Archive: MoneySavingExpert's Money Tips Email

New. Martin's Council Tax Check & Challenge - 100,000s may be overpaying & due £1,000s back

And... are you missing out on a discount? Does your council owe you unclaimed credit?

Way back in 2007, when Take That again Ruled The World, I came up with my Council Tax Check & Challenge system - huge numbers have had their bands lowered and got £1,000s in backdated payouts ever since... and today my system gets its biggest upgrade since then.

So I'm running through three big Council Tax reductions, 1) Are you in too high a band?, 2) Are you missing out on discounts?, 3) Are you owed Council Tax Credit?. Let's do it...

Reduction 1: Are you in one of up to 400,000 homes in too high a band?

The English and Scottish Council Tax system is outdated and, in many ways, broken. What you pay depends on which valuation band, from A to H, you're in. Yet the valuation was speedily done in 1991 as a stopgap to urgently set the system up via 2nd gear valuations - ie, people driving past homes.

It was 2007 when I first set up my 'check & challenge system' and back then it was outrageous that this stopgap hadn't yet been updated. 17 years and many governments later, nowt has changed (Wales did end the stopgap with a full revaluation in 2003 - it can still be wrong, but less likely). This is why an estimated up to 400,000 homes are still thought to be in the wrong band.

If that's you, not only can you get your band lowered, you're due a backdated payout too, as Fritzyboy wrote on the MSE Forum last week: "Early this year, following Martin's advice, we checked our nearest neighbours with similar houses. We were in band G but they were in band F. We made a claim and received over £10,500 (it was our money all along)! Get checking, friends! Thanks Martin and the MSE team."

The Council Tax Check & Challenge System
Part 2: How to CHALLENGE your band

If you passed both checks, now it's time to challenge. This is where we've really put the work in to upgrade the system, thanks to MSE Kit diligently working through the detailed rules and many MoneySavers' feedback from their challenges. There's far more in our Council Tax Check & Challenge guide, but let me run through it in brief...

• Step 1: Submit a formal or an informal challenge. Formal is better as it's a set process, but it's available to fewer people.
  
  - Who can formally challenge? In general, you must've lived in the property for six months or less (it doesn't matter whether you own or rent, though for renters, courtesy would indicate you notify the landlord). So everyone should look at this ASAP after moving house.
  
  Though you may also be able to formally challenge if the property has fundamentally changed (eg, house into flats), the local area has changed (eg, nightclub being built next door) or there have been material significant drops in house prices where you are.
  
  If you can challenge formally, while you needn't officially provide evidence, we'd strongly suggest you do as it helps.
  
  - Can't formally challenge? In England, do it informally. Over the years, many people have got back to me saying "they won't let me challenge as I've lived there too long", yet the Valuation Office Agency (VOA) has a statutory duty to uphold the integrity of the Council Tax bands list.
  
  This means you can still submit a request for an informal review of your Council Tax band (use our template to help), but then the burden is on you to provide compelling evidence that your band is wrong, to persuade the VOA to do the review (the following steps show what evidence you need to prepare).
  
  In Scotland? You don't do an informal review. You should always go through the formal process. To manage expectations, that will be very tough if you don't fall into the 6 formal appeal reasons - for example, if you've just discovered you're in wrong band but nowt's changed in years, it's unlikely to work. Though I'm told it isn't impossible with very robust evidence.
  
  
• Step 2: Get your 'Property Attribute Details' (PAD) - Eng only.
  In England, the VOA holds a Property Attribute Details document about most residential properties. It includes...
  
  
  Age or period | type (semi-detached, end-of-terrace etc) | floor area | number of bedrooms, living rooms, bathrooms | number of floors.
  
  So as long as you verify you are the Council Tax-payer, you can get your free PAD from it. Yet due to likely extreme demand right now after this email and my TV show, it's unlikely to be quick - give it a month to get it back. Once you've got it, it's important to line-by-line check it's correct, for two reasons...
  
  - Incorrect details could be enough to see your property rebanded.
  - Knowing how your property is described will help you ensure you can spot neighbouring properties that are really similar in a lower band, which can be submitted as compelling evidence.
  
  There is no PAD equivalent available to you in Scotland, but think about similar factors for your home, as this is what really counts.
  
  
• Step 3: Identify neighbouring or nearby properties. You've already done this in the checks, but that was a brief check to see if this is worth spending time on. Now it's the real deal & it's the most important and time-consuming evidence-gathering step (especially if you're only able to ask for an informal review of your band).
  
  See our how to find and research similar properties section in the guide for info. You need to submit other addresses as evidence (capped at five in England), and they should be really similar to your own property, ie:

  
  - Same street/estate (though a max 10-mile radius in very rural areas).
  - Similar style/features (can't compare semi-detached to a flat).
  - Similar age (new-build can't be compared to a Victorian property).
  - Similar size (a max difference of around 10%).

• Step 4: Submit your challenge. Normally easiest online, but you can also challenge via letter (and in England, phone and email too). Submit a description of your own property, the addresses of neighbouring properties in lower Council Tax bands to yours along with a brief description of each, plus any other supporting evidence you've got. To help start you off, we've a template example.

You've sent in your challenge - what next?

There are a few possibilities. The obvious one is you succeed, in which case, well done! Expect to have your band lowered, so lower future Council Tax payments, and you'll get a backdated rebate from when you moved into the property (or 1993, whichever is later). See your rights to a backdated payout.

However, your challenge may be rejected. If it's a formal challenge in England, you can appeal (if you have strong reason to think the VOA is wrong) to the Valuation Tribunal within three months. In Scotland, you've usually six months to appeal to the Local Taxation Chamber, though it can be quicker depending on the reason.

If it's an informal challenge and it's turned down, you can't appeal and that's probably it - unless you find further evidence to support a new review (in which case, you'll need to start the process again).

It's possible to get your Council Tax bill reduced in a number of other ways. The first is through discounts... the full Council Tax bill is based on two or more adults living in the property. If this isn't your living arrangement, you may be due to pay less. Our Are you due a Council Tax discount? guide has full details, but I've designed this little graphic which I hope will speedily let you see if you may be due and thus should read it...

As Michelle emailed me earlier this year: "A big thank you Martin and the team. You recently highlighted Council Tax discounts for carers. I soon realised I should have been eligible for it, but as it was little-known, I had never applied. I am extremely happy to tell you that after enquiring I now pay 25% less Council Tax and have received over £2,000 in overpayments." So let's run through each discount category...

- Only adult in household? You may be due a 25% discount.
- All full-time student household? There's no Council Tax to pay.
- Have a live-in carer? See if you could cut your bill by 50%.

Some councils may backdate discounts too, but it's council-by-council.

Council Tax support worth up to £1,500 a year is missed out by up to 2.25m people on lower incomes. Separate to discounts, every council runs its own Council Tax reduction scheme, so what you get depends on where you live, but it can cut your Council Tax bill by up to 100%.

Many people on means-tested benefits, such as Universal Credit or Pension Credit, are often due this, but don't realise YOU MUST APPLY SEPARATELY, which is why so many miss out. See Council Tax income reductions for more.

Has your property been adapted for someone with a disability? You could drop a Council Tax band, though this has to be reconfirmed for each year.

Earlier this year, an MSE investigation found local authorities across Britain are sitting on £141 million in overpaid Council Tax, from 808,000 households.

You're MOST likely to be able to claim if you've moved out of a council area since 1993 and weren't paying by Direct Debit.

A final thought. What does all this do to councils?

Local government is struggling for funding, budgets are tight, and some councils are in trouble - it's not a pretty picture. And of course refunds and lower Council Tax won't particularly help that - though central government funding of councils does look at the council's ability to raise funds. So a lot of lowered bands may see some of that covered by higher funding - see will lower bands hurt councils? for more.

Overall though, it's worth factoring in the impact on councils based on your situation and examining the strength of your case. Yet don't let a sense of guilt overly hold you back from claiming when you're legitimately due. This is money you've paid that you shouldn't.

And sadly, as I recently spoke about at Parliament, Council Tax debt collection practices are so bad they'd make banks blush, so legitimately lowering your bill so you can afford it is sensible.