Local authority – Council tax – Class B exemption – Respondent social housing providers with charitable status claiming council tax exemption for empty properties — Valuation tribunal holding respondents satisfying conditions for exemption – Appellant local authorities appealing – Whether tribunal erring in applying presumption that conditions satisfied reversing burden of proof – Appeal allowed in part
The appellant local authorities’ appealed against a decision of the valuation tribunal that the respondents, which were two registered providers of social housing with charitable status, were entitled to an exemption from council tax in respect of a number of their properties during periods when they were unoccupied. The exemption in question was contained in article 3, Class B of the Council tax (exempt Dwellings) Order 1992 (SI 1992/558) which provided: “Class B: a dwelling owned by a body established for charitable purposes only, which is unoccupied and has been so for a period of less than six months and was last occupied in furtherance of the objects of the charity”.
In its judgment, the tribunal had specified the four conditions for the application of the exemption in class B as: (i) the dwelling had to be owned by the body in question; and (ii) the body had to be established for charitable purposes only; and (iii) the dwelling had to have been unoccupied for a period of less than six months; and (iv) the last occupation must have been in furtherance of the objects of the charity.
The tribunal concluded that the applicant had to adduce formal evidence as to conditions (i) and (iii). However, the billing authority’s role in relation to conditions (ii) and (iv) was limited as Parliament could not have intended an authority to act as a charity regulator by scrutinising an applicant’s objects or evaluating a particular letting or other activity. There was a presumption that a charitable provider of social housing was operating within its objects and that the class B exemption was available. Although not every lawful activity of a charity was necessarily charitable, it was for the billing authority to show that the applicant had engaged in a manifestly non-charitable activity. Even if there was no presumption, the applicants still succeeded as it was for the billing authority to specify clearly what information it required to reach its decision. An application could not be rejected on the sole or principal ground that the rent charged for the last letting was the market rent.
Held: The appeal was allowed in part.
The tribunal had fallen into error in holding that vis-à-vis charitable social housing providers there was a presumption that conditions (ii) and (iv) were satisfied with a consequential reversal of the normal burden of proof. Although there was a need for such a presumption, it should be done by the secretary of state and approved by Parliament and not by an impermissible and artificial stretching of the plain words of the existing law.
A short written representation by the applicant, which might usefully be done on some kind of standard form, which addressed all four conditions directly and which stated that, based on the material held by the applicant the conditions were met and that the statement was true to the belief of the representor, should normally be enough. If such a representation turned out to be knowingly false, it would likely amount to an offence under section 2 of the Fraud Act 2006.
Per curiam: It would be a good idea if a standard form could be devised for class B applications which would conclude with a declaration of truth akin to that in CPR PD22, paragraph 2.1 and the secretary of state should consider promulgating a revision to the class B exemption which provided for a presumption in relation to condition (iv) where the application was made by a charitable social housing provider.
Richard Drabble QC and Christopher Lewsley (instructed by Ealing Council Legal Services) appeared for the appellants; Ranjit Bhose QC and Andrew Lane (instructed by Glazer Delmar Solicitors and Devonshires Solicitors) appeared for the respondents.
Eileen O’Grady, barrister
