Tax on self-employed - a detriment to Tower Hamlets residents
On 1 April 2017, Tower Hamlets Council introduced a policy that removed full Council Tax Reduction Scheme from its self-employed residents. The policy change to begin charge council tax to the self-employed was approved by the council’s Cabinet and the Mayor, John Biggs, on 10 January 2017.
Those who are hardest hit by the measure are mostly mini-cab drivers who are managing their living from hire purchase agreements on their cars in order to facilitate their self-employment status. They are usually working from local mini cab offices and complying with tough terms and conditions, for example, Uber's rating conditions in which they are forced to keep above 4.5 star ratings from their customers in order to remain in trade with the company; otherwise they are barred from being on the list of its self-employed drivers.
When Community Money Matters spoke to a number of Bengali cab drivers on Bethnal Green Road, this is what they said:
'We are not sure what are we to do. Our hours are unpredictable. On top of uncertainty of working hours, we now have to pay council tax in this borough. This clearly was not the case before. We are genuinely worried. We do need advice!'
The council representatives accepted the policy change may expose many residents to poverty once a number of local advice agencies, such as Toynbee Hall, raised this concern to them.They reassured these agencies that the council has put an interim measure in place until they revisit a policy change at the end of this year. They also stated that if residents are experiencing financial difficulties they should consider applying for discretionary reduction under section 13(A)(1)(c) of the Local Government Finance Act 1992. Once the council has received such a notice, it's going to withdraw from taking any bailiff action against these residents if the main reason for non-payment of the tax is linked to affordability and self-employment.
As the councils all over the UK are falling short of money to run essential services due to the reduction in public funds from central government and austerity measures, they are not shying away from charging residents who are least well-off.
If anyone who is having difficulties paying council tax and self-employed, Community Money Matters urges you to seek advice from local advice services, such as Toynbee Hall, who are monitoring the impact the policy change is having to local residents and to give the notice required to stop any recovery and bailiff action.
I am Ripon, a qualified Debt advisor for the last 5 years. This is my personal blog, all views are my own but the content is based on factual data available at the time of writing.