Council Tax Discounts – Has the time come to end the Single Person Discount?

Chris Berry, NSL’s Account Director for Revenues and Benefits, highlights a first positive step in evolving the Council Tax system.

Since its inception in 1993 Council Tax payers who live on their own have received a 25% reduction in their bill. This is because the Council Tax is based on two elements – property and occupancy – which are split 50/50. In the original scheme an empty property which was furnished or had been empty longer than 6 months would receive a 50% reduction (the ‘property element’) and those who had single occupancy would only pay half of the ‘occupancy element’. This all changed when a number of councils scrapped the empty discount along with the second home discount, and in some cases charged more to have a property of this type.

Over the years this 25% reduction has seen to have been abused by many and the Audit Commission estimated that around 4% of Single Persons Discounts (SPD) are fraudulent. Such fraud denies Councils of much needed revenue and increases the tax base for those who pay the correct amount. It is estimated that £90 million per year of Council revenue is lost due to incorrect SPD claims. A number of companies assist Council’s with reviewing these, but the issue doesn’t seem to go away, with Council’s reporting steady cancellation rates of SPD’s after each review.

With currently just over 7.6 million discounts being claimed across the country, at an average of £330 per discount, £2.5 billion could be added to the Council tax base just by scrapping the discount.

Admittedly whilst a complete removal of the discount looks good on paper we cannot go down the same route as the Bedroom tax and have those who are on the breadline suffering when they are eligible for a reduction. Therefore, would a scheme for those in properties banded E or above to pay in full be acceptable? This could ensure that those living in small properties on their own would still be eligible and those in larger properties wouldn’t. This would affect around 749,000 Council Tax payers who live on their own in properties banded E or above.

It’s no secret that the Council Tax scheme needs evolving, but why not do it part by part rather than in one swoop? And the amendment of the Council Tax SPD seems a logical place to start.


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Notes to Editors:
NSL is a leading UK company specialising in the delivery and management of frontline services in complex public sector and regulated environments. Our core services include business process management; enforcement; passenger and social transport; street management and technical design services. We currently have over 70 contracts with local, regional and central government, as well as with the airport and the private sector, and have delivered contracts for high-profile government agencies, such as The Royal Parks, DVLA, Transport for London and Transport Northern Ireland.