Council Tax PART 1 General Citation and commencement 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation 2 1 ... ... “ the 1992 Act ” means the Social Security Contributions and Benefits Act 1992 ; ... “local authority” in Scotland means a council constituted by section 2 of the Local Government etc. (Scotland) Act 1994 ; ... “ self-employed earner ” has the meaning given by section 2(1)(b) of the 1992 Act (categories of earners); ... “ voluntary organisation ” means a body, other than a public or local authority, the activities of which are carried on otherwise than for profit; ... 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-dependants 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Young persons 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Occupation of a dwelling as a home 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Remunerative work 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 2 Families Entitlement of only one member of a family 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Couples: polygamous marriages 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Applicant in receipt of income-related benefit 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Responsibility for another person 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Membership of a household 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 3 Application of the Regulations Application 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prescribed years 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 4 Entitlement to council tax reduction Conditions of entitlement to council tax reduction 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions of entitlement to council tax reduction – dwellings in bands E to H 14A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Persons not entitled to council tax reduction: absentees 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Persons not entitled to council tax reduction: persons treated as not being in Great Britain 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Persons treated as being in Great Britain 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Temporary absence from Great Britain 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Persons not entitled to council tax reduction: persons subject to immigration control 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Persons not entitled to council tax reduction: students 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-recovery of council tax arrears caused by official error 20A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 5 Applicable amount Applicable amount 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Applicable amount: polygamous marriages. 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitional family premium 22A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Applicable amount: persons who have an award of universal credit 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 6 Income and capital CHAPTER 1 General Calculation of income and capital of members of applicant's family and of a polygamous marriage 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Circumstances in which capital and income of non-dependant is to be treated as applicant's 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER 2 Income and capital where there is an award of universal credit Calculation of income and capital: persons who have an award of universal credit 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER 3 Income Calculation of income on a weekly basis 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of child care charges 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average weekly earnings of employed earners 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average weekly earnings of self-employed earners 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average weekly income other than earnings 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of average weekly income from ... tax credits 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of weekly income 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER 4 Employed earners Earnings of employed earners 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of net earnings of employed earners 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER 5 Self-employed earners Earnings of self-employed earners 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of net profit of self-employed earners 37 1 For the purposes of regulation 30 (average weekly earnings of self-employed earners) the earnings of an applicant to be taken into account are— a in the case of a self-employed earner who is engaged in employment on that earner's own account, the net profit derived from that employment; b in the case of a self-employed earner whose employment is carried on in partnership or is that of a share fisherman within the meaning of the Social Security (Mariners' Benefits) Regulations 1975 , that earner's share of the net profit derived from that employment, less— i an amount in respect of income tax and social security contributions payable under the 1992 Act calculated in accordance with regulation 38 (deduction of tax and contributions for self-employed earners); and ii one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium. 2 Any sum, where applicable, specified in Schedule 3 is to be disregarded when calculating a self-employed earner's net profit. 3 For the purposes of paragraph (1)(a) the net profit of the employment is, except where paragraph (9) applies, to be calculated by taking into account the earnings of the employment over the assessment period less— a subject to paragraphs (5) to (8), any expenses wholly and exclusively incurred in that period for the purposes of that employment; b an amount in respect of— i income tax; and ii social security contributions payable under the 1992 Act; and c one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium. 4 For the purposes of paragraph (1)(b) the net profit of the employment is to be calculated by taking into account the earnings of the employment over the assessment period less, subject to paragraphs (5) to (8), any expenses wholly and exclusively incurred in that period for the purposes of the employment. 5 Subject to paragraph (6), no deduction is to be made under paragraph (3)(a) or (4), in respect of— a any capital expenditure; b the depreciation of any capital asset; c any sum employed or intended to be employed in the setting up or expansion of the employment; d any loss incurred before the beginning of the assessment period; e the repayment of capital on any loan taken out for the purposes of the employment; f any expenses incurred in providing business entertainment; or g any debts, except bad debts proved to be bad, but this sub-paragraph does not apply to any expenses incurred in the recovery of a debt. 6 A deduction is to be made under paragraph (3)(a) or (4) in respect of the repayment of capital on any loan used for— a the replacement in the course of business of equipment or machinery; and b the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair. 7 The relevant authority is to refuse to make a deduction in respect of any expenses under paragraph (3)(a) or (4) where it is not satisfied given the nature and the amount of the expense that it has been reasonably incurred. 8 For the avoidance of doubt— a a deduction is not to be made under paragraph (3)(a) or (4) in respect of any sum unless it has been expended for the purposes of the employment; b a deduction is to be made under paragraph (3)(a) or (4) in respect of— i the excess of any value added tax paid over value added tax received in the assessment period; ii any income expended in the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair; and iii any payment of interest on a loan taken out for the purposes of the employment. 9 Where an applicant is engaged in employment as a child minder the net profit of the employment is to be one-third of the earnings of that employment, less— a an amount in respect of— i income tax; and ii social security contributions payable under the 1992 Act; calculated in accordance with regulation 38 (deduction of tax and contributions of self-employed earners); and b one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium. 10 For the avoidance of doubt where an applicant is engaged in employment as a self-employed earner and is also engaged in one or more other employments as a self-employed or employed earner any loss incurred in any one of those employments is not to be offset against earnings in any other of the applicant's employments. 11 The amount in respect of any qualifying premium is to be calculated by multiplying the daily amount of the qualifying premium by the number equal to the number of days in the assessment period, and for the purposes of this regulation the daily amount of the qualifying premium is to be determined— a where the qualifying premium is payable monthly, by multiplying the amount of the qualifying premium by 12 and dividing the product by 365; and b in any other case, by dividing the amount of the qualifying premium by the number equal to the number of days in the period to which the qualifying premium relates. 12 In this regulation “ qualifying premium ” means any premium which is payable periodically in respect of a personal pension scheme and is payable on or after the date of the application. Deduction of tax and contributions of self-employed earners 38 1 The amount to be deducted in respect of income tax under regulation 37(1)(b)(i), (3)(b)(i) or (9)(a)(i) (calculation of net profit of self-employed earners) is to be calculated on the basis of the amount of chargeable income and as if that income was assessable to income tax at the basic rate of tax applicable to the assessment period less only the personal relief to which the applicant is entitled under section 35(1) of the Income Tax Act 2007 (personal allowance for those aged under 65) as is appropriate to the applicant's circumstances, but, if the assessment period is less than one year the earnings to which the basic rate of tax is to be applied and the amount of the personal reliefs deductible under this paragraph are to be calculated on a pro rata basis. 2 The amount to be deducted in respect of social security contributions under regulation 37(1)(b)(i), (3)(b)(ii) or (9)(a)(ii) is the total of— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b the amount of Class 4 contributions (if any) which would be payable under section 15 of the 1992 Act (Class 4 contributions recoverable under the Income Tax Acts) at the percentage rate applicable to the assessment period on so much of the chargeable income as exceeds the lower limit but does not exceed the upper limit of profits and gains applicable for the tax year applicable to the assessment period, but if the assessment period is less than one year those limits are to be reduced pro rata. 3 In this regulation “ chargeable income ” means— a except where sub-paragraph (b) applies, the earnings derived from the employment less any expenses deducted under regulation 37(3)(a) or, as the case may be, (4); and b in the case of employment as a child minder, one-third of the earnings of that employment. CHAPTER 6 Other income Calculation of income other than earnings 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital treated as income 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notional income 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER 7 Capital Capital limit 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of capital 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disregard of capital of child and young person 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income treated as capital 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of capital in the United Kingdom 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of capital outside the United Kingdom 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notional capital 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diminishing notional capital 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital jointly held 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of tariff income from capital 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 7 Students CHAPTER 1 General Interpretation: students 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of students 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER 2 Income Calculation of grant income 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of covenant income where a contribution is assessed 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Covenant income where no grant income or no contribution is assessed 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relationship with amounts to be disregarded under Schedule 4 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other amounts to be disregarded 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of student loans 59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of fee loans 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of payments from access funds 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disregard of contribution 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Further disregard of student's income 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income treated as capital 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disregard of changes occurring during summer vacation 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 8 Amount of reduction Maximum council tax reduction 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-dependant deductions 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extended council tax reduction 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Duration of period of entitlement to extended council tax reduction 69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amount of extended council tax reduction 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extended council tax reduction: movers 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relationship between council tax reduction and extended council tax reduction 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extended council tax reduction (qualifying contributory benefits) 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Duration of extended council tax reduction (qualifying contributory benefits) 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amount of extended council tax reduction (qualifying contributory benefits) 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extended council tax reduction (qualifying contributory benefits): movers 76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relationship between council tax reduction and extended council tax reduction (qualifying contributory benefits) 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alternative maximum council tax reduction 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Residents of a dwelling to whom regulation 14(6) does not apply 79 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 9 Effective date Date on which entitlement is to begin 80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Date on which a change of circumstances is to take effect 81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 10 Applications Who may apply 82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Written applications 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Telephone applications 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Date on which an application is made 85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Evidence and information 86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amendment of applications 87 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Withdrawal of applications 88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 11 Notification of changes of circumstances Duty to notify changes of circumstances 89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alternative means of notifying changes of circumstances 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 11A Reviews Review of determination on an application 90A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Request for further review 90B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Panel to conduct further reviews 90C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conduct of further reviews 90D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 12 Electronic communications Sending documents by electronic communication 91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 13 Consequential and transitional provisions Transitional provision 92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Savings provision 93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consequential amendments 94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . JOHN SWINNEY A member of the Scottish Government St Andrew's House, Edinburgh