Council taxpayers are entitled to apply for discretionary reductions in any amount owed in council tax, regardless of when the liability may have arisen. That was the decision of the Valuation Tribunal for England on February 25th 2015 following a test case involving a disabled pensioner Jenny Morgan  in an appeal backed by Nucleus which has turned into a test case on the law.


The judgment in a council tax appeal by the disabled pensioner backed by Nucleus will have national effect in determining discretionary reductions can be made for taxpayers across England who may owe sums for any period earlier than April 2013, including those who have liability orders.


The Valuation Tribunal England has ruled that discretionary reductions under section 13A of the Local Government Finance Act 1992 are not limited to council tax bills arising from 1 April 2013 onwards. The power to reduce sums was originally introduced in 2003 but has been little used as few taxpayers or advisers know about it.


The appeal arose in February 2014 after Mrs Jenny Morgan contacted Nucleus Legal Advice for help with a council tax dispute which had been going on since 2007 with her local authority, Warwick District Council. The case has already twice been before the Lower Tier Tribunal over benefits in 2011 and 2013, but the Council has insisted on pursuing Mrs Morgan despite her being in financial hardship and disabled, serving further claims upon her for allegedly liabilities for 1997-1999 as recently December 2014.


The Valuation Tribunal for England did not examine the merits of the dispute and its history but these have occasioned widespread comment, both locally and in the press, concerning the delays and the amounts being spent by the Council on pursuing Mrs Morgan over the years. Warwick District Council refused her application for a discretionary reduction by Mrs Morgan and applied to the Valuation Tribunal England to strike out her appeal against this refusal.


In support of the application to strike out her appeal Warwick Council argued that Mrs Morgan was not entitled to a reduction because her liabilities had arisen before 1st April 2013. By Warwick District Council challenging Mrs Morgan’s right to appeal (rather than discussing the full merits which were not examined at the hearing) her appeal was effectively turned into  a test case on the scope of section 13A and the power of any Council to award discretionary reductions.


If Warwick District Council was correct then no taxpayer would be entitled to a reduction for any sum in council tax which arose more than two years ago.


At the hearing before the Valuation Tribunal for England, Mrs Morgan was represented by the chairman of Nucleus Legal Advice, Alan Murdie, acting in a personal capacity. On behalf of  Mrs Morgan it was argued that it could not have been the intention of Parliament to deprive taxpayers of the right to apply for a discretionary reduction for sums arising before April 2013. Unlike statutes covering social security which are time-limited, Parliament did not set any time limit on the periods covered by section 13A  or the time in which an application had to be made.


In giving judgment the President  of the VTE, Professor Graham Zellick rejected the contention by Warwick Council thatParliament   intended to allow relief only in regard to liability that arose after the introduction of the power; and viewed it as  even less conceivable that Parliament had limited the scope of  the original section 13A by in enacting s.13A(1)(c) in 2012


In giving judgment the President stated: “It is more reasonable to suppose that Parliament intended to enlarge discretionary relief by including a right of appeal than that it intended to abrogate the right completely in respect of any liabilities incurred prior to April 2013. The argument that anyone entitled to apply under the former s.13A in respect of liabilities incurred before April 2013 is no longer able to apply at all is manifestly unsustainable.”

Regarding the position of Mrs Morgan, the President stated:  “I therefore reject the respondent’s position and conclude that s.13A(1)(c) applies to Mrs Morgan’s circumstances. She is entitled to make an application for a reduction in her liability; the respondent authority is obliged to consider it on its merits; and this Tribunal has jurisdiction to hear her appeal… the respondent authority is obliged to consider it on its merits; and this Tribunal has jurisdiction to hear her appeal.”


Consequently, Mrs Morgan’s right to both make an application and an appeal have been upheld, and both parties have been issued with directions which will enable Mrs Morgan to apply for a discretionary reduction of the sums which the Council have claimed are owed before 2013.


Alan Murdie commented: “This ruling has preserved and upheld a very important power in council tax law to reduce sums owed in council tax, regardless of when the liability or debt arose. Any taxpayer in England, particularly those suffering financial hardship, is entitled to make an application and has a further right of appeal to a tribunal if the application for a reduction is refused.”