How UK households are saving a small fortune on Council Tax
30th August 2017
More than 10,000 UK households to date have been making savings in an unexpected area – on their council tax. What you pay in council tax might seem set in stone, but it turns out that thousands of properties across the country have been placed in the wrong tax band. Having your property moved to a lower tax band could be a way to save yourself hundreds of pounds a year, and best of all, challenging your band takes relatively little effort.
How Council Tax is calculated
How much council tax a household pays is based on how much the property is worth. This figure is extrapolated from its size, layout, location and character. Properties with lower values are placed in lower tax bands.
Whilst this system makes sense, it should be taken into account that most properties in England, Wales, and Scotland were classified over two decades ago, in 1991. These valuations are often referred to as ‘second gear evaluations’, since estate agents drove slowly past property after property, assigning them a tax band with no more than a glance at times.
Clearly, a lot can happen in 20 years, and your property’s value may have changed, or been miscalculated to begin with, meaning it should actually be in a different tax band. Properties in Northern Ireland have Council Tax assessed differently, on an individual basis.
If your property has recently been altered, you could be eligible for a change in the amount you pay, and you can request a reassessment on the Department of Finance Website, or via a CR3 form.
Could my Property be eligible?
Before you challenge your council tax band, it is vital to check whether your property is likely to be eligible – there are a couple of ways to do this. Firstly, if similar properties in your neighbourhood are in a different tax band to yours, this is a good indication that yours may have been miscalculated.
It’s easy to check which band neighbouring properties are in with online tools. For England and Wales, this can be done online, at the Direct Gov website which the Valuation Office Agency (VOA) provides.
If you live in Scotland, you can use the Scottish Assessors website. Both sites allow you to easily search for properties by address, and view their tax band.
If your neighbours’ tax bands are consistently lower than yours despite having comparable homes, you could be eligible to challenge your tax band, but you should first check what your property was worth in 1991.
You can do this by taking the home’s current value – if you’re unsure of this, you can estimate based on free house price websites such as Zoopla – and putting it into an online price checker (such as the one provided by Nationwide). You can then change the date to 1991, and use this price to work out which band the property should have been placed in:
|England (1991)||Scotland (1991)||Wales (2003)|
|All properties under £40,000||All properties under £27,000|
All properties under £44,000
|£40,001 – £52,000||£27,001 – £35,000|
£44,001 – £65,000
|£52,001 – £68,000||£35,001 – £45,000|
£65,001 – £91,000
|£68,001 – £88,000||£45,001 – £58,000|
£91,001 – 123,000
|£88,001 – £120,000||£58,001 – £80,000|
£123,001 – £162,000
|£120,001 – £160,000||£80,001 – £106,000|
£162,001 – £223,000
|£160,001 – £320,000||£106,001 – £212,000|
£223,001 – £324,000
|Over £320,001||Over £212,000|
£324,001 – £424,000
Properties in Wales were reassessed more recently, in 2003, but since even this was over a decade ago, it is worth checking. If the 1991 (or 2003) value of your property is lower than the range of your current tax band, it could be a good candidate for reclassification.
How to challenge your Council Tax Band
Whether you live in England, Wales, or Scotland, this can be done online. Once you have found your property using the search bar on either the VOA or Scottish Assessors site, you can click on it, and will be taken to a page with the option to click a link reading ‘do you think this council tax band is wrong?’ for England and Wales, or ‘make a proposal’ for Scotland.
For England and Wales, you can now click ‘check if you can formally challenge your Council Tax Band’, which will take you to a page of questions. Answering these questions will establish whether your property is eligible for reassessment.
If you are told it isn’t, it is still possible to write directly to the VOA, explaining why you think the tax band is incorrect. For Scotland, once you have clicked ‘make a proposal’, you will also be taken to an online form which will process your request. You should receive the result of your challenge within two months.
Is it worth doing?
If you find that your neighbours’ properties are in a lower tax band, and that the value of your property in 1991 (or 2003 for Wales) was lower than the value band it was placed in, you have a good case for applying.
If you are found to have been paying too much, you are likely to be entitled to backdated refunds as well as ongoing reductions, and some people have reclaimed and saved thousands of pounds.
However, challenging your Council Tax band is not without risk. In the majority of cases, either no change is made to the band or it is lowered, but, occasionally, the amount you pay can be raised. If neighbours’ properties are in higher tax bands than yours, or the 1991 value of your home falls into a higher bracket then your tax band reflects, you should probably avoid requesting reassessment.
Other Ways you could be saving
If you are struggling to pay your council tax, there are other ways you might be eligible for a reduction:
- If you or a member of your household has a disability, you could be eligible for a reduction
- If you are the only adult in a property, not counting students, you can apply for a 25% discount in your council tax bill
- Second or holiday homes can be granted a 50% reduction in council tax, on a case-by-case basis
- If you are selling an empty property, for example on behalf of someone who has passed away, you will not have to pay council tax on the property for six months
- Empty houses are not liable for council tax – for example if the owner is in prison, a care home, or hospital, or if the property is derelict
- Each council has an individual policy, but if you are on a low income or receive benefits, you could be eligible for a reduction in your bill of up to 100%
Challenging your Council Tax band can be a relatively hassle-free way to save money, but if you find your struggling with council tax debt then please give us a call – good luck saving!