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Reclaim overpaid council tax

Reclaim overpaid council tax

Moved home since 1993? Check if you're owed £100+ back

Callum Mason
Callum Mason | Edited by Steve Nowottny
Updated 21 October 2020

A major MoneySavingExpert.com investigation in 2019 found there was at least £230 million in overpaid tax sitting in council coffers – and if you've moved home since 1993, you could be owed £100+ of it. Many people aren't aware they pay council tax a month (or sometimes a year) ahead. This means it's common to be in credit when you move home. If so, you are entitled to this money back – but often you need to claim it, and many don't. This guide explains how to check if you're owed and claim if you are. 

This is just one of our council tax MoneySaving guides. Also see how to check and challenge your council tax band and how to claim the 'severely mentally impaired' council tax discount.

Why are so many owed cash back?

Data gathered in 2019 under the Freedom of Information Act from over 280 councils showed across England, Scotland and Wales more than £230 million was sitting unclaimed in 1.7 million council tax accounts that were closed or inactive. (See how much your council owes below – in Northern Ireland, where you pay rates not council tax, it works differently.)

In basic terms, a council tax account will be in credit if you've paid more than you owe at any point. Normally, this isn't a problem – in fact, as council tax is usually paid in advance you'll often be in credit. But when an account is closed while in credit, usually because you or another resident has moved out or someone in the property's died, it can be an issue.

Here's why closed accounts can end up in credit (in rough order of likelihood): 

  • You pay for your council tax in advance, and the account's closed before the point up until which you've paid. Eg, if you pay for a year's worth of council tax in 10 instalments, covering April to March, but move out in mid-February, you've overpaid by a month and a half. Councils will often automatically give you a refund before closing your account – but if yours doesn't and you don't reclaim, it'll be closed in credit. 

  • You forget to cancel a payment. This means you could end up paying when you no longer live in the property – particularly likely to be an issue if you pay by standing order.

  • You get a retrospective discount, eg, if your property's rebanded. The examples we've heard of with this relate to council tax rebanding. If the person who moves into your property after you successfully applies to get the tax band lowered, this technically means that you overpaid and so a credit could be applied to your (already closed) account.

Knowing whether or not you fall into the categories above can be difficult, and we don't want everyone just calling their council on spec to find out. It'd waste your time and kill their switchboards - especially during the coronavirus pandemic when many will be needing to speak to their council for essential support. So to help, we've tried to narrow down who's most likely to be able to claim, so you can weigh up whether to try it.

Based on our research, we believe:

You're MOST likely to be able to claim if you've moved out of a council or local authority area in the last 26 years, and weren't paying by direct debit. 

We believe this is a good guide because:

  • If you moved within the same local authority area, it's more likely the council would have spotted your old account was in credit and refunded you/reduced your bill at your new address – whereas you're more likely to be owed if you left the area, especially if you didn't leave a forwarding address. 

  • Eight out of 10 councils told us they try to refund credit wherever possible, and if your council has your direct debit details, this should have been straightforward. But the vast majority of councils that do try to refund credit told us they can't if you paid by any method other than direct debit – eg, if you paid by cash, standing order or cheque.

However, to be clear, there will be exceptions – some who have moved within local authorities and/or paid by direct debit WILL be owed too. If that's you, you'll need to weigh up whether it's worth contacting your council anyway.      

Martin: 'Use this guide to try and get cash back'

Martin Lewis, founder of MoneySavingExpert.com, said: "Councils are sitting on a staggering amount of money, at least £230 million spread across 1.7 million accounts – which works out at an average of well over £100 sitting in each closed account.

"And while councils do make efforts to track down those who are owed, many don't do it well enough, especially when people have moved out of their area and are no longer their responsibility. That means we all need to take responsibility for ourselves.  

"Yet we don't want just to encourage everyone to call their council on spec – that'd waste people's time and clog up council call centres. So if you're someone who's moved home since 1993, especially if you changed council or local authority area and didn't pay by direct debit, you should take a look at this guide, see how your council does it and then try and get your money back."

Quick questions

  • How far back can I claim?

    Many councils let you claim back as far as 1993, when council tax was first established but it depends on the council.

    A law dating back to 1992 – the Council Tax (Administration and Enforcement) Regulations – says overpaid council tax should be refunded. Yet strictly speaking, councils can apply the statute of limitations to reclaims as long as they have previously tried to notify you of the credit, so in England and Wales they can stop you reclaiming six years after the account was closed, and in Scotland, five years. 

    Many councils we've spoken to though have told us they don't apply this time limit, and some have confirmed you definitely can claim as far back as 1993. 

  • I set up a redirect on my post – could I still be owed?

    You could be – but it's less likely.

    By law, the council has to try to let you know you're in credit if your account's closed. So if you set up a redirect on your post, this notice from the council would hopefully have made it to your new address. 

    Of course, there's a chance it didn't arrive, or you missed it in the excitement of moving. But in the grand scheme of things you're more likely to know your closed account was in credit. 

  • I paid by direct debit – is there a chance I could still be owed?

    Yes, you could be.

    As we explain above, we believe those who paid by direct debit are less likely to be owed, because many councils issue refunds to those paying by direct debit automatically. 

    However, about two out of every 10 councils told us they don't automatically issue refunds, even if they have direct debit details. So if your council was one of those there's a chance you could be owed. 

  • I lived with someone else – who would the council have contacted?

    If you lived in a house where there were multiple billpayers, it might have been harder for the council to establish who should have been refunded. 

    Policy on this varies from council to council. Some councils that issue automatic refunds to those who paid by direct debit told us they wouldn't be able to do this where there are multiple billpayers on an account, and would instead first have to establish who actually paid the council tax.

    So there's more of a chance your closed account could be in credit if you shared a home, even if you paid by direct debit.

    A good initial check would be to ask your former housemates etc if they have been refunded. If not, check with the council. 

  • How do I check if my old home has been rebanded?

    You can check a council tax band for any home in England or Wales on the Gov.uk website. For Scotland, see the Scottish Assessors' Association website. 

    If the band has been lowered since you lived there, you could be owed.

  • What if I registered with an old email address?

    If the email address you registered with your old council is one you no longer frequently use, it may be worth checking if it's contacted you on that address.

How do I check if I'm owed & reclaim?

The best way to check if you're owed cash – and to reclaim it if you are – will depend on your council, as some have different options: 

  • Option 1. Check if your old council offers an EASY online claims form. The councils we spoke to told us this is the best way to find out if you're owed, and for some it will be the simplest way. Just google "[council name] council tax refund form" – we found that half the time this'll take you to an online claims form, and if not it should take you to a page explaining your council's process.

    This won't be best for everyone though. Many councils' forms require you to have your old council tax reference number, and some forms we've seen are long – if either of these is a problem, try the option below instead. But the advantage of doing it this way is that if you find you ARE owed, you won't need to do anything else to reclaim. 

  • Option 2. Call or email your council. If there's no online form, you don't have enough details or the form's off-puttingly long, you can try calling, emailing or live chatting with your council instead. (You can check contact details on Gov.uk.)

    We asked 10 of the MSE team to phone their old council, and found it was usually straightforward to check if they were owed money. Usually they just had to give their name and old address – in some cases, they were asked security questions too. 

    Some, however, struggled to get through automated phone menus, and in one case an automated phone system asked for a council tax reference number. So it may be easier to email or even live chat with your council instead.

    While this may seem the more straightforward option, it's worth noting if you do find you're owed cash, you'll likely then have to fill in a form to reclaim it (or at least give further details).

Quick questions

  • How do I find my old council tax reference number?

    It should be on an old bill – though of course you may have long since shredded these. 

    Alternatively you could check old emails. 

    If you have no luck, don't think it means you can't check if you're owed and reclaim. You'll just need to contact your council.

  • How long does it take to check if I'm owed?

    Ringing the council is likely the quickest way to check – when we tried, we found they could usually tell us immediately if there was credit on our account.

    If you do contact the council by email or fill in an online claims form, it'll be slower – some we've seen say it can take up to 14 working days to deal with a query. But if you're not in a rush (after all this is money you didn't know you had) it might be better for the council if you contact it via its preferred method. Many told us they preferred people to fill in online forms, and that way you won't be jamming up the phone lines.

  • What if I think I might OWE council tax?

    In all likelihood, if you owe your ex-council money, it'll have chased you for it already. So it's unlikely you'll call your council to be told you owe cash (though of course it's not impossible).

    If you think you might owe debt, don't bury your head in the sand. See our Debt Problems guide if you're having problems.

  • How do I claim for someone who has died?

    Councils tell us someone passing away is often a reason for an account being closed, and some accounts may be left in credit. If you are the executor of someone's estate, you should be able to claim for their council tax credit, but it's possible the council won't have your details.

    Contact the council in the same way as outlined above to check if there's money owed and claim.

'I claimed back £100+ after moving'

We don't have loads of success stories as this is a relatively new guide, but here are a couple to show it really does work. 

Laurence Prax, 28, from London, recently reclaimed council tax credit after moving away from the London Borough of Tower Hamlets – though in his case, he did so after being told  by the council he could reclaim. He was owed despite having paid by direct debit, and his story (he even sent his own freedom of information request to Tower Hamlets) inspired our investigation. He said: 

I claimed back £103. I was paying by direct debit for five years from the same account with no arrears [before I moved out]. There was only credit because I left the borough part way into the month after my direct debit had gone out.

I then received a letter from them informing me that, if I wanted a refund, I had to fill out a paper form and return this to them by post.

I thought this was ridiculous given the ease of simply returning the credit to the bank account that it came from.

MSE Will also had a nice surprise, when he found he was owed money by Manchester City Council after a new tenant successfully lowered the council tax band. He said: 

Three years after I moved out of my flat, I got an email to my old email address telling me the property was rebanded and I was owed £400.

I genuinely thought it was a scam. It was only when I got round to ringing the council directly that they confirmed it was real.

We want to hear your stories. Whether you've successfully claimed, or tried to but had problems, tell us at news@moneysavingexpert.com.

See how much your council owes

Our investigation in 2019 showed 283 local authorities in England, Scotland and Wales currently had more than £230 million in just over 1.7 million closed or dormant (no longer active) accounts – an average of £137.

As almost 100 councils didn't give us the figures we asked for, the total across the country is likely to be significantly higher. 

Two councils had over £10 million in unclaimed council tax credit, and a further five had over £5 million. Only six of the authorities to respond told us they had less than £10,000 in closed and dormant accounts.

Of course, there is a wide range of factors behind the different amounts held by councils. Larger councils are naturally likely to have more unclaimed credit, and there will be differences too because some councils' records date back to 1993, and others are more recent. Some also didn't include accounts owing less than a certain amount – usually £5 – when giving us figures.

Check how many closed accounts your council has and how much credit it's holding using  our council-by-council credit list. Those with the most sitting in their coffers (when we contacted them in January) are listed below:

Councils holding the most credit in closed or dormant accounts

Rank Council Amount held Number of accounts in credit Average amount in each account
1 City of Edinburgh £13,201,363 119,061 £111
2 Glasgow City £12,790,250 65,636 £195
3 Birmingham City £6,684,216 39,274 £170
4 Tower Hamlets £6,547,419 66,072 £99

Hackney Council was initially included in this list. Its response to our FOI request asking how much credit it held in closed/dormant accounts gave a total figure of £7,473,897. However, it's since clarified a proportion of this is in live accounts and the total in closed or dormant accounts is £5,536,132.

  • What do the councils holding the most credit say?

    A spokesperson for the City of Edinburgh Council told us: "As a capital city, Edinburgh has a fairly transient population where residents move regularly from one property to the next. This can result in situations where council tax is under or overpaid.

    "We write to everyone who is due a rebate in the hope of settling payments. Because we place no time limit on collections, this means we have many cases in Edinburgh which are historic and these can still be claimed."

    Councillor Rebecca Rennison, responsible for finance and housing needs at Hackney Council, said: "We try to automatically refund credit where possible and will always send a credit statement letting residents know that there is credit on their account. 

    "To ensure residents have the maximum opportunity to reclaim any credits, unlike many councils, Hackney does not clear unclaimed credits after a set time period (often six years) but instead allows residents to claim it indefinitely. For that reason, our total credit value may appear comparatively high."

    A spokesperson for the London Borough of Tower Hamlets confirmed that it puts no time limit on reclaims and said: "When an account is closed, we send a bill detailing the credit due and advising of the refund process. When a claim is made, refunds are processed as a priority.

    "Due to resource restrictions it is not practical to individually investigate each case where a claim has not been made. A new self-service digital process will be available early in the next financial year which we hope will streamline the process."

    Glasgow City Council and Birmingham City Council did not respond to requests for comment.

This is the first incarnation of this guide. Please feed back and let us know your reclaim successes in the Unclaimed Council Tax forum thread.

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