references to the new regulation 5B into regulation 6 of the 1995 Regulations. The calculation for the tax base for part of an area therefore takes account of the application of a premium.

Regulation 7 of the 1995 Regulations provides for the calculation of the tax base for the purposes of a major precepting authority. Regulation 6 of these Regulations inserts references to the new regulation 5A and to items in the calculations in the new regulation 5A into regulation 7 of the 1995 Regulations. This ensures that the calculation of the tax base includes the application of a premium.

Regulation 9 of the 1995 Regulations provides for the determination by a major precepting authority of a billing authority’s tax base where the billing authority has failed to notify its tax base to the major precepting authority within the prescribed period. Regulation 7 of these Regulations amends regulation 9 to insert reference to the new regulation 5A.

The Welsh Ministers’ Code of Practice on the carrying out of Regulatory Impact Assessments was considered in relation to these Regulations. As a result, a regulatory impact assessment has been prepared as to the likely costs and benefits of complying with these Regulations. A copy can be obtained from the Local Government Finance Policy Division, Welsh Government, Cathays Park, Cardiff, CF10 3NQ.