Why your council tax bill is ripping you off

Council tax bills are already set to rise by 1.8% this year - yet thousands of homeowners are set to pay a higher unnecessary premium with more than half a million properties listed in the wrong tax band. We show you how to pay what you owe - and no more!

It’s our most hated tax and in real terms our council tax burden has nearly doubled over the past decade. Figures from spending watchdog, the Chartered Institute of Public Finance and Accountancy (CIPFA), show that in 2000 the annual bill for a typical band D property, based on a 1991 house price valuation, was £800.

• Watch our Britain's most hated tax video.

Today, following the (admittedly small) 1.8% increase imposed this year, the annual tax outlay for that same home is now £1,438.72. What’s more, the average figure doesn’t tell the whole story. Regional variations have seen some homeowners paying more than others, while the house price boom seen over the past decade has dragged increasing numbers of properties in the top G and H bands.

In total, official figures show that one in 20 homes have been found to be in too high a council tax band - although anecdotal evidence suggests the true figure is far higher. So far, so bad. But in a fresh outrage, it’s been revealed this week that half a million homes have been listed as being in the wrong council tax band - without their owners being told.  

Figures from Government quango the Valuation Office Agency have emerged that show a total of 543,373 homes have been classified with the code CL26 - which means they are, in the document’s words, in need of ‘correction of inaccuracy in the council tax list’. And the need to check your bill is pressing - whoever wins the Election.  

Labour plans to revise the banding system, first established in 1991, to take into account external features such as patios, conservatories and large gardens - which could see millions pay more. The Conservatives have vowed to freeze council tax for two years - but critics claim the move will have a catastrophic effect on front-line services. The Liberal Democrats have vowed to scrap the tax altogether - to be replaced with a ‘fair local tax’ based on people’s ability to pay.  

Fortunately, you don’t need to wait until May 6 to make sure you pay what you owe - and no more. Here’s how it’s done - with one important warning.  

How to find out if you’ve paid too much

The reason you could be paying too much council tax is down to the haphazard and error-ridden system first used in 1991 to establish valuations (2003 in Wales). When the Tories were planning to introduce Council Tax in the early 1990s, the move was met with riots and widespread public anger - and this affected the valuation process.  

In order to push through the legislation quickly, the Tory Government outsourced the job of assessing properties to estate agents - and the process wasn’t scientific. Agents would drive down streets in pairs and make educated guesses on each property’s value from the comfort of their cars.  

Recent question on this topic

• fodigie asks:

  Is a Minister of Religion exempt from paying council tax?

  • 
    1967tazz answered "It depends wether or not you live in your own home or a church owned Manse. I it is your home then..."
  • 
    MikeGG1 answered "Church of England Vicars do not payif it is also their place of work. I mean doing the..."
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And that means some homeowners could have been paying too much for the past 17 years. Someone whose home was incorrectly placed in Band E rather than D, for example, has been paying 22.2% too much since 1993 - adding up to a total overpayment of nearly £2,500.  

So, the first thing to do is compare your band against other properties on your street by searching the online council tax valuation lists. Simply enter your details and you'll find all of the information about which council tax band you and your neighbours are in.  

To add further weight to any claim, you may also want an accurate evaluation of what your home was worth in 1991 and compare it to the official list of council tax bands. There are plenty of credible sources on house price data out there – two of the best are available from Nationwide and Halifax (go to the ‘historical house price data’ link). A house currently valued at £160,000 would have been worth approximately £52,000 and placed in band C.  

One important warning

One important word of warning - if your home has been extended or converted or had major renovations, the process could actually see your bill rise!     

How to make a claim

Banding appeals - known as ‘proposals’ in official terms - can be made online at the Valuation Office Agency for England and Wales or the Scottish Assessors Association. Alternatively, home owners can write to their local authority's listing officer or assessor.  

There is an official list of reasons for revaluation so it's worth citing one of these when you make your claim. For example, this could be if part of your home has been demolished (such as a garage), or if there have been physical changes in your area that could affect the value of your property.  

If your claim is rejected you can cite one of the appeal categories above and take your case up with the VOA directly.  

For more information on rebates and exemptions, use our complete guide to paying less council tax. Alternatively, find out how to get a massive tax rebate.

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