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High Court judge finds against council in disability tax case

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Croydon’s lawyers have been reproached by a senior judge (again), as they ‘surrendered’ their case over their poorly implemented Council Tax Reduction scheme and were ordered to pay costs and damages

Winning case: Dr Yusuf Osman

For the second time in four months, Croydon Council’s legal case has collapsed even before they managed to get into court, with a High Court judge yesterday ruling against the authority in the Judicial Review brought by self-employed blind man Dr Yusuf Ali Osman, who claimed successfully that he had been wrongly charged Council Tax last year.

The cash-strapped council was ordered by the judge to pay Dr Osman’s legal costs – estimated to run into hefty five figures – and £500 damages because of mistakes the council made over its Council Tax Reduction scheme.

As Inside Croydon reported yesterday, Dr Osman had always previously been exempt from paying Council Tax, but last year faced bill of hundreds of pounds when the council changed its CTR scheme.

In the High Court, Dr Osman claimed that the changes to the CTR in 2022 were discriminatory to him as a blind self-employed person who was not able to earn the Minimum Income Floor, or MIF, of £332.50 (minus tax and NI) per week.

The judge, Mr Justice Mostyn, said that Croydon Council had basically surrendered in that it no longer subjected disabled self-employed people to the MIF and, because of the steps taken by Dr Osman, he should be credited with that. He said Dr Osman had achieved success in his claim and that the legal challenge was very well argued.

Refunds: Nearly 60 other residents were forced to pay Council Tax when they should have been exempt

Croydon Council’s 2022 changes to the CTR applied the MIF to several categories of people who were exempt from the MIF that applies under the Universal Credit scheme. The MIF was applied to Dr Osman as someone with limited capability for work. Some pensioners, disabled people, carers, students and foster parents were also affected in a similar way.

Dozens of other residents, who until 2022 had been exempt from Council Tax, like Dr Osman, will now have valid claims against the council for refunds.

It was only after Dr Osman launched his legal challenge to the council’s 2022 rules about the MIF and disability-related income did Croydon Council decide to exempt him from Council Tax.

The council has changed the scheme again for 2023 to free disabled people from the discriminatory provisions, but the scheme still affects other people who are not expected to be in full-time work. They include people who care for people with disabilities or under-threes, pensioners with a working-age partner, recent adopters, many students and foster parents.

While the 2023 scheme disregards some disability-related income, it still does not disregard other disability-related component of Employment and Support Allowance.

In November 2022, lawyers for Croydon Council took out a High Court injunction against this website to prevent it from publishing legal correspondence that they had themselves already published on their own official website. The judge in that case dismissed the council’s claims, and attempts for a third-party injunction, saying that Croydon was “trying to put the genie back in the bottle”.

Today, Dr Osman said of his bankrupt borough, “It is no wonder that Croydon Council is subject to yet another Section 114 bankruptcy notice, given that they spend money fighting legal challenges that do not have to be fought, as a result of poorly designed schemes due to illegal clauses, incompetent drafting or implementation.

Chastised: the High Court judge, Mr Justice Mostyn, was not impressed by the council

“Although the council have still not admitted any fault, the end of this story proves that there was fault.

“My fight over the past year has had a positive impact. At least 58 people other than me have had their Council Tax decisions changed and most importantly the council did change the scheme for disabled self-employed people like me.

“More broadly there are other councils doing similar things to Croydon and we must fight. Governments whether national or local cannot be allowed to treat any citizen in the way that Croydon has treated me over the past year.”

Dr Osman is represented by Leigh Day solicitor Kate Egerton. She said: “Yusuf has been thoroughly vindicated in his legal campaign to challenge Croydon Council over its discriminatory Council Tax Reduction Scheme and, as the judge said, he can be very proud of that.

“However, although the council has altered its Council Tax Reduction Scheme to address the discriminatory impact for self-employed people who have disabilities, it has still failed to address the disadvantage it has created for other groups of people who would be exempted from the Minimum Income Floor under Universal Credit regulations.

“These include carers and people with young children.

“Yusuf’s claim wasn’t able to challenge the council on behalf of these categories of people, but the way is open for someone who is still affected to bring a Judicial Review challenge against the council.”


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