• It is a property-based tax, payable in respect of chargeable dwellings, the definition of which is similar to that used for rating purposes (a pre-cursor to Council Tax). The definition includes unoccupied dwellings but excludes non-domestic (commercial) property, which is covered by business rates (seeBIM46835).
• Chargeable dwellings are split into different bands. The banding of the dwelling is determined by reference to the value of the dwelling on 1 April 1991 for England and Scotland, where there are eight bands and 1 April 2003 for Wales, where there are nine bands. The tax payable is determined by reference to the band into which the property falls.
• Liability to pay Council Tax will, in the main, fall on individuals residing in the dwelling in question. Where the tenant and the landlord live in the same chargeable dwelling, the liability falls on the landlord. Where two or more residents are both chargeable by virtue of having a similar interest in the property, each is jointly and severally liable. Spouses or civil partners living in the same dwelling are also jointly and severally liable, irrespective of whether they have the same interest. If the dwelling is empty, the owner pays the tax.
• The tax is calculated on a daily basis.

Tax treatment

Council Tax is a tax on property. In principle it may be an allowable deduction in those instances where other property-based expenses are deductible.

In the main, the person who is carrying on a trade will pay non-domestic or business rates (seeBIM46835). There will, however, be exceptions. For example, bed and breakfast establishments with fewer than six tenants do not pay business rates. Also a home in which a trader sets aside a room as an office is likely to attract only a Council Tax charge.

Thus, whether premises to which the Council Tax is applied are used for business purposes should be regarded as a question of fact. If business use is established, the appropriate proportion of the tax may be allowed under the normal rules for the deduction of expenses.