Are you paying too much council tax?

Council tax is something most of us don’t worry much about. We pay it and forget about it.

But this resignation to the inevitable means that some of us are paying too much. We look at how to find out, and what you can do about it.

What exactly is council tax?

Council tax is collected by local authorities on domestic property.  Most householders pay it, although some property is excluded, some people are exempt, and some others get a discount.

All homes are given a council tax valuation band by the Valuation Office Agency, based on the value on 1 April 1991. A different amount of council tax is charged on each band – how much exactly will depend on the figures set by the local authority.

But with the bands now 26 years out of date, anomalies can creep in to the valuation list.

A copy of the list is kept at your local authority's offices. You can also check your council tax band online here.

The valuation bands

The lower-value A and B bands tend to be for properties such as one and two-bedroom bungalows and flats or maisonettes. Two and three bedroom terraced and semi-detached houses tend to fall in bands B-C. Most two to three bedroom detached properties fall in the C-F bands, while four bedroom detached homes are mostly found in the E-G bands. The largest properties fall into band H.

What can put you in the wrong tax band?

Official figures show 40,240 people challenged their council bills last year, and more than 10,000 people have been overcharged by up to £441 in council tax because their home was placed in the wrong band.

The Valuation Office Agency found that of these, 10,120 people have been paying too much.

If you make changes to your property, like extending and adding bedrooms you could be put in a higher council tax band. This can lead to errors, for example when planning permission is applied for. People have found their band has changed even though no work has actually taken place.

How to appeal your council tax

If you believe that your home is in the wrong tax band, the first step is to write to the council and explain why you think your bill is wrong.

The council will decide that the bill is either wrong and send you a new one, or right and explain why. If the council agrees that your bill is wrong, you must continue to pay the sums listed in your original bill until the new bill arrives.

The council has two months to reply, but if you don’t agree with their decision you can appeal. If you think the council’s decision is wrong, or you don’t hear back inside two months, you can make an appeal to the Valuation Tribunal. It’s a free service but you have to pay for your own costs.

If the tribunal agrees with you, the council will have to update your bill and adjust your monthly payments.

There are also some discounts and exemptions. If only one person lives in a property, they will receive a 25% discount on their bill, and some people are “disregarded” for council tax. They include those under 17, full-time students on qualifying courses and live-in carers. There is a full list on the Citizens Advice website.

If you are on a low income or claim benefits, your bill could even be reduced to nothing. You can apply for a council tax discount here.

The value of investments can fall as well as rise and you may get back less than you invested.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Sources:

telegraph.co.uk - Are you paying too much council tax? - 11th January 2016

citizensadvice.org - Council Tax

dailymail.co.uk - One in four people successfully appeal that their home is in the wrong council tax band - 20th June 2018