Financial guru Martin Lewis has highlighted a little-known money-saving tactic that could put thousands of pounds back into household budgets, after a viewer successfully reclaimed nearly £6,000 in overpaid council tax.
The Two-Step Check That Could Save You Thousands
Appearing on his ITV programme, The Martin Lewis Money Show Live, the founder of MoneySavingExpert.com outlined a clear process for homeowners in England and Scotland to verify if they are in the correct council tax band. An estimated 400,000 properties across England and Scotland are believed to be banded incorrectly, meaning countless residents could be entitled to a lower bill and a substantial backdated payout.
However, Martin issued a crucial warning: challenging your band is not risk-free. If your research reveals that your neighbours are actually in too low a band, your challenge could inadvertently lead to their bills increasing. "You could end up putting up council tax for your entire street," he cautioned.
Step One: The Neighbour Comparison Check
The first step involves comparing your property's council tax band with those of similar homes on your street. You do not need to speak to your neighbours directly. "In England and Wales you can go to GOV.UK, in Scotland you go to SAA.GOV.UK," Martin advised.
If your home is in a higher band than identical properties, it is a strong indicator you may be overpaying. Conversely, it might suggest your neighbours are underpaying, which is why the second check is vital.
Step Two: The 1991 Valuation Check
Council tax bands are based on what a property would have been worth back in April 1991. To see if your band aligns with this historical value, you can use free online tools. MoneySavingExpert.com provides a dedicated calculator and a valuation table to help with this.
"Only consider challenging if you pass both of the checks," Martin stressed. "Because otherwise, you could ask, they could put your neighbour’s band up, and they won’t like you very much."
How to Submit a Formal Challenge
If both checks suggest you have a case, you can proceed with a formal challenge. Homeowners in England and Wales must contact the Valuation Office Agency (VOA). Those in Scotland need to get in touch with the Scottish Assessors Association (SAA).
The potential reward is significant. One viewer, Ian, shared his success story on the show. He explained: “After watching your programme, I decided to question my council tax banding and ask to be reassessed. After living in my current house and paying band D since 1994, they finally changed it to band C and I received just short of £6,000. What a result.”
This case underscores the importance of checking your banding, especially if you have lived in your home for many years. A successful challenge can lead to a permanent reduction in your annual bill and a life-changing lump-sum refund for past overpayments.
