Court of Appeal rejects legal duty for council tax purposes to disclose fact of residence

No legal duty exists that requires a resident to notify a council of their residence at a particular address for council tax purposes, the Court of Appeal has ruled.

Judges said the case would “clearly potentially have implications for other cases in the context of local government finance and payment of council tax”.

The case arose when an anonymised defendant told Hertsmere Borough Council that she had moved out of one address but was believed to still be living there possibly with a tenant.

Hertsmere alleged that there had been a false representation designed to avoid payment by her of the full amount of council tax by misusing a single person’s discount.

It prosecuted her on several counts, one of which was fraud by failing to disclose, contrary to sections 1 and 3 of the Fraud Act 2006, that she lived at the original address “which you were under a legal duty to disclose, intending to make a gain for yourself or a loss to another, namely by avoiding to have (sic) to pay council tax.”

When the case reached the Crown Court the judge was surprised to find there appeared to be no such legal duty and allowed the prosecution more time to find one, a search that proved fruitless.

The Court of Appeal noted a passage of the Crown Court judgment: “The prosecution in short say that it is obvious that there is such a legal duty, that it is ludicrous to contend otherwise. Every household, they say, has an obligation to tell the local authority if they are residing in a property otherwise how would any local authority have the necessary information to collect council tax?

“As I said…during argument, it would surely be a great surprise to everybody if there was no legal duty to give a local authority that information. I remain surprised that I have not been taken to a provision or a document evidencing such a duty. The fact is, however, that I have not been.”

In D, R. v (Rev 1) [2019] EWCA Crim 209 Davis LJ said: “We can see no real answer to the reasoning and conclusion of the Crown Court judge.”

He said the defendant appeared liable to pay council tax and Hertsmere could seek civil recovery if she did not.

“But that cannot of itself, as we see it, connote that she was obliged in law to notify the council of her continued residence,” David LJ said.

“The fact is, as we have said, that such a provision simply is not there, either within the primary legislation or in subordinate legislation made pursuant to the provisions of the 1992 Act itself.”

David LJ said it could not be implied that the duty was created by legislation and that Hertsmere had “struggled to identify the precise form of wording which…should statutorily be implied”.

Extending such a duty to all those liable to council tax would affect “potentially an enormous class of people”.

If this interpretation were correct “was there then a large department at Hertsmere Borough Council devoted to dealing with the doubtless many hundreds of notifications from persons moving into the area of their council in the course of any month? We got the impression that there was no such department at all,” the appeal judges said.

Despite the absence of any duty to notify, councils still had a number of remedies in civil recovery and enforcement and criminal sanctions where fraud was involved, he said.

Mark Smulian