Martin Lewis council tax warning as thousands could pay more

People are encouraged to check their tax bills, as many families may be entitled to a large refund. The warning comes as council tax rates across the country are expected to rise on April 1, with most local authorities increasing rates by 5%.

Savings expert Martin Lewis previously highlighted on his website Savings Expert (MSE) that hundreds of thousands of homes across England and Scotland could have been wrongly classified in the council tax system. He warned that these mistakes could have gone undetected for years, with refunds of thousands of pounds becoming “commonplace”.

Council tax is a charge levied by local authorities to support essential public services such as bin collections, road maintenance and libraries. Part of the money also contributes to the local police and fire brigades, which means that what you pay depends on your location and the type of property, and the houses are divided into different groups.

However, this is where the problems arise. In guidance from MSE, Martin explained how property across England and Scotland can be divided incorrectly, leading to incorrect council tax bills. He said: “Hundreds of thousands of homes across England and Scotland are thought to be in the wrong tax bracket.

This means it’s important to check your property is in the right category – something our tried and tested system can help you do. Some landlords and tenants have been paying Council Tax unknowingly for years, even decades, because their rates are so high, so payments of £1,000 are common.”

He revealed that “many” houses have been caught in the wrong tax categories since 1991. When the new tax system was introduced that year, limited sources said that many houses were considered “just a glance”, the inspectors were just passing by.

Homeowners in Wales were even more fortunate, as the Government carried out a comprehensive audit of all properties, to ensure that current residents are paying the correct amount. But, England and Scotland did not benefit from the same treatment.

“So, the old negative value still dominates most of the teams in England and Scotland, which is why you can pay more than your neighbor even if you live in the same area,” Martin noted.

There are several ways to find out if you are being overcharged in council tax. You can:

• Compare your group and neighbors for the same or similar property – either by asking them directly or checking the GOV.UK website
• Calculate the value of your property in 1991 – the easiest way is to use websites such as Nethouseprices, Zoopla and Rightmove. What to do if you believe you are in the wrong group

If you live in England or Wales and believe your property has been allocated to the wrong group, Martin suggested challenging it. Initially, you will need to decide whether you can do this “formally” or “informally”.

To file a legal challenge, you must have lived in the property for more than six months (whether you are a landlord or a tenant does not matter, although tenants should politely inform the landlord). The Savings Expert website explained: “If you are able to legally challenge (also known as a ‘proposition’), the Valuation Office (VOA) must assess your unit. Although you do not have to provide legal evidence about the property at hand, we would strongly suggest that you do not violate that section.”

If you have lived there for more than six months, the VOA has a legal obligation to maintain the accuracy of the Council Tax registration. MSE explained: “This means that you can still submit a request for an ‘informal review’ of your Council Tax class (use our wording template can help), although the burden is on you to provide strong evidence that your class is wrong, to persuade the VOA to conduct a review (the next steps show what evidence needs to be prepared).

In Scotland, council tax bodies are regulated by the Scottish Assessors’ Association (SAA). Simply enter your postcode in the Council Tax search box on the SAA website.

MSE explained: “In Scotland, the Scottish Assessors Association (SAA) deals with Council Tax class challenges, known as ‘propositions’. As we said above, in Scotland there is no informal way to challenge your class if you cannot challenge formally. That means you must always go through the legal process of challenging, known as making a proposal.

More information can be found on the Savings Expert website here.