HL Deb 29 April 1994 vol 554 cc922-3

11.18 a.m.

Lord Boyd-Carpenter asked Her Majesty's Government:

Whether they are aware that some local authorities which at the beginning of the current financial year had received payment in full of their demands for council tax have now issued adjustment notices demanding additional council tax for the current year and whether such additional demands are lawful or enforceable.

Lord Henley

My Lords, liability to council tax can often change after the demand notice has been issued; for example, when a single person discount is awarded part way through the year. If liability changes, an authority must adjust the Bill and either refund or credit the account or request an additional payment.

Lord Boyd-Carpenter

My Lords, when someone has paid an account for the year in full is it not a little odd that the taxing authority should then come along later and ask for more? Can my noble friend cite any other form of taxation under which the taxing authority enjoys this, no doubt to it agreeable, facility?

Lord Henley

My Lords, I do not consider it odd at all. If one takes the example that I gave of someone who becomes a single person during the year, having previously been married, in that case he or she would be entitled to a refund. If a single person becomes a married person during the year obviously his circumstances have changed. It is made quite clear on the original Bill, with which explanatory notes are provided, that if circumstances change there will be increased liability. I see nothing odd about that.

Lord Harmar-Nicholls

My Lords, is my noble friend aware that his answer will drive even more people to think that in moving from the community charge to the council tax we settle for the second best?

Lord Henley

My Lords, I note what my noble friend says.

Lord Eatwell

My Lords, has the noble Lord had the opportunity to reconsider his somewhat miserly Answer given yesterday, refusing to countenance the payment of interest on funds returned after successful council tax appeals? Is he aware that the Inland Revenue demand interest on unpaid sums just 30 days after the issue of a demand? Community charge appeals are now outstanding for more than a year. Surely interest should be paid.

Lord Henley

My Lords, I believe that the noble Lord will be aware—I am open to correction; I speak only from memory—that the Inland Revenue does not demand interest until that interest bill is over about £30. In other words, it applies something of a de minimis rule. If we are talking about a reduction of one band—that is what it is likely to be if someone appeals and their band is reduced by one band—we are talking of a reduction in their bill, on average, of something of the order of £60. I really do think that the interest for six months or longer on a sum of £60 is not something that is within the realms of practicality. I have to say to the noble Lord that I do not intend to reconsider my Answer.

Baroness Gardner of Parkes

My Lords, will my noble friend look further into the answer given to my noble friend Lord Boyd-Carpenter? His answer seemed to be that if the circumstances of the council tax payer changed it was a rebate issue; whereas I thought that the Question tabled by the noble Lord asked whether or not the council could alter the whole council tax assessment for everyone after a period of time. I had thought that that was not possible. Can the noble Lord confirm my understanding?

Lord Henley

My Lords, as I understood it, the Question related to changes of circumstances. Where circumstances change, obviously it is open to the authority to adjust the bill up or down. I am not aware that it is possible, except in particular cases, for the authority actually to change the bill for the entire community which it serves. I shall have to take advice on that.