Council Tax increases 2024/25: how some can cut their bill

Household money


06 May 2024

With research revealing that hundreds of thousands of households may be able to cut their Council Tax bill by requesting their property is moved to a lower band, we explain how you could potentially reduce the amount you pay.

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More than a third of Council Tax appeals successful

Most households are set for another year of crippling Council Tax hikes, with a typical Band D property in England facing a £2,171 bill, which is an increase of £106 from last year.

Nevertheless, there is some good news as new research from Money Mail has revealed that 99.6% of people who appeal the amount of their Council Tax either see their bill fall or remain the same.

For many people, it is a fear of facing an even higher bill that prevents them from challenging their bill by asking for a reassessment of their properties banding.

However, the research found that just 0.04% of the households (or 10 properties) that queried their bill in the year to April 2023 were moved into a higher band.

In contrast, 37% of households that appealed their banding (8,430) were moved into a lower (and less expensive) band.

Overall, the majority of households (62%) that challenged their band ended up remaining in the same category.

According to the research, these results mirror those of previous years, with just 0.13% of homes moving up a band after appeals in 2021/22 and 0.15% in 2020/21.

In this guide, we examine how Council Tax banding works and how you can appeal the amount you pay.

Council Tax hikes for 2024/25

Under current rules, Local Authorities have the power to increase Council Tax rates by up to 4.99% every year tax year.

In normal circumstances, any increase of 5% or more will require a referendum, but there are exceptions to consider.

For example, the Local Authorities of Birmingham, Slough, Woking and Thurrock: as these councils have declared bankruptcy, they've been given special permission to roll out bruising 10% increases.

Overall, this means that the average increase for a Band D property in England will be a massive 5.1% during the current tax year.

In contrast, Council Tax rates are currently frozen for those living in Scotland.

Why does Council Tax keep soaring?

Essentially, councils feel they have little option but to maximise the income from Council Tax, with residents having to find the extra cash as a result.

As Sam Corcoran, vice-chairman of the County Councils Network, explains: "Authorities face a £1.1 billion budget shortfall over the next two years. 

"With Council Tax now accounting for two-thirds of the average county authority's funding, we have little choice but to take the difficult but necessary decision to raise Council Tax by 4.99% to continue to protect services and ward off the threat of financial insolvency in the future."

Below is a breakdown of tax hikes across England for the 2024/2025 financial year.

Council Tax is just one of many taxes – click here for our complete guide to cutting your tax bill, including Income Tax, Inheritance Tax, Capital Gains Tax and more.

Thousands in the wrong Council Tax band

As mentioned earlier, it’s possible to challenge the amount of Council Tax you pay by appealing your property’s banding.

This is important because many households are currently in an incorrect Council Tax band, which means you could be paying the wrong amount on your bill.

In fact, MoneySavingExpert reckons that up to 400,000 households in England and Scotland may be in the wrong tax band precisely because of the way the bands were calculated back in the early 1990s.

This can be an incredibly costly issue too; you might pay thousands of pounds more on the tax than you need to, without realising it and without having had any say.

So, how do you go about getting the money back if you’ve been wrongly charged?

Council Tax bands: why they matter

The Council Tax system was established in 1993 when every property was placed in a valuation band. It replaced the old rates system based on the rental value of homes.

In England and Scotland, the bands range from A to H, with A being the cheapest, and are based on valuations made in 1991.

In Wales, the bands range from A-I, with A again being the cheapest and are based on valuations made in April 2003.

So, properties in England, Wales and Scotland haven't been revalued in a pretty long time.

That means you may have moved into a different band without realising it, and as a result, you could be forking out more for your Council Tax than you should be.

What are your neighbours paying?

To establish whether you should be in a different valuation band, it's worth finding out how much your neighbours pay for their Council Tax – you may find that even though they live in a similar or identical house, they're paying a lot less than you.

We’re not suggesting you go knocking on your neighbour's door to investigate (not unless you want to, of course).

All you need to do is go to the Council Tax Valuation List. Just enter your details and you'll find all the information about which Council Tax band you and your neighbours are in. It's that simple.

How to appeal your Council Tax band

If you do find you're in a higher band than many of your neighbours, it's worth contacting your local valuation office and challenging your Council Tax band.

In some cases, you can make what's known as a ‘proposal’ – in other words, a formal application to have your band changed.

As part of this process, you should explain the  reasons you believe your band should change and explain which band you believe you should be in. Remember, it’s a good idea to provide as much evidence as possible to support your claim.

 Note, this is for England and Wales only. Taxpayers in Scotland should visit the Scottish Assessors.

You'll get a decision within two months. Either you will be moved into a different band, with your payments adjusted, or you'll be told why your band cannot be changed. 

If you're successful with your claim, the great thing is you'll be entitled to a refund of your overpayments from when you moved into the property.

However, if your claim isn't successful, you can still appeal to an independent valuation tribunal. You can find more information on this here.

The tribunal is free, but you must appeal the valuation office's decision within three months of it making that decision.

Discounts and exemptions

Even if your home is in the correct valuation band, there are other ways to get a discount on your Council Tax. But before you get too excited, there are strict criteria for assessing whether you're eligible.

For example, you might get a reduction if you or someone in your household is disabled.

What's more, if you're the only adult living in your home, you'll get 25% off your bill. It's worth bearing in mind that when you're working out how many adults are in your home, certain people won't be counted – such as students, who do not have to pay Council Tax.

So if you're living with a student, you will only have to pay Council Tax based on one adult living in the home.

If you have a second or holiday home, you will still need to pay Council Tax for it. But you can get a discount of up to 50%. You'll need to contact your council to find out if you can get a discount, and exactly how much they are willing to offer.

In some cases, you won't have to pay Council Tax at all, whether this is only for a short period, or indefinitely.

For example, if you're selling an empty property on behalf of someone who has died, you won't have to pay Council Tax for six months from the day you get probate.

Other homes don't get a Council Tax bill for as long as they are empty.

They include homes of someone in prison, those who have moved into a care home or hospital or those that cannot be lived in by law as they are derelict.

If you have been carrying out major home improvements on an empty property or building a new property, then you will also be able to avoid Council Tax for a while.

You'll get a 'completion notice' from your council which will tell you the date you must start paying again.

Council Tax Reduction

Council Tax Reduction replaced Council Tax Benefit in April 2013. It could reduce your bill by as much as 100%.

You may be eligible if you’re on a low income or claim benefits. Each council runs its own scheme, so the details vary by area.

What you get depends on things like your household income and how many children live with you.

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