Council tax bills rose at the start of this month in Scotland, Wales and England by an average 4.5 per cent or £75/year on a typical band D property in England (according to CIPFA). The sooner you check if you’re overpaying, the better. Here are my four council tax need-to-knows:
Someone with a ‘severe mental impairment’ should be discounted for council tax.
Like students and under 18s, if someone’s intellectual or social functioning is severely impaired (common for those with dementia, Alzheimer’s and other conditions), then provided they have had a medical diagnosis and are eligible for one of a large range of benefits, they are entitled to be disregarded for council tax purposes. If they live alone they are entitled to pay no council tax. If they live with another adult (often a carer) they get 25 per cent off – typically £400 a year. While it is a postcode lottery, some councils will backdate this. I’ve been campaigning to raise awareness since 2016.
The impact can be huge, like for Tom who tweeted “@MartinSLewis Thank you! After seeing you talk about Council tax exemption for severe mental disorders, after a brief battle I’ve claimed back £9,649.65 for my dad who suffered a stroke in 1999 and has lived alone since 2005. Thank you so much! This will make a big difference!” You can read full details on how to claim at www.mse.me/smi
In 2017 we did some mystery shopping and found 69 out of 100 councils were giving incorrect info on discounts. Some said they didn’t exist – so it’s no surprise most eligible people don’t get it. We made a series of recommendations, and this month the Welsh government has enacted them all. All 22 Welsh councils have one common, simple application form (which we helped design), and crucially there’s now consistent backdating. Anyone eligible will get a rebate back to the point of an SMI diagnosis. Hopefully Scotland will follow suit. Getting the UK government to enact these changes for England is proving tough.
400,000 households are paying the wrong amount.
It’s estimated around 400,000 homes in Scotland and England are on the wrong council tax band (Wales has more recently been re-assessed) and have been overpaying for years – possibly since 1993. You could be owed money if your council tax band is based on a ‘2ndgear valuation’ done back in 1991, when valuers and estate agents drove past houses in second gear with a checklist and allocated bands. It was meant to be a short-term measure, but it has never been redone, meaning many houses were wrongly banded.
If you are in the wrong band you are not just entitled to a reduction now, but going back to when you moved in (or 1993, whichever is more recent). Like Karen who emailed “Queried our band and got a £6,300 refund backdated to 1993 plus our monthly charge is now approx £45 less. Thank you so much.”
I first invented my check and challenge system to help establish the banding back in 2007: Step 1: Neighbours Check. See if you’re in a higher band than neighbours in identical properties. You can check via the Scottish Assessors Association at www.saa.gov.uk. Step 2: Valuation Check. Work out what your house price was in 1991 – when council tax bands were defined – as a belt and braces check. If you don’t have a recent valuation of your home, use one of a similar property, then use a house price calculator to work out what it was worth in 1991. I’ve built a free calculator at www.mse.me/counciltax
Only challenge your band if BOTH stack up. That’s because you can’t ask for your band to be lowered, just for it to be revalued. It could go up if you do it speculatively. Some who only do the first check find that the reason their band is higher than neighbours is that their neighbours bands are too low – and they get raised (doesn’t make you popular). More help on appealing is at www.mse.me/counciltax.
Moved home since 1993? You may be owed £100s
Council tax is paid one month (sometimes a year) in advance, so it’s common to be in credit. Yet if you are in credit and have closed the account, most likely because you’ve moved home, or the person living there has died, then you’re entitled to the credit back. Often you need to claim it – and many don’t.
In fact, data my team have just gathered under the Freedom of Information Act from over 280 councils, found that more than £230 million is unclaimed.
There’s no point everyone just calling their council on spec – it’d waste your time and clog up council call centres. This only really applies to those who’ve moved house since 1993, changed council or local authority area and didn’t pay by direct debit. If that’s you search for the ‘council tax refund’ form on their website and fill it in to check. Or call up the council.
Are you due a discount? There may be other reductions you may be entitled to…
– Only adult in the household? If you live alone (or with students or under 17s) there’s a 25 per cent single person’s discount.
– On low income or on pension credit? If living alone and on pension credit, or on low income and don’t have much in savings, you may get council tax support. It varies between councils, so contact it to see if you’re eligible.
– Had your home adapted for a disabled resident? If you’ve made modifications to your home for a disabled resident, you may be able to get your council tax band lowered.
Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip