Martin Lewis says thousands could be owed tax rebate going back decades
The money-saving expert says hundreds of thousands of people are potentially owed money
Martin Lewis says hundreds of thousands of households in England and Scotland might be entitled to a back payment stretching back over three decades. The money-saving guru highlighted the issue with council tax bandings, which determine how much residents are charged.
Council tax funds a variety of local services throughout England, Scotland, and Wales, such as waste collection, road maintenance, and street lighting, while Northern Ireland operates on a different rates system. The amount each household pays is influenced by three main factors: the valuation band of the property, the council's charge for that band, and any applicable exemptions.
The current framework was established in 1993 under the Local Government Finance Act 1992, taking over from the unpopular Community Charge, commonly referred to as the poll tax.
However, Mr Lewis has pointed out that this system is now severely outdated. Sharing his thoughts on Instagram, he said: "It really is quite unbelievable that if you live in England and Scotland, the council tax band you are in today is still dictated by a stop-gap, drive-by valuation done back in 1991 that was only meant to last a couple of years.
"And when I say drive-by, I literally mean a couple of estate agents in a car often, with a clipboard in second gear going 'Band C, Band D, Band E..." reports Lancs Live.
"That is still in place today, so it is no surprise that up to 400,000 homes are in the wrong band. And if you're in the wrong band and you challenge it, not only can you get it lowered, but you can get a backdated payout to when you moved or 1993 - whichever was sooner.
"However, don't just do it speculatively because if you get it wrong, they could put your band up - or even your neighbour's band up. You need to follow my full step-by-step check and challenge process that I go through in detail in the podcast."
How to check
Mr Lewis detailed two straightforward checks to confirm whether you are paying the correct Council Tax band or not. The first test is a comparison with your neighbour's property. If their home is identical to yours but in a different band, chances are one of you might be incorrectly banded.
Asking your neighbour is not necessary; instead, a quick visit to GOV.UK will unveil the banding details you require. Discrepancies between bands could indicate a problem.
The second approach is a valuation check, which requires establishing the value of your property in 1991. This can be done easily enough online. Accessible on GOV.UK, the valuation Council Tax band ranges further help in assessing whether your banding is accurate or amiss.
A thorough guide on how to contest your Council Tax band, including details on potential discounts and reductions, is available on MSE.com here. Mr Lewis emphasised the necessity of adhering to these steps prior to lodging an appeal, as a change in band could potentially result in higher, rather than lower, council tax for you.
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