I was handed a £7.5k refund after following Martin Lewis’ tip – are you one of thousands owed cash?

HOUSEHOLDS across the UK can challenge their council tax bands and potentially save thousands of pounds.

A Martin Lewis fan has explained how they managed to receive a refund worth £7,500 in this week’s MoneySavingExpert newsletter.

They said: “Martin, we challenged our council tax band earlier in the year after watching your show and doing the relevant checks on your website. 

“Seven months later, it’s been confirmed we’ve gone from Band E to Band D. We’ve also received our refund of overpaid council tax, a whopping £7,500.”

With UK council tax on the rise, a quick and easy check online may reveal if you’re eligible for a significant refund, and lower future costs.

Properties across the UK are allocated a band from A to H and this decides how much council tax you pay.

The more expensive the property, the higher the council tax band.

However, these bands were created based on property values back in 1991, and many households may find that they should now be in a different band.

You could be on the wrong band if your council tax band is different to your neighbours.

If you challenge the band and are successful and moved to a lower band you could get a refund on incorrect payments from the date you moved to the property and pay less in council tax going forward.

More than one in four people who tried to change their band between 2023 to 2024 were successful, according to government figures.

However, there are also some risks involved with challenging your council tax that you should be aware of. 

While it is certainly possible you are on a council tax band that is too high, there is a risk you may also be a band too low. 

If you challenge your council tax band and are found out to be on too low of a band, you will be put on a higher band and required to pay more. 

This will not make you popular with your neighbours, as they will also be investigated and potentially moved up a band as well.

But don’t worry, there are a couple of ways you can work out if you’re on the wrong tax band before officially challenging. 

The first is by checking what band your neighbours are on. Compare your band with homes as similar as possible to yours.

The band of every property in England and Wales is available on tax.service.gov.uk/check-council-tax-band, and the band of every property in Scotland is available via the Scottish Assessors’ Association.

Similar or identical houses in the same neighbourhood should be on the same council tax band.

A follow-up method is through a valuation check. You will need to work out what your home was worth in 1991, which is when council tax bands were defined.

When doing this, it is also worth checking your neighbouring properties prices in the same year to avoid any anomalies. 

You can find historical sales price information on sites such as Nethouseprices, Zoopla and Rightmove, as well as gov.uk/search-house-prices.

When you know what your home was valued at in 1991, you can compare to the tables below and check it was placed in the right band at the time.

England:

A – All properties under £40,000

B – £40,001 to £52,000

C – 52,001 to £68,000

D – £68,001 to £88,000

E –  £88,001 to £120,000

F – £120,001 to £160,000

G – £160,001 to £320,000

H – Over £320,000

Scotland:

A – All properties under £27,000

B – £27,001 to £35,000

C – £35,001 to £45,000

D – £45,001 to £58,000

E – £58,001 to £80,000

F – £80,001 to £106,000

G – £106,001 to £212,000

H – Over £212,000

How to challenge your council tax band

If you think your council tax band is wrong, you could be paying more than you should. Here’s how to challenge it.

In England or Wales head to Gov.uk and contact the Valuation Office Agency (VOA) or in Scotland use the Scottish Assessors Association .

You’ll be asked for evidence that your Council Tax band is wrong and need to give the information when you challenge.

Or, simply pop your postcode onto into the online tool at tax.service.gov.uk, select your address, and follow the link to see if you have grounds to challenge your band. You’ll be guided through a checklist to help make your case.

Your local assessor will get in touch to review your case.

What are the possible outcomes?

The first potential outcome is that you get told you cannot challenge, but don’t be put off by this. 

Technically speaking, you can only formally challenge your council tax band if you’ve lived in the property for six months or less.

But, Martin Lewis recommends still contacting the VOA with evidence of why you think your band should be changed, and it should decide if it’s enough to review your case.

The second outcome is that your challenge gets rejected. If you think this is the wrong decision, you have three months to appeal to the Valuation Tribunal. 

For those in Scotland, if you’re formally able to challenge your band, but the challenge can not be resolved by your local assessor within six months, the dispute will then be referred to the Valuation Appeal Committee.

The final outcome is that your challenge gets accepted. You can expect to see your band lowered, and make sure you get a rebate from when you moved into the property, or 1993, whichever is later.

How much can you expect to save on council tax?

If you do succeed in getting your band lowered, then typically you can expect to pay between £100 and £400 less in council tax per year.

You should also expect a refund that will cover all the years you have been overpaying, backdated to when you first moved into the property. 

Or as far back as when the tax first started in 1993. Backed payments can be worth in the thousands.

LOCAL authorities can offer you a discount or wipe your bill completely depending on your circumstances through council tax support.

You can get a 25% discount on your council tax if you are the only person living in the home or if you live with other people who are classed as “disregarded”.

Someone is classed as disregarded if they are severely mentally impaired, a carer, in hospital, a care home or hostel, has another main residence, or is a student, youth trainee or apprentice.

For example, if one single adult lives with a student, they can get 25% off their council tax.

If you live with someone who doesn’t have to pay council tax, such as a carer, you could get a reduction of up to 50% too.

And, if you live in an all-student household you can get a 100% discount.

Pensioners can also get a council tax discount, including those on the Guarantee Credit element of Pension Credit who can get 100% off.

If not, you could still get help if you have a low income and less than £16,000 in savings.

Meanwhile, a pensioner who lives alone also qualifies for a 25% discount.

Low-income households or those on benefits can also apply for a reduction on their council tax.

Whether you are eligible depends on where you live.

You could also get a deferral if you’re struggling to pay your bill, or you can speak to your council about setting up a payment plan to manage the cost.

Always remember though, if you are struggling you should contact your council as early as possible.

That will avoid your situation deteriorating and landing you in trouble.