A tenant is not liable for council tax for the day their tenancy agreement ends unless they have a material interest in the property.
Summary
The Valuation Tribunal for England decided the owner and landlord of a property was liable for council tax on the last day of a tenancy agreement.
The tenant did not have a material interest in the property as they had a rolling monthly tenancy.
Background
The local authority held the owner of a property liable for council tax from 30 June 2021. The owner rented out the property and 30 June was the last day of the tenancy agreement. The owner argued that his liability started on 1 July.
The owner appealed the local authority decision under s.16 Local Government Finance Act 1992 (the 1992 Act).
The owner is 'the appellant'.
Local authority's submissions
A local authority determines council tax liability daily. Section 2 of the 1992 Act specifies the authority should assume "that any state of affairs subsisting at the end of the day had subsisted throughout the day".
The tenant had vacated the property by the end of 30 June. The authority argued that the end of the tenancy was the situation that subsisted throughout the day. The appellant, as owner of the property, was liable for that day.
Appellant's submissions
The appellant argued that their liability should start from 1 July because under contract law the tenant was liable until the end of 30 June.
The appellant submitted that the term of the tenancy agreement did not expire until midnight on 30 June. They referred to a Lands Tribunal judgment that cited extracts from the book 'The Interpretation of Contracts'. The state of affairs subsisting at the end of the day were that the tenant was still 'the tenant' and thus the liable person.
The court's decision
The panel dismissed the appeal and found the appellant was liable for council tax as 'the owner' under s.6(2)(f) 1992 Act.
Residence on the last day of a tenancy
The panel agreed that the end of the tenancy would be the situation that subsisted throughout 30 June and there was no resident.
Material interest
Under s.6 1992 Act, where there is no resident the owner is liable for council tax. The Act defines an owner as someone with a material interest, which includes holding an interest which was 'granted for a term of six months or more'. The panel examined whether the tenant had a material interest.
The panel referred to judgements Macattram v Camden London Borough Council [2012] QBD (Admin) and Leeds City Council v Broadley [2016] EWCA Civ 1213.
Like the circumstances in Macattram, the tenancy agreement was a fixed term with no contractual continuation. It became a new statutory monthly tenancy when the fixed term ended. The monthly tenancy was not a material interest as it was not 'granted for a term of six months or more'.
The appellant was the person liable for council tax as the owner.
Comments
This decision may be helpful for debt advisers helping clients who dispute council tax liability on the last day of their tenancy. It provides insight to the relevant legislation and case law the tribunal will consider.
The decision reiterates the importance of checking the terms of a tenancy agreement to establish whether a material interest exists.