Summary
The Sandwell Metropolitan Council formed a new tax plan pursuant to a national change in tax law. Previously, low-income persons would be given financial assistance to pay council taxes, whereas under the new plan, individuals’ tax liability was lowered based on financial status. The relevant statute stated that local authorities would create locally-tailored plans to determine tax liability by creating classes based on income, capital, and number of dependents. The plan was to be published as a draft, and the local authority was required to consult with interested parties. The Sandwell Council formed a draft plan, which did not include the residency requirement, and organized a public consultation. It was at the last hearing before the full Council that a member proposed a two-year residency requirement to discourage individuals from moving from areas with high property values to areas with lower property values, in pursuit of lower tax liability. The measure passed without substantial discussion and no public consultation. Prior to the lawsuit, 3,600 people were denied lower taxes because they did not meet the residency requirement.
The residency requirement was challenged by three women. One of the women, Sheila Winder, in her early 50s, was born in Sandwell and lived there for most of the first 46 years of her life. In 2008, she was forced to move a few miles away to neighbouring Dudley because she was suffering from domestic abuse, and she eventually became homeless and was moved by Dudley council to a women-only hostel in Sandwell. The two other women also lived in Sandwell for most of their lives, but not portions of the two years prior to the tax plan, one facing housing instability due to worsening mental illness, and the other having recently been widowed. Each of the women were on extremely limited incomes but had been denied lower tax liability due to the residency requirement. They asserted that the requirement was outside of the legitimate purposes of the statute, and alternatively, that it was irrational, and resulted in indirect discrimination against women, victims of abuse, and non-EU citizens and refugees (pursuant to European Union law, section 19 of the Equality Act, and Article 14 of the European Convention on Human Rights and its First Protocol).
The Court agreed with the women that the statute unambiguously states that classes must be defined by financial need, and public bodies creating the classes are bound by the statute. It was not legitimate for the Council to impose the residency requirement to avoid subsidizing individuals who financially qualify for lower tax liability. The clear intent of parliament was to care for those in need, and if the residency requirement spread, it means people could choose to go on public benefits rather than move, and it could make it difficult for people to escape abuse or care for ill family members. The Court further held that the lack of consultation rendered the procedure leading to the residency requirement unlawful. Considering discrimination, the Court held, among other things that the residency requirement is indirectly discriminatory against women, because women are substantially more likely than men to suffer from domestic violence which might compel them to flee to a different local area, those fleeing often have very limited resources, and a person fleeing to Sandwell will not meet the residency requirement.
Additionally, the requirement was illegal because there was no evidence even one individual had moved to take advantage of better tax benefits, and the requirement had been adopted without any real debate or consideration of the consequences.
