Ruinous Council Tax banding – HMO or Flats?

From .Gov >> https://www.gov.uk/guidance/understand-how-council-tax-bands-are-assessed

Banding of houses in multiple occupation

Domestic properties that have separate dwellings are known as houses in multiple occupation (HMOs). Each separately let part of a property qualifies as a separate dwelling with its own band. There may be circumstances where the VOA can combine the bands.
Examples

HMOs with little or no adaptation: Where minor adaptations have been added then the VOA can put the whole property into one band. This could be where door locks are added and the occupants of the separately let parts share the kitchen and bathroom of the original house.

HMOs with adaptations to each floor: A single band can be given where each floor of a house let in parts has standard facilities and can be treated as a self-contained unit. This applies where the occupiers of the floor share a kitchen and a bathroom.

HMOs with adapted letting rooms: Separately let rooms in a HMO may have been adapted, for example, so that they have their own kitchenette or separate shower/bath and WC. They will be given their own band even though may share some facilities. In making a decision, the VOA will look at the degree to which each part has been structurally altered.

Purpose built HMOs: These properties would generally not be combined and would have separate assessments for each internal unit.

There’s more information available on houses in multiple occupation.

Your local authority calculates a separate Council Tax bill for every property banded and collects payments. The council is responsible for applying relevant discounts or exemptions.

If you believe your band is wrong, or your household shouldn’t be banded at all, you may be eligible to appeal.

As Neil, more or less alludes to above, it is not the Council that sets Council Tax banding, it is the VOA.
I've certainly heard instances where rooms in HMOs have been given their own Council Tax banding, usually because they are have their own facilities such as an en-suite bathroom, kitchen, or both.
The argument in my view would be that an en-suite bathroom or kitchen does not make a room a self-contained unit, however if the VOA are intent on re-banding rooms in HMOs then it would make sense for those affected to remove any exclusive facilities (where possible), then essentially you have one house where all facilities are shared.
The matter of tenancies either on one shared contract or all individual is irrelevant.

Adding to above. This is goverened by the council tax regs 1992. You would need to appeal to the valuation office who can amend or remove the banding. With a HMO it is the landlord who is liable for CT, but where they are individually banded, liability would fall on the tenant.

This happened to me a couple of years ago - it meant that those in what was essentially an ensuite bedroom were now paying an extra £90 a month, I argued the case with the valuation office and was told that they 'could go back 7 years' - so I had to drop it as I would be liable then for 7 years back council tax - there are 11 units. I reduced the tenants rent (they were low anyway and more on that later) and put in a couple of routers so they had 'free wifi'. The 'rooms' still rented as the rent was low - the final straw for me was that when anyone moved - even if there was no cross over period the council always managed to sent me a bill and it was easier to pay the £50 or so £s than spend time arguing with an system that rarely answers the phone and would then ask for both contracts to be uploaded and sent in. Even when tenants swopped rooms this was happening and no one had even left the building.

I decided to sell. This is now a different story. It had been a registered HMO and also banded for council tax. The person that bought it has now increased the rents by up to 75% in some cases, taken out the shared heating and water system and changed to individual so they now pay electricity bills as well and is putting in housing benefit tenants. His excuse to me when I found out was that he was only 'increasing to the LHA level'. The only people who can afford to pay this rent for a small individual unit is someone on housing benefit, my longterm tenants have been given notice or notice to pay this sky high rent which none of them can afford to do - he has also urged them to claim housing benefit and given them forms. We now have a system where it is extremely profitable to do this, to which I find absolutely shameful, my tenants who do not qualify for housing benefit and had firstly no reason to and secondly no want to and are now in infinitely worse accommodation or sofa surfing. I don't know how long it will take me to get over the guilt with this as they had done nothing wrong - and I was just looking to reduce my units due to S24, loss of allowances and the continual pestering by the local authority every time someone moved. I hope this new landlord rots in hell, but he is just making use of a very broken system. The tenants he has will never move on as they cannot afford the rent if they work and don't claim housing benefit - they can rent infinitely more space if they go into the private housing market but no one will want them as they don't work - so stuck they are while this Landlord who presented himself as a do gooder who was working with a Charity (I checked, they have never heard of him and were are horrified as I was when they heard that good tenants had been given notice and the huge increase in rent) has taken this opportunity to line his pockets.

There are far too many questions raised with this and I don't have the answers.

I am of the opinion that both local tax and all property related taxes should be abolished.

Apparently the VOA get a reward every time they identify a "new" dwelling, so they are incentivised to re-assess HMOs into individual units.
However, their implementation is inconsistent and Councils are charging inconsistently, so Landlords have no way of knowing what the rules are and whether their HMO is a single house or an assortment of Band A apartments. This inconsistency puts Landlords in uncompetitive positions through no fault of their own.

It is unfair to charge a tenant the same Council Tax for 1 bedroom as someone else pays for an entire apartment on the same road.

This inconsistency must be fixed quickly.

The end of this is that I had a phone call from a senior council officer apologising (yes) and clearly it is not an HMO and clearly the council tax banding sticks - blaming poor training of the people answering the phone and responding to my emails. They owe me £12 and she assured me that this was the end of my association with this property (I sold it 15 months ago) What they fail to understand is what I had to go through with the other officers and their own off piste decision making taking up my time and brain space. I had asked the local council for help who declined saying he wasn't 'my' councillor - I copied him into the last couple of emails and clearly he saw what a nonsense this all was and did intervene or should I say 'got dragged into it before they looked very stupid'.