Council tax is a large part of many people’s budgets, yet there’s an easy way to check you’re not paying too much and negotiate a refund if you find that you are paying too much council tax.

Please note that the information below relates to homes in England and Wales, the rules are much the same for Scotland but you are advised to check with your local council.

How is Council Tax worked out ?

The basis of valuation for council take of a dwelling which is not used for any business purpose is the amount which, subject to certain assumptions, it would have sold for on the ‘open market’ by a ‘willing vendor’ on the 1st of April 1991. All homes are placed into a band as shown below :

England Wales (pre 1st April 2005) Wales (w.e.f. 1st April 2005)
Band A up to £40,000 up to £30,000 up to £44,000
Band B £40,001 to £52,000 £30,001 to £39,000 £44,001 up to £65,000
Band C £52,001 to £68,000 £39,001 to £51,000 £65,001 up to £91,000
Band D £68,001 to £88,000 £51,001 to £66,000 £91,001 up to £123,000
Band E £88,001 to £120,000 £66,001 to £90,000 £123,001 up to £162,000
Band F £120,001 to £160,000 £90,001 to £120,000 £162,001 up to £223,000
Band G £160,001 to £320,000 £120,001 to £240,000 £223,001 up to £324,000
Band H £320,001 and above £240,001 and above £324,001 up to £424,000
Band I n/a n/a £424,001 and above

The following assumptions are made :-

  • that the sale was with vacant possession (no sitting tenants);
  • that the interest sold was freehold except for flats when a lease for 99 years at a nominal rent has to be assumed (The actual lease term is ignored);
  • that the dwelling had no potential for any building work or other development requiring planning permission;
  • that the size, layout, and character of the dwelling as well as its locality must be considered as they actually existed at 1 April 1993 or, depending on the circumstances, a later date;
  • that the dwelling (and any common parts such as an entrance or hallway shared with other dwellings) was in a ‘state of reasonable repair’.

How much council tax you pay depends on your property’s “banding”; a letter from A to H (I in Wales) which varies according to the size, location and layout of your home and uses the assumptions above. For example, the table below shows the basic council tax payable for 2006/7 in various areas for each banding (there are additional amounts payable for each band for the Fire and Police services and in some areas for other authorities such as Parish Councils, Great London Authority, County Councils etc- we have not listed these).

Band A B C D E F G H I
Peterborough City Council 695.28 811.16 927.04 1042.92 1247.68 1506.44 1738.20 2085.84 n/a
Waltham Forest (London Borough) 753.85 879.46 1005.09 1130.73 1382.00 1633.28 1884.55 2261.46 n/a
Swindon 869.59 1014.53 1159.46 1304.40 1594.27 1884.14 2173.99 2608.80 n/a
Gwynedd Council ( North Wales) 593.12 691.97 790.83 889.68 1087.39 1282.09 1482.80 1779.36 2075.92

Many people don’t realise that it is possible to challenge your banding and pay less tax, not only to the local council but also to all the other authorities that add charges to the total council tax bill.

Are you paying too much council tax on your home?

Sadly the bandings above haven’t been revalued in England since the system began in 1993 so many are out of date – especially if you’ve had something like a garage or major road built next to your house although you could also be paying too little if your home’s improved by adding an extension for example.

It’s worth noting that properties in Wales were revalued last year; so if you’re Welsh the banding is likely to be more accurate and you are less likely to be able to win an appeal.

Do you live by yourself ?

Adults living alone (or only with children) are entitled to a single person discount of 25% off their council tax bill, this helps elderly people in particular but also means that any single person can claim (note that it’s the number of adults living in the house that counts so if you are single but live with your partner you can not claim this discount, but you can claim if you are a single parent).

Also students don’t pay council tax, thus two students together don’t pay. If a student lives with a non-student, then as the student doesn’t count the house’s council tax bill is reduced as if its just a single adult living there.

If you fall into either of the above categories you should contact your local council, you can find links to individual council websites on the ‘Valuation Office Agency’s web site under the Group offices links.

How to challenge your council tax by challenging your banding

The Valuation Agency web site allows you to check which bands your neighbours homes are in. If they are similar sized homes but are in a lower banding than you, there might be a chance you can launch a successful appeal against your own banding.

Just visit the Valuation Office Agency site and click “go” to start. Enter the billing authority (the local council) or your postcode into the right box and click on the “go” button again. Next enter your postcode again (or street name of you prefer) and click on the “go” button once more. A list of homes that match the search criteria are displayed with the address, tax band and date that the band became effective. If you feel that your property band is higher that similar properties in the results and that this is unfair the first step is to call your local listing officer, who will explain how the band was decided.

If you are still unhappy then you can appeal online to the Valuation Office Agency to get your band changed.

If your case is rejected and you bought your home less than six months ago, then you have right of appeal to the independent Valuation Tribunals Service, if you have lived in your home for longer than that you have no such right of appeal. This is because bands may change when a property is sold, for example a change has been made to the property such as an extension that may result in the band being increased was sold and you therefore have the right to appeal against the valuation. In other words, when you buy a home make sure that you check the Council Tax banding soon after moving in and if you feel it is unfair appeal against the revaluation.

I live in Scotland – what do I do?

As mentioned at the top of this article, the rules are different for homes in Scotland and you should check the Scottish Assessors site for more information.

The information in this article has been gathered from the Valuation Office Agency and other sources and is believed to be correct, if you have any doubt please contact your local council of the Valuation Office Agency to confirm the procedure and rules.