Council tax reduction: Lower your band to save £100s

paying too much council tax

paying too much council taxSecuring a council tax reduction becomes all the more importatnt as millions of families on low incomes may soon face a rise in their council tax bills, as a result of government policy changes.

Under the Local Government Finance Bill (currently going through parliament) cuts would be made to council tax rebates.

That means individual local authorities would be left to decide how to make up the shortfalls; and to what extent the extra charges be past on to residents.

Minimise the tax pain

You can read the full news story here. Many hard-pressed families are already struggling to pay their council tax bills – with charges often mounting up to well over £1,000 per year.

Whether or not you’re hit with higher bills as a result of the proposed changes, there are certain things you can do to minimise the financial pain. Investigate all your options for a council tax reduction now and you could save hundreds of pounds a year.

Am I in the right council tax band?

First of all, make absolutely sure you’re in the correct council tax band (and therefore that your council is charging you the correct amount).

The UK council tax system was set up in the early 1990s. At that time, millions of property valuations were done very quickly, so that all those properties could be put into a charging band and council tax charging could begin.

Since then, it’s become clear that many of those early valuations were hastily done and were inaccurate. Although all homes in Wales were later re-assessed, no such process has ever been pursued in England or Scotland.

So, it’s definitely worth checking whether you’re actually in the right band to see if you might be eligible for a council tax reduction.

How to check your council tax band

You can find out which council tax band your property is currently in using this tool on the Directgov website.

The best way to check whether it should be in that band is to check the band of a few similar, nearby houses that are the same size as yours. You can find out neighbours’ bands quickly and easily uses this tool.

If there are several neighbours in similar properties who are in lower (or higher!) bands to you, it’s a sign that your band may need to be revised.

How to challenge your band

The Valuation Office Agency (VOA) is responsible for making sure you’re in the right band.

This Directgov guide explains how to contact them, and how to take your banding complaint forward.

One word of caution: If you do complain and are re-assessed, there is the potential for your band to go up as well as down.

So, you need to do your research carefully, and not just apply on the off-chance. Otherwise your money saving plan may backfire!

How much could I save?

If your band is lowered in response to your complaint, there are substantial savings to be made.

The change in monthly or quarterly payments will depend on your council – but you could save up to £200 a year or even more.

Are you entitled to any council tax discounts?

It’s also important to check whether you’re entitled to a council tax reduction as a result of your personal status. People who may be entitled to discounts (or to paying no council tax at all) include:

  • People living on their own
  • Those on low incomes (with less than £16,000 in savings)
  • Children under 18
  • Full-time college and university students
  • The mentally disabled
  • People with second homes
  • Carers
  • People who own properties that are currently unoccupied and unfurnished
  • People on apprentice schemes

Think about whether any of these apply within your family circumstances. For example, if you’re a single parent with a student son or daughter living at home, your son or daughter won’t have to pay any council tax and will be disregarded.

That means that, as the only council tax payer in the household, you’ll be able to claim the 25% single occupancy discount (despite the fact that another person lives with you).

Some local authorities will also give a one-off council tax rebate to households who agree to have cavity wall insulation fitted.

You’ll find a full guide to who can get council tax discounts on this page of the Directgov website.