Council Tax: how to slash your bill


Updated on 03 October 2017

A new investigation has found that tens of thousands of vulnerable people are missing on a vital Council Tax discount. Find out if it affects you.

Discounts for severely mentally impaired people

People who are severely mentally impaired don't have to pay Council Tax, thanks to a Government discount.

Two person households in which one member suffers from an impairment will also get a 25% discount.

Unfortunately, 10s of thousands of people are missing out.

Government ministers said that all local councils should ensure that those who are eligible should get the money but councils have been accused of being slow to offer any information on the scheme.

A Freedom of Information request by MoneySavingExpert.com found huge variations in people claiming the discount across the country, meaning that vulnerable people are missing out on thousands of pounds in savings.

To claim the discount, the person must have been certified as having a severe mental health impairment by a doctor and be eligible for (but not necessarily receiving, at least one benefit including attendance allowance, personal independence or disability living allowance.

A person who is severely mentally impaired will have a severe impairment of intelligence and social functioning which appears to be permanent, such as dementia. 

If you're not eligible, there are other ways to cut your Council Tax bill, which we have set out below.

Check your Council Tax band

The Council Tax system was established in 1993 when every property was placed into 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.

Get up to 3% cashback on your Council Tax bill

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.

Appeal, appeal, appeal

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. (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. 

The Valuation Office Agency has revealed that it received 51,840 challenges against Council Tax valuations in England and Wales between 1 April 2015 and 31 March 2016.

Of this number 21% or 10,930 households successfully reduced their Council Tax bill. However, 30 unlucky households were put into a higher Council Tax band after making the challenge.

Meanwhile 63% or 32,420 households didn’t see a change.

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.

Earn up to 3% cashback on your Council Tax bill

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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