Latest Public Sector News

31.08.17

Islington closes loophole that left thousands with accidental tax break

A London local authority has finally taken action to close a significant loophole which meant thousands of landlords were dodging paying any council tax despite renting their flats out to tourists and visitors.

Islington Council noticed that student flats, of which there are more than 4,000 in the borough, were being given a block council tax exemption throughout the year since students are not liable for this charge. However, landlords have been increasingly letting these flats over summer holidays to visitors and tourists in order to maximise income – but not being charged any council tax.

The authority calculated that if 1,000 such flats are rented out for the full 10 weeks of the summer break, the council tax bill would already run over £121,000 – money that is currently not being paid.

Cllr Andy Hull, Islington’s executive member for finance, performance and community safety, said it isn’t fair that landlords have effectively benefited from a tax break over the summer at a time when the council “faces ongoing cuts to its budgets”.

“Closing this loophole means that the correct levels of council tax are collected, which is fairer for all our residents and helps to pay for local services in Islington and London,” added Cllr Hull.

The council prides itself as being one of the first local authorities in the country to take such action to close the loophole, setting the standard for other potential administrations following suit.

Today’s news comes just a week after Islington successfully prosecuted a letting agent for falsely issuing renters “sham licenses” that suggested residents had no right to challenge eviction – the first trial of its kind in England.

(Top image c. stocknshares)

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