Search Legislation

Local Government Act 2003

Sections 75 and 76: Discounts and exemptions

Section 75: Discounts - special provisions for England and Wales

142.Section 11 of the LGFA 1992 provides for nationally set council tax discounts. Currently under section 11(1) there is a discount of 25% where there is only one resident, or all but one of the residents fall to be disregarded for council tax purposes, and under section 11(2) there is a discount of 50% where there is no resident or all residents fall to be disregarded. Billing authorities in Wales already have power under section 12 of the LGFA 1992 to reduce from 50% to 25% or, to remove, the discounts which would otherwise apply under section 11. English authorities have no such power at present.

143.Subsection (1) of section 75 inserts a new section 11A into the LGFA 1992 which enables the Secretary of State to prescribe by regulations classes of dwellings in England where a billing authority may change the level of council tax discount. Under subsection (3), the Secretary of State may prescribe a class of dwellings where the billing authority may reduce but not remove the discount, and the regulations may not allow for the discount to be less than 10%. It is proposed to make regulations under this subsection to define a class of second homes which are not owned by persons required to live in tied accommodation elsewhere because of their work. Under subsection (4), the Secretary of State may prescribe a class of dwellings where the billing authority may reduce or remove completely the discount. It is proposed to make regulations under this subsection to define a class of long term empty homes (which are not exempt dwellings). In either case, the billing authority may determine to change the discount in all or part of its area. Subsection (5) requires the authority to make such a determination before the start of the financial year, and subsection (6) requires such determinations to be published in newspapers circulating locally.

144.Subsection (2) of section 75 replaces the existing section 12 of the LGFA 1992 with a new version, giving the National Assembly for Wales (“the NAW”) and Welsh billing authorities equivalent powers to those conferred by subsection (1) on the Secretary of State and English billing authorities. Subject to the exercise of these powers by the NAW, Welsh billing authorities will be able to do so for only part of their areas.

145.Subsections (3), (4) and (5) of section 75 are transitional provisions. They preserve in force the effect of existing regulations prescribing classes of dwellings for which Welsh billing authorities can reduce the 50% discount to 25% or zero, and preserve the effect of any existing determinations to reduce discounts made by Welsh authorities. While section 75 will give Welsh authorities greater flexibility, these transitional provisions ensure that Welsh authorities are not forced to take new decisions if they would not have decided differently under the new powers.

Schedule7: Minor and Consequential amendments

Paragraphs 41, 42,49 and 50: determinations to reduce discounts

146.Paragraph 41 of Schedule 7 amends section 11 of the LGFA 1992 to make clear that any discount under that section must take effect subject to any determination the authority has made, under the new section 11A inserted by section 75, to reduce or remove discounts.

147.Paragraph 42 amends section 13(3) of the LGFA 1992 to ensure that any reductions under regulations under section 13 apply on top of any discounts under s11A.

148.Paragraph 49 of Schedule 7 amends section 66 of the LGFA 1992 to provide that a determination by a billing authority to reduce or remove the discount under the new section 11A or 12 of the LGFA 1992, inserted by section 75, can only be challenged by judicial review.

149.Paragraph 50 of Schedule 7 amends section 67 of the LGFA 1992 to require the determination to reduce or remove discounts in accordance with the new section 11A or section 12 inserted by section 75 to be made by the full council and not delegated.

Section 76: Billing authority’s power to reduce amount of tax payable

150.Under the LGFA 1992, dwellings may be exempt from council tax if they fall within one of the exempt dwelling classes set out in an order made under section 4 of that Act (S.I. 1992/558). The amount of council tax payable may be subject to a discount under section 11 (where there is one or no resident, or all, or all but one of, the residents fall to be disregarded), or in Wales, under section 11 to the extent that the authority has not exercised the discretion under section 12 to reduce the discount. Finally, the amount may be reduced through the effect of regulations made under section 13 of the LGFA 1992, e.g. where it is occupied by a disabled person: see the Council Tax (Reductions for Disabilities) Regulations 1992 (S.I. 1992/554). All of these exemptions, discounts and reductions are prescribed in orders or regulations made by the Secretary of State, or in Wales, the National Assembly for Wales.

151.Billing authorities do not, at present, have a discretion to grant further discounts and exemptions, or to remit or waive council tax on hardship grounds. Authorities do not have the power to respond to hard cases which do not fall within any of the centrally prescribed categories.

152.Section 76 inserts a new section 13A into the LGFA 1992 which will give billing authorities in England and Wales a broad discretion to reduce the amount of council tax payable as respects a dwelling, to such extent as they think fit. Subsection (2) of the new section 13A provides that this may include reducing the amount payable in respect of a day to nil.

153.Authorities may exercise this power in individual cases (e.g. individual hardship, in cases where the taxpayer is not eligible for council tax benefit, for example, where the dwelling is not their sole or main residence). Or they may determine classes of case in which liability is to be reduced (i.e. the equivalent of authorities determining exempt dwellings classes, or reductions in circumstances other than those prescribed in regulations under section 13 of the LGFA 1992).

Schedule 7: Minor and Consequential amendments

Paragraph 53(3): treatment of discretionary reductions for council tax administration purposes

154.Paragraph 53(3) of Schedule 7 amends Schedule 2 to the LGFA 1992 by inserting a new paragraph 21, in consequence of section 76.

155.Paragraph 21(2) of Schedule 2 to the LGFA 1992 provides that where an authority has made a determination of a class of case in which council tax liability is to be reduced to nil, the dwelling shall be treated as an exempt dwelling for the purposes of Schedule 2 to the LGFA 1992. Paragraphs 8, 9 and 10 of Schedule 2 to the LGFA 1992 allow regulations to be made in relation to exempt dwellings. Such regulations could also be made in relation to dwellings subject to a 100% reduction under section 76 as a result of paragraph 53(3) of Schedule 7. These could, for example, require the billing authority to notify the person who would otherwise be liable for council tax of various matters. These include the dwelling’s entry in the valuation list, any assumptions made that a 100% reduction applies, and requiring the person to notify the billing authority if he has reason to believe that the assumptions were inaccurate.

156.Where the authority’s determination is to reduce the amount payable for the class of dwellings other than to nil, the new paragraph 21(3) inserted into Schedule 2 of the LGFA 1992, provides for the dwelling to be treated for the purposes of that Schedule as if it were subject to a discount (i.e. a discount under section 11 or section 12 of that Act). Regulations may be made under paragraphs 4 and 5 of that Schedule e.g. requiring the authority to take reasonable steps to ascertain the applicability of any discounts, notify the liable person of assumptions made following such steps, requiring the taxpayer to notify it if he believes the assumptions to be incorrect. Such regulations could also be made, as a result of paragraph 53(3) of Schedule 7, in relation to discretionary reductions.

Back to top


Print Options


Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.


More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources