Council taxing annex

[Nextdoor55]

Dear Mumsnetters

I'm posting for advice. Local council driving me insane. Bought house with annex for eldest child with disabilities, however she didn't want to move in & so we let it for a month to friends for expenses.

Some nice neighbours ratted us to local council for having someone in it, council tax then sent us a letter, saying they were going to look to have the annex banded for council tax.

Annex was converted from part of the house in 2001. Council tax increased following this to account for extra space (it was previously a warehouse).
In argument with local council who are like robots to deal with.
Main point is that the annex has a planning restriction which means it has to be used as part of the house & cannot be viewed or used as a separate unit of accommodation. Renting it out breaches the planning. Pointed this out to council tax & they said tough, it's with valuation office (voa).

We're being ping ponged between council tax & valuation office who are both saying it's one another's responsibility & not theirs.

Annex was passed with a kitchen, bathroom & bedroom in 2001.

Is there anything we can do to keep the council tax as it is? We're trying to move house & it's interfering with the sale.

Also worried that no-one will want to buy if we have an annex no-one can rent or do much with but have to pay double council tax for as it's considered a second property.

Also does anyone know what T means in the attached image?
That sentence is confusing. Although if we meet it we don't have to pay apparently

Isn’t it because you let it out?

I think the OP is saying that they just asked the friends to cover expenses while staying, so ‘letting’ is maybe a misnomer?

You need a decent conveyancing solicitor, OP (given that you’re selling), based locally so with contacts at the council.

Whether it has a separate entry in the Valuation List is a matter for the VoA.

What do they say?

What does your solicitor advise? If it’s holding up the sale, I would involve the solicitor.

Someone called from the voa & we explained the situation they then said they'll go back to the council to see what they say... although I do get the impression that they're more 'human' than the council workers, we do know what the council will say so that wasn't what we wanted to hear.

I've tried to follow this call up but they say that they're have no record of any contact from the council. I'm getting the impression that there is a record but no-one knows where it is, so there's actually two records in the VOA, the one they're using for us & one they've recorded from the council & they've not matched them up. It's frustrating.

Meanwhile the council are saying they've made a report to the voa which I'm sure they have.

We've not yet sold but it's something that we do need to be clear on, the solicitor we have asked to handle the sale pinged it to their litigation department but they have written back to say they won't deal with it. So we're thinking of going somewhere else.

Council Tax and its backwaters maybe more the territory of Chartered Surveyors than Solicitors.

Does this help?

https://www.mytaxaccountant.co.uk/post/separate-dwelling-for-council-tax

I'd suggest contacting the Valuation Office in writing and asking them what exactly they have been asked to do. Has anyone from the Valuation Office been to look at the property. It's difficult to see how they can decide whether it's a place in its own right without doing so.

As the article notes, were the Valuation Office to decide the annexe is a separate dwelling you can appeal to the First-tier Tribunal.

We have an annexe that my folks live in, currently band W as they are elderly/dependent. We know that it’ll be Band A when they no longer live there, we have similar restrictions to you @Nextdoor55 and similarly can get no joined up sense from the council! We’ve been told we need a specialist to help us sort it out

Ah thank you. What sort of specialist would that be do your know?
Yes council are pretty standard tunnel vision with no sense, if you talk to them a couple of times highlighting the holes in their argument it's "go away"
It's pretty bad. But if you have any ideas on what sort of professional we could go to let me know

It has been a while since I worked in council tax but I feel like the fuck up is with the council. The VOA are the ones who assess the dwelling and decide the band for the property and the council are the ones who raise the bill.

It seems from what you have said that the VOA banded the property back in 2001 when the annexe was constructed and you probably have a T exemption for the annexe due to the original planning application and stipulations from the council when planning was granted. When you moved in what did you council tax bill say? I never billed T but have billed the W exemption for elderly relatives.

The council have (I believe) wrongly raised a separate record usually done when no building or planning flags a construction. On the VOA website my house has an "improvement marker" as I have extended my property so on the sale of my house the VOA can either visit or refer to planning records to see if they need to raise my council tax band.

In your case I would put everything in writing to the manger of council tax and ask for a response in writing from the council asking for their reasoning in billing it as a separate annexe. State that renting it out breaches planning etc, that this was valued by the VOA and the council tax increased at the time to reflect the alterations.

Where I worked I could walk down a few flights of stairs to the planning department and speak to them directly, they could pull out planning documents which helped see what was said via planning at the time. But it depends if the ctax department is anywhere near it and it also depends on how much training the person you spoke to had.

@MrHowardsPears but the OP was renting it out/using it as a separate dwelling. So how does pointing out to the council that she breached planning regulations help with this situation?

@DaniMontyRae like I said it has been a while since I did council tax and it is for the VOA to decide. All I can say is that sometimes councils do get it wrong and some people aren't the sharpest tools in the box but are the loudest. I worked with some incredibly knowledgeable people who had been there since rates days and we had a full manual of procedure to refer to with all the exemptions and discounts plus all the case law challenges with the court case numbers for us to quote.

It would all depend what is in that original planning document which will be in the planning department but the council tax was raised to reflect the renovation at the time. This may mean the VOA has to amend the main dwelling banding if the then band the annexe too. Also letting some friends stay for a month may or may not be considered renting it out considering the responsibility of landlords with deposits, gas and electric certs and tenancy agreements.

Plus some things are just subjective ie couple buy empty house and want an A class exemption as they claim it is uninhabitable as the kitchen is something from the 1940s but Betty in her 90s had been living there using that kitchen 2 months previous. There were also locally applied rules due to central government never coming back to clarify certain situations so as a whole we billed a particular way across our area. We often had interesting talks with other authorities about these sorts of issues.

I read one authority went down to a 4 day working week due to staff retention and constantly needed temps to cover staff shortages. Sometimes people don't want to back down from their position. The OP has already admitted the planning breach but I would clarify it was friends staying and sometimes friends give money to cover bills when staying in the house. It wasn't a 6 month tenancy.

Thank you for your knowledgeable post. The original planning document outlines a 1 bed annex, but was passed by building regs as an extension. The bill went up with the council tax just after it was built which we assume was to reflect the additional space.

The council tax bill just says one bill I can't see it says anything other than a normal council tax bill, just 'E'. There's a possibility that the council haven't registered it as an annex? Due to the building department passing it as an extension?

Yes the council know that we let people stay but not for money, the planning have said that we can do that but we're not actually allowed to rent it out.

Our argument is that by billing us separately the council are breaching their own planning condition, they have said that it can't be viewed as a separate space from the house, & that it can't be considered as a separate dwelling. In my view if you ask for council tax then they're saying that it can have it's own address & services afforded by council tax attached. I don't see how they can have it both ways. But I am seeing it from a layman's perspective so I could be way off.

@Nextdoor55 The way I am looking at it from far away, is that the VOA decided it was part of the property and not a separate dwelling. They are the ones who decide banding, not the council.

As I said usually if the council raise something it is because of a report and they then arrange a site visit by a visitation officer (I think that is what they are called, I will circle back to that in a minute). The visitation officer (part of the council, not VOA) makes a report based on what they find and it isn't necessarily arranged with the owner. If an extension has been built under permitted development but no building regs (as seen on property/DIY board loads) then there is no flag for the VOA to consider re-banding on sale. They don't know it has taken place.

This isn't the case for your property. Your property has already been banded and that is why I question what the council tax department is doing and why it should be raised as a query in writing from the manager, do not accept any more phone calls from them.

Visitation officers are the ones to check empty properties etc to make sure they are still empty. The VOA also keeps an eye on sold prices to detect undeclared work which has potentially increased the band of the property or very reduced prices to avoid paying Capital Gains etc.

Having slept on this I think I wouldn't even put your side forward but simply ask for their explanation as to why this is now considered a separate dwelling when the VOA banded this property back in 2001 as a whole house under an E band.

Thank you I have done this. I've sent them the screenshots of the increased banding from 2005 when they would have banded the entire property. It's their mistake if they didn't consider it back then it was all there in the planning history for all today see & it still is, with drawings & everything, bedroom, bathroom, kitchen.
The only thing that did stand out is that the 2005 banding doesn't state an 'improvement indicator' & not sure why that would be. However I've looked at similar properties at that time & it wasn't a standard to elevate the banding.
And you're right they've skirted it, I did point out to them that it was rebanded in 2005 & they've ignored this point entirely. They keep talking about doors & letting it & not being allowed to at the same time...despite that we aren't letting it anyway.

I thought the increased banding for yours was on the sale of the property in the past. Rates days used to see amounts increase immediately and it meant people wouldn't improve a property because it would cost them.

When Ctax came in it was decided that the next person would pay the increased ctax band as as a result of an improvement. This is the VOA website which when you put your postcode in shows the banding of every property on the street. To see if it has an improvement indicator you have to click on the individual property address.

https://www.tax.service.gov.uk/check-council-tax-band/search

If a banding change has been done whilst under the same owner then it is where they mis-banded it in the first place. Because Ctax was rushed in they literally did some roads by driving down the street and saying everything looks like a D band or whatever. Newer builds are easy for me to guess a banding on them, mine is a 4 bed detached so an E band, a 3 bed detached would likely be a D, a 3 bed semi a C, a 2 bed terrace a B. That is my experience anyway. I hope that helps.

Ah I see, I think it was originally banded just after 1992 so after council tax was bought in, but then was rebanded after the improvements were completed in 2005, not sure why this would be the case except that the house was improved,but assume they would have looked at its entirety.
I will ask previous owner see what she says, the annex was actually bought as a warehouse, but was before that a house next door, they didn't band it when it was made into an annex instead put restrictions on it so that it couldn't be sold off or used independently, anyway thank you

@Nextdoor55 if planning have stipulated in their documents that it cannot used independently nor sold off independent of the main house then surely that means that Ctax are wrong. I would get hold of the decision document from planning whereby planning is granted and stipulates the conditions. I would submit a copy of that to Ctax but again, at this point I would only be willing to deal with the manager not some random in the ctax department.

To be able to sell it you would need an application to planning to allow it to be sold separately. Just like when some integral garages are converted a planning application is made for a change of use.

If you don't have the full set of documents for the planning I would be arranging a meeting asap with them to view all docs. There is usually a small fee to copy documents and a large fee for any building regs docs from personal experience.

Thank you. We have all the documents from the planning including the drawings from Wayne back in 2001 & the layout hasn't changed since then, I am hoping that they are wrong because they're on about it being a second property & council taxing it as such which will be expensive.
The fault I think is with the council, but they've now sent the request to voa to consider, who seem a bit more reasonable actually than the council.

@Nextdoor55 excellent re the documents. I would send a copy to the VOA as well to show the planning decision restrictions. Best of luck with it. Please update the thread when this is sorted.

Had a further conversation with voa yesterday, they said that they didn't know whether planning restriction that the annex can't be used as a separate unit of accommodation in it's own right over steps that the annex should be council taxed & seen as an independent dwelling for those purposes.
She did acknowledge that it's a contradiction if it's council taxed because by being independent it goes against the planning condition.
Totally confused. And finding it really draining, who would be best to consult? No-one seems to know what they're doing here

It's not a contradiction because you've broken the rules.
Your extension has not been deemed appropriate for a separate dwelling - may be for a zillion tiny reasons (too small bathroom, no fire door etc). You've gone ahead and used it as such AGAINST this ruling, and therefore the council is looking to claim tax on you for doing so. Because it's an asset which is making you money, so it's taxable.
You should t have let it, even to friends, ans sadly you're paying the cost.

Seems like you are going around in circles, between the local authority and VOA office and getting no where. I would suggest contacting your local MP, who might be able to get some clarity, but that might take some time due to GE etc. it may also be helpful to speak to an ex town planner, who might be able to act for you, obviously at a price, we employed one to challenge a planning appeal, most architects know one and could put you in touch. I hope you get it sorted asap.

You're treading on very very thin ice here because it has kitchen facilities and can be used as a self-contained dwelling. My friend has an annexe and was able to keep it classified as part of the main dwelling only because there's no stove or kitchen sink. There are narrow exemptions for something staying as not classified as a separate dwelling if there are very very strict limits on how it is used but it sounds like you are being legitimately charged for it as a separate dwelling because those limits don't apply. Pay the tax which is correctly due.