Saturday, November 26, 2005

Council Tax exemption

As a doctoral student, I'm all too aware of how essential the student exemption from Council Tax is. However it seems not everyone has noticed it. It is especially shocking that the Liberal Democrats make a great virtue of being a student friendly party and yet their proposals for replacing the Council Tax would abolish the student exemption in the process! This whole matter just shows the true Liberal Democrat colours as a tax & spend party.

There are some Lib Dems who do not agree with the policy, such as Daniel Snowdon who argues against it. But will they be listened to?

This issue has not received much attention yet, not least because both main parties have not pledged to replace the Council Tax. But with both due to have new leaders by the next election if not much sooner, it is possible that this could happen much sooner.

Below is the motion I am submitting to the next general meeting of Queen Mary Students' Union next Thursday on this:

Students and Council Tax

This Union Notes

1. Local government elections for the London Boroughs are due to take place in May 2006.
2. Currently local government in Great Britain is financed by a combination of locally set Council Tax, centrally set business rates, grants from central government, local fines and other streams.(Hale, Rita and Associates "Who pays for local services? The balance of funding between government and councils" (Local Government Association, 2005), copy at accessed 2005-11-22)
3. Council Tax raises approximately 26% of local government income but is one of the few streams a local council can vary. Consequently, an increase in spending often requires a proportionally greater increase in council tax.
4. In recent years, the level of Council Tax has received much media attention and a high level of protest. Very recently, the Local Government Association of England and Wales predicted that Council Tax could rise by as much as £100 a year.
(Metro November 22, 2005, page 2 columns 3-4)
5. Full-time students are exempt from paying Council Tax until they have “completed their course.”
(Part 2 of Schedule 1 to the Council Tax (Discount Disregards) Order 1992 (SI 1992 No 548) (, as amended by the Council Tax (Discount Disregards) Amendment Order 1996 (SI 1996 No 636) ( , defines a full time student as:
“A person is to be regarded as undertaking a full time course of education on a particular day if-
(a) on the day he is enrolled for the purpose of attending such a course with a prescribed educational establishment within Part I of Schedule 2 to this Order, and
(b) the day falls within the period beginning with the day on which he begins the course and ending with the day on which he ceases to undertake it, and a person is to be regarded as ceasing to undertake a course of education for the purpose of this paragraph if he has completed it, abandoned it or is no longer permitted by the educational establishment to attend it.")
6. There is ambiguity over what exactly constitutes “completed their course” for research students in the writing up and beyond phase.
7. Currently the Council Tax is one of the most controversial charges of all and there are many calls for it to be amended or scrapped.
(E.g. IsItFair – The Campaign for the Reform of Council Tax at
8. One of the most common proposed alternatives is to have a Local Income Tax and some political parties have taken this up.
9. The exemption for students is not explicitly retained in some proposals for local government taxation reform.
10. The current weekly threshold for starting to pay income tax for most student jobs (approximately Tax Codes 471-500) is between £90 and £95.
(Tables A – Pay Adjustment Tables (Inland Revenue, 1993), Week 1 (Apr 6 – Apr 12))
11. Due to the way in which Free Pay works and the juxtaposition of the tax year and university vacation dates, the effective threshold is even lower for those only working during vacations.

This Union Believes

1. Students are presently financially overburdened and it would be monumentally unfair to give them the additional burden of local government taxation.
2. If the Council Tax is to be replaced, the alternative must include an explicit continuation of the student exemption.
3. The definition of a full-time student should be modified to explicitly incorporate research students in the writing up phase.

This Union Resolves

1. To lobby and campaign for the student exemption to be retained at all times, but to especially do this when there is high profile public debate on the future course of local government finance.
2. To write to relevant bodies and individuals, including but not limited to, the major political parties, the Office of the Deputy Prime Minister and any successor holding the Local Government portfolio, the Local Government Association, the Greater London Assembly, the Mayor of London, Tower Hamlets Borough Council and the local MP, setting out the Union’s position and concern.
3. To encourage a high level of registration and voting by students in the forthcoming local government elections to show that the student vote cannot be ignored.

1 comment:

Mustafa Arif said...

The student exemption from the current Council Tax system is reasonable given that it saves expense in means-testing Council Tax benefit for students.

However, students are not exempt from income tax, and rightly so. Some students do earn quite a bit in their non-study time (and some such as sponsored MBAs, even in their study time!) Many postgraduates have student status for doing work that is essentially part of their job - and which they see as their job. It is fair that they should pay income taxes - including local ones.

If you feel that the income tax threshold is too low (which is arguably the case since no-one is expected to live on the Personal Tax allowance, hence the tax credit system) then the threshold ought to be raised appropriately.


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