Finance guru Martin Lewis has issued a crucial alert to households across England and Scotland, warning that hundreds of thousands may be paying excessive council tax due to incorrect property banding, with potential rebates running into thousands of pounds.
The Flawed System Costing Households
The consumer champion, founder of Money Saving Expert (MSE), highlighted that the root of the problem lies in the original valuation process conducted in 1991. A new council tax system was hastily introduced that year, with assessors often allocating bands based on mere drive-by inspections rather than detailed property evaluations.
This means the amount you pay for local services like bin collections, libraries, and road repairs could have been wrong for over three decades. Lewis stated that while the Welsh Government took the step to reassess all properties, this corrective action was not mirrored in England and Scotland, leaving a "broken" system in place.
"Hundreds of thousands of homes across England and Scotland are thought to be in the wrong council tax band," Lewis explained. He emphasised that it is "commonplace" for successful challengers to receive payouts worth thousands, as some have been overpaying for years or even decades.
How to Check If You're Overpaying
There are two primary methods Lewis recommends to determine if your home is in the correct band. First, you should compare your band with those of similar or identical properties on your street. You can do this discreetly by using the official GOV.UK website or by politely asking neighbours.
Secondly, you can estimate what your property would have been worth in 1991, the valuation date that still dictates today's bands. Property websites like Zoopla, Rightmove, and Nethouseprices can provide historical sale price data to help with this estimation.
If your research suggests your band is higher than comparable homes, you may have a strong case for a challenge.
Formal vs. Informal Challenges: The Process
The procedure for disputing your council tax band differs depending on how long you have lived at the property and whether you are in England, Wales, or Scotland.
For residents in England and Wales who have lived at the address for six months or less, you can make a formal challenge (known as a 'proposal') to the Valuation Office Agency (VOA). The VOA is then obligated to review your band, though providing evidence on similar properties is strongly advised.
If you have lived there longer, you can request an 'informal review'. The burden of proof, however, falls on you to provide compelling evidence that your band is incorrect to persuade the VOA to act.
The system in Scotland is handled by the Scottish Assessors' Association (SAA). Residents should use the SAA website's postcode search and, if a discrepancy is found, proceed directly with a formal 'proposal', as there is no informal route available.
Lewis and the MSE team stress the importance of gathering solid evidence before contacting the authorities. They provide template letters and detailed guides on their website to assist people through the process, which has already secured significant refunds for many.
