Setting-the-Tax-Base by sdaferv


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									Agenda Item No:                                        Report No:

Report Title:          Council Tax: Setting the Tax Base 2005/2006

Report To:             Cabinet                         Date:         5 January 2005

Lead Councillor:       Councillor Ann De Vecchi

Ward(s) Affected:      All

Report By:             Director of Finance and Community Services

Contact Officer(s):    Stephen Jump, Financial Services Manager

Purpose of Report:

     To seek approval of the Council Tax Base for 2005/2006

Officers Recommendation(s):

1    To confirm that the level of council tax discount in respect of second homes
     remains at 10%

2    To confirm that the level of discount in respect of long-term empty properties
     remains at 0%

2    To approve that, in accordance with the Local Authorities (Calculation of
     Council Tax Base) Regulations 1992, the amount calculated by the Lewes
     District Council as its Council Tax Base for 2005/2006 shall be 37,022.99, made
     up of the individual tax bases for the Parishes and Towns as set out in
     Appendix 2 of this report.

Reasons for Recommendations

1    The Council is required to approve the tax base which will be used for the
     purposes of calculating the 2005/2006 Council Tax.


2    Legislation

      2.1    The Council is required by law to set the Council Tax tax base before 31
             January each year. This will enable the County Council, Sussex Police
             Authority and East Sussex Fire and Rescue Service to apportion their
             precepts between the billing authorities in the county on the basis of their
             tax bases.

      2.2    The Local Government Act 2003 amended section 67 of the Local
             Government Finance Act 1992, which means that a full Council meeting
             is no longer required to adopt the council tax base that is used when
             setting council taxes. The Council has also delegated to the Cabinet the
           authority to determine the level of discounts which will be granted in
           respect of second homes and long-term empty properties in accordance
           with section 75 of the Local Government Act 2003. The Council has
           decided not to introduce a local scheme of discounts and exemptions in
           accordance with section 76 of the Local Government Act 2003.

     2.3   The Local Authorities (Calculation of Council Tax Base) Regulations
           1992 contain the rules for calculation of the Council Tax Base for the
           District Council and Town and Parish areas. These were amended by
           The Local Authorities (Calculation of Council Tax Base) (Amendment)
           (England) Regulations 2003 in order to introduce the rules for second
           home, long-term empty and local discounts.

3   The Tax Base

     3.1   The Council Tax Base must be expressed in terms of equivalent “Band
           D” properties after allowing for discounts, exemptions and specified
           adjustments including losses on collection. The Government provides a
           conversion factor to be applied to each of the Bands A to H in order to
           obtain the equivalent number of “Band D” properties as set out below.

           Valuation                      Band            Conversion Factor

           Less than £40,000                A       6/9 of number of dwellings
           Less than £52,000                B       7/9 “     “    “     “
           Less than £68,000                C       8/9 “     “    “     “
           Less than £88,000                D       9/9 “     “    “     “
           Less than £120,000               E       11/9 “     “    “     “
           Less than £160,000               F       13/9 “     “    “     “
           Less than £320,000               G       15/9 “     “    “     “
           Greater than £320,000            H       18/9 “     “    “     “

     3.2   Occupiers qualifying for disabled relief who are in properties above Band
           A, move down a band for Council Tax purposes. Occupiers qualifying for
           disabled relief in Band A properties receive relief equivalent to 1/9th of a
           Band D tax. The annual equivalent number of qualifying occupiers is
           adjusted in lines 6a and 6b in Appendices 1 and 2.

     3.3   The Council is able to vary the amount of discount that will apply in
           respect of properties which fall into the specified categories of „second
           homes‟ and „long-term empty‟. In 2004/2005, the Council agreed that
           these discounts should be 10% and 0% respectively and the tax base for
           2005/2006 has been calculated on the basis that the level of these
           discounts remain unchanged.

     3.4   Appendix 1 sets out details of the tax base for the whole District. The
           estimated number of dwellings in the District (line 7) which will be
           chargeable for all or part of the year has risen from 40,594 in 2004/2005
           to 40,732 in 2005/2006. The total estimated Council tax base (line 15)
           has increased by 75.53 from 36,947.46 to 37,022.99 Band D Equivalent
           dwellings. This means that for every £37,022.99 of precept on the
           Collection Fund the Council Tax will be £1.00 for a Band D property. The
           constituent parts of the total tax base relating to Towns and Parishes are
            shown at Appendix 2 and will be used to calculate the addition to Council
            Tax bills relating to individual local Council areas in the District. The
            Towns and Parishes will be advised of these individual tax bases in order
            that they can assess the impact of their precept on the Council Tax in
            their area. Appendix 3 shows graphically the tax base for Lewes District
            analysed by Band.

      3.5   It is not possible to determine at this stage what the Council Tax within
            Lewes District will be, as this is dependent upon the precepts levied on
            the Collection Fund by East Sussex County Council, the Sussex Police
            Authority, East Sussex Fire and Rescue Service, Lewes District Council,
            Town and Parish Councils (which have yet to be determined), and any
            balance on the Collection Fund.

4    Setting the Council Tax

      4.1   The Council meeting on 24 February 2005 will approve the net budget
            requirement and the Lewes District Council demand upon the Collection
            Fund. It is then necessary to “set” the Council Tax for each band by
            Parish/Town area taking into account the County, Sussex Police
            Authority, East Sussex Fire and Rescue Service and Town and Parish

      4.2   Whilst the demand upon the Collection Fund must be determined by the
            Council, the mechanism for setting the Council Tax is purely an
            administrative calculation prescribed by Section 30 of the Act and
            contains no element of discretion. Whilst it is intended both to determine
            the budget requirement and set the Council Tax at the Council meeting
            on 24 February 2005, it is possible for Council Tax setting to be
            delegated to the Cabinet.

Financial Appraisal

5    There are no financial implications arising directly from this report.

Environmental Implications

6    There are no environmental implications arising from this report.

Risk Management Implications

7    I have completed the Risk Management questionnaire and this report does not
     require a risk assessment because the issues covered by the recommendations
     are not significant in terms of risk.

Background Papers

8    None


Appendix 1 - Lewes District Council Total Tax Base Calculation 2005/2006
Appendix 2 - Tax Base Calculation 2005/2006 by Parish/Town Council area
Appendix 3 - Graphical Representation of Total Tax Base 2005/2006
                                                                                Appendix 1


Line 2 – gives the number of dwellings on the Listing Officer‟s Valuation List by Band
at the statutory date of 30 November 2004.

Line 3 – sets out the anticipated new dwellings to be added during the year and
adjusted to allow for the fact that not all of these additional properties will be on the
list from 1 April.

Line 4 – shows the estimated reductions due to demolitions.

Line 5 – sets out the exemptions by band within the statutory categories.

Line 6a – sets out dwellings taken to a lower band due to disabled relief within
         statutory categories.

Line 6b – sets out dwellings added from a higher band due to disabled relief within
         statutory categories.

Line 7 – chargeable dwellings = lines 2 + 3 – 4 – 5 – 6a + 6b.

Line 8 – value of single person discounts = 25% of number of properties included in
         line 16.

Line 9 – value of discounts where there is no eligible person in the property = 50% of
        number of properties included in line 17.

Line 10 – value of discounts for second homes assuming a 10% discount = 10% of
         number of properties included in line 18.

Line 11 – value of discounts for long-term empty homes assuming a zero discount =
         0% of number of properties included in line 19.

Line 12 – total discounts = lines 8 + 9 + 10 +11

Line 13 – net dwellings = line 7 – line 12.

Line 14 – converts these into Band D equivalents by applying the Band ratios quoted
         at the top of the table. The 'TOTAL' is rounded to 2 decimal places.

Line 15 – is the total Council tax base, with the overall total for each area calculated
         by applying a collection rate of 98.5% to the total of line 14. Individual
         figures for each band are for information only and will not necessarily add to
         the total shown because of rounding differences.

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