Section 13A – a little-known way to get Council Tax written off

Councils in England and Wales can reduce or write off your council tax under Section 13A (1)(c) of the Local Government Finance Act 1992. This has been called “the best-kept secret in council tax law“.

These Section 13A write-offs can be used if your house is uninhabitable because of flooding or fire. But you can also get a write-off if you have no money to pay your council tax after paying for essential living costs.

This article looks at how to apply for a Section 13A reduction because of financial problems, and how to appeal if the council rejects it.

Do you have a better option?

There may be easier, quicker, more certain ways to get help with your finances. So look seriously at all your other options.

Council tax is a priority debt. That means you have to pay it even if you then can’t pay a loan or a credit card. A section 13A application will be rejected if you are still paying other non-priority debts.

First read What to do if you have problems paying Council Tax.

Could you pay all your priority debts and essential living costs if interest is frozen on your loans, credit cards etc? In that case, look at a debt management plan or a token payment plan.

If your problem is bigger and you don’t have enough income to pay your priority debts, talk to a good debt adviser about the different types of insolvency. A Debt Relief Order for example will write off all your council tax arrears and most of your other debts as well.

A section 13A application is something to fall back on when other debt solutions won’t work for you.

Most people need help with an application

Section 13A applications aren’t easy. Most people would benefit from help with making an application:

• you will need an Income and Expenditure statement (I&E) – debt advisers are experts at drawing this up. It will often need to be a household I&E covering your partner’s income and expenses as well.
• there may be able other benefits you could claim or a better debt solution that covers more of your debts;
• a letter from a debt adviser in support of your application will prove that you have looked at your other options;
• a debt adviser can set up a “breathing space” if this would help you.

So unless you are very confident and council tax is your only problem debt, I strongly suggest you talk to a debt adviser.

It’s best if the adviser is local to you.

Although the law is the same across England and Wales, different councils have different procedures. A local agency may have experience with section 13A applications to your council.

You can get free local advice from your local Citizens Advice, a Law Centre or a service run by your council. In the rest of this article, I just say “Citizens Advice” for short!

Do this before applying for a council tax write-off

1) Get details of your council tax arrears

Councils account for money in tax years, which run from April to March the next year. If you are getting letters from the council or a bailiff saying you owe £450, that may be your council tax debt for the last tax year and you may also have arrears in other years.

Unless you are 100% definite you only owe money for the one tax year, phone your council tax department and ask them for details of all the council tax years you owe money for.

2) Other reductions or benefits you may be entitled to

You can get a section 13A write-off in addition to claiming other reductions such as:

• the 25% single-person discount;
• your council’s normal Council Tax Reduction provisions for people on a low income;
• a Discretionary Housing Payment (DHP) to help with your rent costs not covered by Universal Credit or Housing Benefit.

Most councils expect you to have applied for all the other help you may be entitled to before making a Section 13A application. Your local Citizens Advice can advise what else you may be able to claim.

If your visa/residence is on a no recourse to public funds condition, then you cannot claim a Section 13A reduction.

3) Find your council’s section 13A policy

If you apply for a reduction, the council has to consider your individual case. But councils should have a policy that covers how they make a decision Knowing what this is may help you write a better application.

Some councils explain their Section 13 A policy on their website.  To find this is to use the search box on your council’s website and look for Section 13A or Discretionary Council Tax Reduction.

If you can’t find anything on their website, this doesn’t mean they don’t give section 13A reductions – they just don’t want people to know about them! So phone or email the council tax department and ask how to make an application for a Section 13A Discretionary Council Tax Reduction.

Read the policy carefully and think about how it applies to you.

If the council policy seems to dismiss your situation, talk to your local Citizens Advice. For example, some councils say you can only apply for a reduction/write-off for the current council tax year – that is wrong!

4) Get an Income & Expenditure statement

A good I&E is vital for making a successful application for a write-off. The aim is to show you don’t have enough money to make an arrangement to repay the council tax owing, which is why it should be written off.

You can use National Debtline’s Your Budget tool to draw one up. You can send a copy of this to your council with the section 13A application.

Your I&E should either be balanced with income and essential expenditure about equal, or it may be in deficit with your essential expenditure being larger than your income.  It should not show a surplus, as the council would expect you to use that to pay the council tax.

It has to be accurate. You can’t increase some of the numbers so that your position looks worse! You will be supplying your bank statements with your application so this will be obvious.

Expenditure to inessentials should be stopped. This includes not making any payments to non priority debts such as unsecured loans, credit cards, catalogues and your overdraft. If you are currently paying some of these, you need debt advice on stopping so that you have more money to pay to priority debts such as council tax.

If you are making changes, eg you are stopping paying a debt and a couple of subscriptions, then you can include a note with the I&E to say what you have done.

Your local Citizens Advice can help you sort out priority and non-priority debts. They can talk about your debt options and what expenditure may be accepted as “essential” by your council.

Making the Section 13A application

Using the council’s form

When the council provides a form, use it. When the council asks for specific evidence you must supply this. Some councils ask for your bank statements, payslips, benefit letters and/or an I&E sheet produced by a local advice agency.

If this seems intrusive, remember this is a discretionary reduction, so the council is entitled to ask for details about your finances. Your application is likely to be rejected if you don’t send this, and you won’t win an appeal.

When the council just says “send supporting evidence” without a list, you should attach an I&E sheet and your two most recent bank statements. If you have a partner, you need to attach their bank statements as well. If you have several bank accounts, send them all – you don’t want the council thinking you have another account with a lot of money in it!

Also include any other documents you think help explain your situation.

No form? Send an email

Don’t do this if your council provides a form for Section 13A applications. It just wastes time as the council will probably reply that you have to complete their form.

But if there is no form, you can email your application to the council tax department. NB send this to the council tax department itself, not the benefits department.

Possible reasons why the council should write off tax

The basic reason why the council should write off your council tax is that your budget shows you do not have any money at all to pay the council tax after paying for your essentials.

But your application can also explain the cause of your problems and their effect on you and your family. Here are some examples – there may be other points that matter for you.

• A specific life event (redundancy, sickness, caring responsibilities, divorce, economic abuse, business failure, etc) may have caused your difficulties.
• If you could not get financial help because of Covid-19, explain why.
• If you can afford to pay this year’s council tax, but not the arrears on previous years, point out that your budget has no surplus income and if you have to make payments towards previous years arrears, you won’t be able to pay this year’s tax.
• You may have to have a car because of getting the children to school or to be able to find a new job if there is no suitable public transport.
• Where you have made reductions in your expenses, you could explain this. And add if you have discussed your budget with xxxxxxxxxxxx advice agency. A letter from the advice agency in support of your application could be helpful. That letter could mention if you have been getting help from a foodbank.
• If your health (or your partner’s or your children’s) is an important factor, a letter from your GP may be useful saying why this prevents you from working and if it is unlikely to improve in the next year.
• Say if making an arrangement to pay the council tax arrears would mean you are unable to pay your rent. When your benefits are reduced because of the benefit cap, or you are not able to claim benefits for a third child, or you have a bedroom tax penalty but there is no other accommodation you could move to, explain the strain this puts on your budget.
• If you have a mortgage and you are not yet getting any help through Universal Credit, or if the help is only being paid at a much lower interest rate, explain this.
• If you cannot move somewhere cheaper because of caring responsibilities, or you are in a house that is adapted for your needs, or your house is unsaleable eg because of cladding problems, explain this.

You don’t need to write a lot. The numbers are in your I&E, you are just giving an explanation.

The key points to make are about why your income is low, why your expenses are high, how you have tried to reduce them and whether your problems are likely to carry on.

Appeal to the Valuation Tribunal

The Valuation Tribunal considers all appeals about council tax matters. It is independent of your council and it is free to appeal to them.

You should make an appeal within two months of getting a rejection from your council (or when two months has passed without the council replying.)

If you don’t get a reply from your council in two months you could complain to the council. But this may delay taking your case to the independent Valuation Tribunal, so it may be better to send the appeal to the Valuation Tribunal straight away.

Reasons to appeal

Did you supply all the information the council asked for? If your application was rejected because you didn’t, you need to tackle that, not make an appeal.

You should appeal if:

• no reason was given for rejecting your application;
• the council seems to have applied a blanket policy such as “we only give reductions for the current year, not previous years” or “we do not give reductions to people who are in work” – they should have considered your specific case and whether you can pay the arrears;
• the council says it has used up all the allocated money for this sort of reduction – they are not allowed to limit their discretionary reductions in this way;
• the rejection is unreasonable, the council seems to have made a mistake or has ignored a key fact in your case.

If you are not sure, talk to a local debt adviser:

• they will be able to help you explain what to say on the appeal form;
• they may also be able to get your council to suspend enforcement such as bailiffs while an appeal goes through.

The appeal process

The appeal process is described on the Valuation Tribunal for England website. (There is a separate website and procedures for Wales, see a local advice agency for help with this.)

You want the page for Appealing about liability – this is not the page for appeals about Council Tax Reduction.

In your appeal you need to explain what you think was wrong with your council’s decision and what you want the Tribunal to do – in your case, order the council to reduce or write off your council tax arrears.

If you think the council made a wrong decision, this is your chance to explain more clearly why you have no surplus income after paying for essential to make arrangements to pay the council tax. As with your application to the council, you can attach supporting evidence.

A local debt adviser will be able to help you with this.

This booklet covers the appeal process.

You are more likely to win an appeal if you attend the hearing. The hearing is less formal than a court of law. You do not need a solicitor to represent you.

Some hearings are being held remotely. You will need a phone or computer with a camera and a microphone. See the Valuation Tribunal’s Remote Hearings page which has full details. A friend or adviser can attend with you.

Will this work?

Section 13A write-offs aren’t common because hardly anyone has heard of them! But in 2021 these discretionary write-offs may be more used because so many people have major financial problems because of the pandemic.

I don’t know how likely your application is to be accepted by your council directly.

Maximise your chance by getting debt advice to put together a good budget and make sure you aren’t making payments to non-priority debts.

Your council may reject your section 13A application but find some other pot of money they can help you with. This would still be a good result for you!

The Valuation Tribunal says about 1 in 3 or 4 appeals are upheld. This is across all types of complaints, there aren’t any statistics for discretionary council tax reductions specifically.

Maximise your chance by talking to a debt adviser about your case and by attending the hearing.

Worrying about whether this will work is not a reason to delay trying if this is the best way forward for you!

You can ask a question or leave a comment below this article.

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Resources for debt advisers

• the legislation: Section 13A (1)(c) of the Local Government Finance Act 1992
• a key Valuation Tribunal decision in 2014 on two cases: S. C. and C.W. v. East Riding of Yorkshire Council:  “An authority cannot as a matter of law fetter its discretion and must therefore consider every application on its merits whatever the policy or scheme says.” 
• public funds for NRPF is defined in the Immigration Rules.
• Specialist Debt Advice can give help with appeals.