Local Government Act 2003 Explanatory Notes

Local Government Act 2003

2003 CHAPTER 26

Commentary on Sections

Part 6: Council Tax

Section 79: Transitional arrangements

172. Revaluation is likely to affect the amount of council tax individual households pay. New bands with new thresholds will be substituted, by order under section 5(4)(b) LGFA 1992, for the existing bands set out in subsections (2) and (3) of that section, as part of the revaluation process, since dwelling values have increased since the original thresholds were set. Dwellings may go up one or more bands whilst others may go down.

173. When the council tax was introduced, transitional reductions regulations were made under section 13 of the LGFA 1992. However, section 13 only allows regulations to be made which would reduce what would otherwise be the council tax liability for the dwelling.

174. Section 79 inserts section 13B into the LGFA 1992. This section will enable the Secretary of State and the National Assembly for Wales to make regulations to phase in changes to council tax bills following revaluation, i.e. following the compilation of new lists under section 22B inserted by section 77, or following the making of an order under section 5 substituting new valuation bands or different ratios between the bands.

175. Section 13B(3) will allow regulations to provide for the council tax liability in respect of a particular dwelling to be higher or lower than it would otherwise be. Liability may be made higher than it would otherwise be where a dwelling moves down one or more bands as a result of revaluation, and lower, where a dwelling moves up one or more bands. The equivalent section which applies to non-domestic rating (currently section 58 of the Local Government Finance Act 1988, but see also the new section 57A inserted by section 65 of the Act) contains similar provision to allow increases as well as decreases in what would otherwise be the liability.

176. Subsections (3) and (4) of the new section 13B give flexibility to develop schemes which will cover one or more years and to apply different rules in different years.

177. Subsection (5) enables regulations under the new section 13B to make consequential amendments to social security legislation. This may be needed for council tax benefit purposes.