How Can Local Authorities Identify Single Person Council Tax Fraud

Single person council tax discounts offer a valuable financial relief to individuals living alone in the UK, reducing their council tax bill by 25%. However, the system is susceptible to fraud when individuals claim the discount but do not meet the eligibility criteria. 

According to research carried out by Cifas in 2024, 1 in 5 (21%) individuals revealed they, or someone they knew, had fraudulently claimed the discount in the last 12 months – an increase from 19% in 2022.

Single person council tax fraud has a significant financial impact on council funds, reducing the resources available for essential public services such as education, waste collection, social care, and infrastructure maintenance. 

In 2022, the National Fraud Initiative (NFI) detected £17.2 million in fraud related to the Single Person Discount (SPD) on council tax in England.

This shortfall forces councils to reallocate budgets, potentially leading to cuts in services or higher tax rates for honest taxpayers to compensate for the loss. Additionally, fraud undermines public trust in the system, creating a perception of unfairness and diminishing compliance with tax obligations. By addressing such fraud, councils can ensure fair distribution of resources and maintain the integrity of local funding systems.

How Can Local Councils Discover Council Tax Fraud?

Local authorities must actively identify and address fraudulent claims to ensure fairness and maintain essential public services funded by council tax revenues. Below are the key methods authorities can use to detect and prevent single person council tax fraud.

Data Matching and Cross-Referencing

Local authorities increasingly rely on technology to identify discrepancies by cross-referencing council tax data with other databases, such as:

• Electoral Roll: To check if additional adults are registered at the property.
• Credit Reference Agencies: To detect shared financial activity or linked addresses that indicate cohabitation.
• DVLA and Employment Records: These can reveal additional residents at an address.

Use of Advanced Analytics

Modern software solutions employ predictive analytics and machine learning to identify unusual patterns or anomalies. For instance:

• Properties with regular utility usage levels that align with multi-occupant households.
• Recurring patterns of single person discount claims from properties with frequent changes in occupancy.

Encouraging Public Reporting

Local councils often encourage residents to report suspected fraud anonymously. By creating awareness of the financial impact of fraud, councils can enlist public support in identifying dishonest claims. 

Regular Discount Reviews

Many local authorities conduct routine audits of single person discount claims. During these reviews, claimants may be asked to confirm their living arrangements and provide evidence, such as utility bills or tenancy agreements.

Social Media and Online Investigations

In some cases, investigators use publicly available information on social media platforms to verify an individual’s living arrangements. For example:

• Photos or posts indicating cohabitation or shared responsibilities.
• Updates on personal relationships that suggest a change in living arrangements.

While controversial, this method is used sparingly and must comply with data protection laws.

Enforcement Actions and Penalties For Council Tax Fraud

When fraud is identified, councils must act decisively to recover lost funds and deter future offences. Common actions include:

• Backdating council tax bills to recover the unpaid amount.
• Imposing penalties, which can include fines or prosecution for serious cases.
• Publicising successful fraud investigations to deter others from making false claims.

Using Marks Out Of Tenancy To Find Single Person Council Tax Fraud

Our OccupID data solution provides local authorities with accurate occupancy rate estimates for domestic properties, helping to identify single person council tax fraud quickly and efficiently, without relying on costly or outdated traditional methods.

By collating data from over 70 sources regulated by the Financial Conduct Authority, we calculate the estimated number of residents at a property. This allows you to investigate individual properties, streets, postcodes, wards, or entire boroughs with ease and precision.

We aim to deliver comprehensive data insights within 7 days of your order.

Want to learn more? Book a slot in our calendar and let’s discuss how we can support your efforts.