Council Tax and Liveaboard Boaters

There have been a number of accusations recently that boaters do not pay Council Tax and so should not benefit from local services. This is incorrect. British Waterways pays the Government a composite levy in respect of Council Tax and Business Rates. This is collected centrally and the income is used to offset general central Government payments to local authorities through the Rate Support Grant. Therefore, anyone who pays a boat licence fee to BW contributes to this composite levy in respect of Council Tax.

In addition, BW pays direct to the local suppliers of sewage disposal and water for the sewage disposal facilities and mains tap water it provides to boaters. These suppliers are usually the local providers of mains drainage and mains water, for example Wessex Water. A few BW sanitary stations are connected to septic tanks or non-mains water supplies such as boreholes and there are private maintenance contracts in place in those cases. BW pays private contractors for the rubbish disposal it provides to boaters. On the Kennet and Avon Canal (and other areas) this is provided by Biffa. In practice, local authorities gain from this arrangement because BW collects rubbish and is responsible for the area adjacent to the waterway.

The boat licence fee entitles the holder to use the water taps, sewage disposal, rubbish disposal and recycling facilities provided by BW. In some areas BW provides showers and toilets to BW licence holders. BW provides water, sewage disposal and rubbish disposal throughout the canal network and facilities are also provided by some private operators who may make a charge.

BW may also pay Business Rates direct to local authorities on specific sites for individual reasons. This is recorded in the local authority’s Non Domestic Charge Register. The local authority should have a record of what is covered by the direct Business Rates paid by BW and what is covered by the composite levy to the Government.

Paying Council Tax is usually not a legal pre-requisite for receiving or accessing local authority services. For example, residents in a local authority do not have to register to pay Council Tax to use a library within an adjacent local authority’s boundary.

According to Section 3 of the Local Government Finance Act 1992, Council Tax is levied on domestic property. A domestic property is defined as a property that is a dwelling. Whilst a boat can be a dwelling, it cannot in law be a property. The Council Tax Guidance Manual (2008), produced by the Valuation Tribunal Service’s Legal and Publications Advisory Committee states in Section 8.2.5: “Boats are generally held to be chattels in law and are therefore not liable to Council Tax. However, liability may arise in respect of the mooring occupied by a boat”. Therefore, a boat in itself will not attract liability for Council Tax. This is regardless of whether or not the boat is used as a dwelling. Council Tax may be levied on a mooring if the mooring has planning permission for permanent residential use.

A mooring with planning permission for permanent residential use can be liable for Council Tax, but only if the boat has exclusive occupancy of the mooring. In most of these cases, Council Tax is levied on the value of the mooring and not on the boat. Most residential boat moorings are in Council Tax Band A. In some cases, if the occupation of the mooring by the boat is deemed to be permanent, Council Tax is levied on the value of the mooring together with the value of the boat, but never on the value of the boat separately from the mooring. See the Rating (Caravans and Boats) Act 1996.

If the mooring has planning permission for residential use but is non-exclusive, for instance at a marina where if a boat moves another boat can be placed in the berth and a different mooring allocated or used upon return, then the occupancy of the mooring is non-exclusive and insufficiently permanent to be liable for Council Tax. This means that the occupier of the mooring will not be liable to pay Council Tax. However, the owner or operator of the marina may be liable for Council Tax in respect of the planning permission for the residential use of non-exclusive moorings.

Many private (non BW) operators of permanent moorings, whether the moorings are residential or not, pay Business Rates. This is reflected in the mooring fee charged to each boat. Many marinas have planning permission for a certain number of permanent residential moorings. As detailed above, if the mooring contract states that the mooring is not exclusive, then the individual occupants of these residential moorings will not be liable to pay Council Tax.

Boats on BW waterways which rent moorings where Business Rates or Council Tax are charged are effectively paying the local authority twice, since they pay through the boat licence fee and in addition either through the business rates reflected in the mooring fee or through a direct liability for Council Tax.

See the Council Tax Manual – Practice Note 7: Application of Council Tax to Caravan Pitches and Moorings, available on the Government web site:
http://www.voa.gov.uk/instructions/chapters/council_tax/council_tax_man_pn/Frame.htm

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3 Responses to “Council Tax and Liveaboard Boaters”

  1. Paul Biddy MonsterID Icon Paul Biddy says:

    Interesting taxation issue…

  2. Zan MonsterID Icon Zan says:

    Brilliant article! The RBOA published a letter a while back where
    someone else tried to detail the same thing, but the confusion was all
    about what classes as a ‘hereditament’.

  3. Nick Brown MonsterID Icon Nick Brown says:

    Ah right. As usual, “it depends…”
    See Example 4 here:
    http://www.voa.gov.uk/instructions/chapters/council%5Ftax/council%5Ftax%5Fman%5Fpn/t%2Dct%2Dman%2Dpn7%2Dappd.htm

    It sounds to me dependant upon whether BW actually pays CT for a particular mooring. If so, no CT is due by the boat occupier to the LA. If not, then “maybe”….

    Typical.