Six ways to slash the cost of council tax
You may get backdated cash
The coronavirus-driven financial cataclysm is leaving millions struggling to meet bills. One of the biggest is council tax, yet many assume there’s no way to reduce it. That’s not correct. Let me run through six things everyone should check. Council tax was introduced in 1993 in England, Scotland and Wales (Northern Ireland works on a rates scheme). It’s a payment primarily based on the value of your home – homes are banded from Band A, the least expensive, to Band H, the most, (Band I in Wales). More detailed help with all these tips can be found at mse. me/counciltax.
1Check if you can get a payment holiday from your council. If you’re struggling to meet your council tax payments due to coronavirus, ask your council for help.
There’s no one-size-fits-all rule here. My team asked 20 councils, of which 19 said it would offer a deferral on a case-by-case basis, and only one said it wouldn’t. So, while there’s no certainty, it’s definitely worth asking.
2On universal credit / benefits / low income, you could get up to 100% off. Council tax reductions are long-standing discounts of up to 100%, which you apply for directly with your local council (details of your council is at gov.uk/apply-council-taxreduction). Clearly, many more people are now eligible, as so many more are claiming universal credit (do apply for that first, if you’re planning to try both).
The reduction amount depends on your council and circumstances, and some councils may let you backdate the reduction, but you’ll need to check.
Plus, in England, some could get £150 off the bill backed by a £500 million Covid-19 hardship fund. If eligible, the discount will be applied automatically.
All those on the guaranteed element of pension credit are due a reduction too, as well as some on the savings element.
3Check you’re not one of up to 400,000 homes in the wrong band. It’s estimated that there’s currently around 400,000 homes in England and Scotland on the wrong council tax band that have been overpaying, possibly since 1993, so you could be owed money back. In 1991, houses were valued by people driving by – it’s known as 2nd gear valuations – and it’s never been done since (Wales has more recently been re-assessed).
I came up with my ‘check and challenge your band’ system in 2006, and I’ve had 10,000 successes since. First step is to check whether you’re in a higher band than your neighbours, at voa.gov.uk in England and saa.gov.uk in Scotland.
If it shows you’re in a higher band, remember it could mean their band is too low. So next you need to do a valuation check, effectively back calculating what your house was worth in 1991 when bands were set. Don’t worry, to make this easy I’ve a free tool to help atmse.me/ counciltax.
If BOTH of these stack up, then it’s worth asking the council to check if you’re in the right band. But don’t just have a go without doing my two tests first, as it could mean your neighbour’s band goes up. And when it works, it works well. Karen emailed me to say: “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.”
4Do you live with someone with a ‘severe mental impairment’? You could be missing discounts worth thousands. If someone has a diagnosed severe mental impairment, which includes Alzheimer’s, Parkinson’s, strokes and more, then they may be disregarded for council tax purposes. This means they don’t have to pay council tax if they live alone, and get 25% off if they live with one other adult. Plus, some councils backdate it, leading to thousands of pounds paid back. This can be complex, so read my full guide to brief yourself at mse. me/smi.
5Do you live alone or with under-18s? If you’re living alone, you’re entitled to a 25% single person’s discount, which can be backdated. Plus, anyone under aged 18 and full-time students are disregarded for council tax purposes – therefore, live only with an under-18 and you pay the single person’s discounted rate. All-student households pay nothing. Live-in carers are also exempt if they look after someone with a disability who isn’t their partner, spouse or child under 18, for an average of at least 35 hours a week.
6Had your home adapted for a disabled resident? Rather than a discount, you may be able to get your council tax band lowered.