Section 6 Liability Hierarchy — Who Pays Council Tax
Summary
Section 6 of the Local Government Finance Act 1992 establishes a strict hierarchy determining who is liable for council tax on any given day. The billing authority must pursue the person highest in the hierarchy: (1) a resident who is a freeholder; (2) a resident who is a leaseholder; (3) a resident who is a statutory or secure tenant; (4) a resident who is a licensee; (5) any other resident; (6) the non-resident owner. This hierarchy is not discretionary — the authority cannot choose to bill someone lower in the order while a higher-priority person exists.
How the Hierarchy Works in Practice
In most cases, the hierarchy produces an obvious result: a homeowner living in their property is liable as the resident freeholder. A tenant living in a rented flat is liable as the resident leaseholder or tenant. Complexity arises when the property is empty (the non-resident owner becomes liable), when multiple people share the same hierarchy position (joint and several liability under s.9), or when there is a dispute about who actually resides at the property.
Exception: Houses in Multiple Occupation
LGFA 1992 s.8 overrides the s.6 hierarchy for Houses in Multiple Occupation (HMOs). In an HMO, the owner is always the liable person, regardless of who lives there. This prevents billing authorities from having to pursue multiple individual tenants in shared houses where each has a separate tenancy agreement with the landlord.
Sources
- Local Government Finance Act 1992, ss.6, 8, 9
Frequently Asked Questions
- I'm a lodger — where do I fall in the hierarchy?
- A lodger is typically a licensee (position 4 in the hierarchy). If the property owner or a tenant also lives there, they are higher in the hierarchy and are the liable person. The lodger is not liable unless there is no resident owner, leaseholder, or tenant.
- Can two people both be liable?
- Yes. Under LGFA 1992 s.9, where two or more persons fall into the same hierarchy position (e.g., two joint tenants), they are jointly and severally liable. The billing authority may pursue either or both for the full amount.
Related
- wrong-person-council-tax
- council-tax-after-moving-out
- Billing Authority — Who Sends Your Council Tax Bill
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