Council Tax warning as simple data error means thousands are overpaying bills – you could be due a refund

Chris Roberts, Managing Director of Capital Allowance Review Service, explains: “Hundreds of thousands of homes are in the wrong band simply because their valuation hasn’t kept pace with the property’s actual characteristics or local market changes. Further, most homeowners don’t even realise they have the right to challenge.”

With living costs still squeezing budgets, checking a home’s Council Tax band can be an overlooked way to make real savings.

Around 400,000 households in the UK are estimated to be in the wrong council tax band, potentially paying too much due to outdated 1991 property valuations.

Research indicates about one in four people who challenge their band are successful. The Valuation Office Agency (VOA) reported over 10,000 successful challenges in a recent year.

Council Tax classifications are based on property values set at fixed points in the past, 1 April 1991 in England and 1 April 2003 in Wales, with Scotland operating a similar system.

Homes are placed into bands from A to H, or up to I in Wales, meaning today’s bills often rely on assessments made decades ago.

Over the years properties can change dramatically, whether through new owners, renovations or shifts in the surrounding area, and those old valuations do not always keep up.

“Properties are often misclassified because of changes to the property itself, nearby developments, or errors made when the band was first set,” Mr Roberts notes.

Errors can creep in for all sorts of reasons, from old paperwork being wrong to extensions not being logged or simple administrative slip-ups. New-build estates and converted properties are often the most likely to end up in the wrong category.

There are a few practical ways households can sense-check where they sit. Looking at up to five similar homes on the same street or in the immediate area can be useful, especially those with a comparable size, style and age.

Historic sale prices can also help build a picture. If a property, or one like it nearby, sold for less than the threshold for its band around the valuation date, that may support a challenge.

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Changes to the local environment matter too. New roads or large retail developments can influence values, just as a decline in the area might.

The Valuation Office Agency provides official guidance and online tools to help people check. Roberts said: “Most online house price indices are useful for context, but the VOA prefers official sale data from the relevant period. Gather as much specific evidence as possible, including addresses, sale prices, dates, and descriptions of any changes.”

For some, the payoff can be substantial. One couple managed to move from band E to D after acting on advice from Martin Lewis, cutting their bill and securing £7,500 back.

Government statistics reveal that more than one in four challenges submitted between 2023 and 2024 proved successful, demonstrating how widespread overvaluations remain.

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Online forums contain numerous accounts of homeowners achieving results through determination. One Reddit user, skybluepink77, reported: “It took a lot of persistence and phone calls but it saved me a fortune. You have to be willing to persist and persist, and have good evidence.”

Another user, Peanut_-_Power, described having their challenge rejected twice before the authorities conceded just before tribunal proceedings.

“Thousands of pounds are on the table if you spot an error,” Mr Roberts says.

Navigating the appeals process requires organisation and patience. Those who have paid Council Tax for under six months or experienced a recent band change submit a formal ‘proposal’, while others request a ‘band review’.

Building a robust case means compiling property descriptions, sale prices, photographs, floor plans, and documentation of local changes affecting values.

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English and Welsh residents submit challenges through the Valuation Office Agency, whilst Scottish homeowners contact their local assessor.

The VOA typically acknowledges submissions within days, though legal challenges may take six months to resolve and band reviews up to twelve months.

Unsuccessful applicants in England have three months to appeal to the independent Valuation Tribunal.

Mr Roberts warns against relying on current online valuations, submitting incomplete evidence, halting Council Tax payments during appeals, or comparing with properties outside the immediate locality.