Crackdown on council tax fraud

Gwynedd Council is preparing a crackdown on any residents who fraudulently claim to be living alone to pay less council tax.
A report presented to the Audit Committee confirmed that Gwynedd is currently investigating the issue after research showed that one in three Welsh people knew someone or had personally committed such fraud.
Figures revealed to councillors on Thursday showed that almost 18,000 Gwynedd households are currently claiming the 25% council tax single
person discount –  awarded when there is only one adult living at a property.
But in a bid to clamp down on any fraudulent claims – potentially costing the authority several thousands of pounds in lost revenue – Gwynedd Council will now be working with an expert in the field to identify such cases and then try to recoup any losses.
The report noted, “(We) will be working with Datatank, a leading service provider which specialises in these types of reviews and has worked with the Council in the past.
“The review will confirm the discount for genuine claimants and identify those people who are claiming a 25% single persons discount on their council tax when they are not entitled to it.
“Where incorrect claims are identified, the council will terminate the claims, writing to the taxpayer and seeking to reclaim the discount.”
The authority has been outspoken in its frustration over current laws which allow the owners of second or holiday homes to exploit “a loophole” by switching to paying business rates in a bid to avoid paying the 50% levy on such properties.
Since April 2014, over 1,250 properties in Gwynedd have transferred from council tax rates to business tax rates –  meaning they can potentially avoid paying anything to the council as long as their holiday home is available to let for 140 days a year.
Both councillors and officers have been critical of this “gap in the law”, but members were told during Thursday’s meeting in Caernarfon that while single person discount fraud is something that can be controlled by Gwynedd Council whereas switching to business rates was a matter for the Valuation Office Agency, which comes under the UK’s HM Revenue and Customs.
However, there was some better news for council coffers with income from the authority’s investments policy is set to far exceed expectations.
For 2019/20, the authority had budgeted for an income of £180,000 as a result of interest accumulated from its strategic investments – which includes loans to other bodies, banks, local authorities, money markets and pooled property and equity funds.
But while the practice of such loans has come under fire from groups such as the Taxpayers Alliance, the report noted that such investments – both long and short terms, are reaping some rewards and helps bolster the Gwynedd, Conwy and Anglesey pension fund.
It concluded, “The council’s budgeted investment income for the year is £0.18m, however the actual expected investment income for the year 2019/20 is estimated at £0.4m.
“This is based on an investment return of 1.7% for the whole year.
“There has been a significant increase due to the council now investing in pooled property funds, which was not forecasted in the budget.”

By Gareth Williams – Local Democracy Reporter