Over half of all councils are expected to increase council tax by the maximum 5% this April. 

Councils have always offered crucial public services, but during the pandemic, they’ve been a lifeline to many.

Yet council tax bills - especially if they increase - are a stretch for many, and while it’s important that people pay their dues, it’s equally worth checking you’re not missing out on legitimate discounts and reductions.

So, let me take you through my key council tax need-to-knows…

1. Up to 400,000 homes in England and Scotland are in the wrong band

Council tax was first introduced in Great Britain in 1993 (Northern Ireland has a different system). It’s a payment based on the value of your home – homes are banded from band A the least expensive, to band H, most expensive (Band I in Wales).

Before the tax came in, a stop-gap ‘2nd-gear’ valuation of all homes was done. Literally people in cars with a clipboard assessing a band. Yet in England and Scotland that stop-gap has never been updated, and is still what dictates most homes bands – meaning there’s been estimated to be up to 400,000 homes in the wrong band (Wales has more recently been re-assessed).  Some will be paying too little, some too much, all the way back to 1993, and could be backdated.

I first came up with my ‘check and challenge your band’ system back in 2006, and I’ve had 10,000s or possible more successes since, 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."

You can’t ask for your band to be lowered, only evaluated, and to stop yours, or worse your neighbour’s band increasing, there are two checks you should make.

  • The Neighbours check: Are you in a higher band than neighbours in similar or better identical homes (see your and their bands at www.voa.gov.uk in England and www.saa.gov.uk in Scotland).
  • The 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 at www.mse.me/counciltax (which also includes far more help on how to do this, and FAQs if you run into problems).

Only if BOTH of these stack up then it’s worth asking for them to check if you’re in the right band (for how to do this see the link above).

2. Live alone, with under-18s or full time students?

There’s a single-person reduction of 25%. Those under aged 18 and full-time students are disregarded for council tax purposes, so a single parent would be entitled to this. All student households pay nothing. Live-in carers in some circumstances are exempt too. 

The payment may be backdated, as Patricia recently told me “having watched Martin last year, I learnt that students may be exempt from council tax payments. I had completed a full time BA two years previously so thought I would try to make a claim for my three years of study. And within four weeks the council cleared my remaining tax account for the year and reimbursed me over £2,600. Thank you Martin I wouldn't have known anything about this had I not watched your programme.”

3. Do you live with someone with a 'severe mental impairment'? You could me missing discount worth £1,000s.

If someone has a diagnosed severe mental impairment, which includes some with Alzheimer's, Parkinson's, strokes and more, and are eligible (not necessarily claiming) for some benefits eg disablement allowance or incapacity benefit - they may be disregarded for council tax purposes. Meaning 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 £1,000s back.

This is wildly underpublicised, but I’ve been trying to raise awareness, and have had many successes, including 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!” This can be complicated so do read the full details at www.mse.me/SMI.

4. Had your home adapted for a disabled resident

Rather than a discount you may be able to get your council tax band lowered, speak to the council.

5. On universal credit / benefits 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 www.gov.uk/apply-council-tax-reduction). 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).  This is in addition to any benefits or universal credit you receive, but amounts depend on the individual councils rules. 

All those on the main guaranteed element of pension credit are due a reduction too, and some on the savings element are too.

6. Struggling financially due to coronavirus - check if you can get a payment holiday from your council

Last year, many councils were helping residents who were struggling by offering payment holidays, and some councils may be continuing help this year. There’s no one-size-fits-all rule here, and depends widely from council to council and case-by-case. So, while there's no certainty, it’s definitely worth a conversation.

Martin Lewis is the Founder of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip