Thousands of households could be overpaying for their council tax simply by being in the wrong tax band. If you’re in a higher band than what you should be then you will ultimately be paying more in tax each year. But, with council tax bills going up from April by around 5%, and 10% in some London boroughs, now is the time to check.
The increases follow an announcement by chancellor Jeremy Hunt in his November Budget, which gave councils the power to increase rates by as much as 5% (up from 2%) without a referendum.
Household budgets are already under strain from higher energy costs, double-digit inflation and rising interest rates - so anything you can do to keep costs low can help.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
And although a 5% increase might not seem like much, it adds around a hundred pounds to a band D home.
We explain how council tax bands work and how to check yours.
What are the council tax bands?
Council tax bands range from A to H - the higher your band the more council tax you pay.
They are calculated based on the value of your home, but not the value you would be selling it for today. Instead, the bands are based on how much your property was worth over thirty years ago.
In England and Scotland, it would be how much your property was worth on 1 April 1991. In Wales, it’s 1 April 2003.
The band ranges differ per region, but these are the ones for England:
| Council tax band | UK average home value |
| Band A | Up to £40,000 |
| Band B | Over £40,000 and up to £52,000 |
| Band C | Over £52,000 and up to £68,000 |
| Band D | Over £68,000 and up to £88,000 |
| Band E | Over £88,000 and up to £120,000 |
| Band G | Over £160,000 and up to £320,000 |
| Band H | Over £320,000 |
What council tax band am I in?
To find out which council tax band you’re paying:
- Check your council tax bill
- Ask your local authority
- Use the government website
The government website’s postcode checker allows you to check for properties in England and Wales, while the Scottish Assessors Association lets you check Scottish properties
To check your annual bill, you can go to your local authority website. Find your local authority by typing in your postcode.
How to check you are on the right council tax band
If your council tax differs from your neighbours despite you having a similar property, it’s worth looking into it.
To do so you’d have to work out what your property was worth in 1991, when the bands were set. You can use tools such as Nationwide’s House Price Calculator to figure out what the value of your home was three decades ago.
If you work out the calculations and find the value differs from the band you’re on, you might be able to challenge your council.
What can I do if I’m in the wrong council tax band?
If you think you’re in the wrong band, you should head to the Valuation Office Agency website.
The process is free but lengthy. You won’t pay a fee, no matter what the decision is. But you will be waiting up to 90 working days.
If the Valuation Office Agency finds you were in fact in the wrong band, you can get a refund which will be backdated to when you moved into the property, or when the tax was introduced in 1993 – whichever one is the most recent.
While it’s not very common, it’s worth keeping in mind your local authority could also find you’re paying less than what you should be and hike your bill, so double check your numbers before taking action.
-
IHT receipts hit record high – is it set to rise further?HMRC is set to collect a historic number of IHT receipts between April 2023 and March 2024. We look at how you can stop the taxman eating into your inheritance
-
Adidas, Nike or Jordans - could collectable trainers make you rich?The right pair of trainers can fetch six figures. Here's how you can start collecting vintage Adidas, Nike or Jordans now
-
Act now to bag NatWest-owned Ulster Bank's 5.2% easy access savings accountUlster Bank is offering savers the chance to earn 5.2% on their cash savings, but you need to act fast as easy access rates are falling. We have all the details
-
Moneybox raises market-leading cash ISA to 5%Savings and investing app MoneyBox has boosted the rate on its cash ISA again, hiking it from 4.75% to 5% making it one of top rates. We have all the details.
-
October NS&I Premium Bonds winners - check now to see what you wonNS&I Premium Bonds holders can check now to see if they have won a prize this month. We explain how to check your premium bonds
-
October’s NS&I Premium Bond winners revealed - have you scooped £1 million?Two lucky NS&I Premium Bond winners are now millionaires this October. Find out here you are one of them
-
The best packaged bank accountsAdvice Packaged bank accounts can offer great value with useful additional perks – but get it wrong and you could be out of pocket
-
Bank of Baroda closes doors to UK retail bankingAfter almost 70 years of operating in the UK, one of India’s largest bank is shutting up shop in the UK retail banking market. We explain everything you need to know if you have savings or a current account with Bank of Baroda
-
The best options to earn cashback on spendingFrom credit cards and current accounts to cashback websites, there are plenty of ways to earn cashback on the money you spend.
-
Should you retire abroad?Check the regulations governing pension savings carefully before you decide to retire abroad.
