Matthew Wall, Tuesday February 05, 2008

England's council tax burden has soared over the past decade and April will bring yet another above-inflation increase - but you could claim a refund on your previous bills. We reveal all

Council tax is rapidly becoming the most hated of all UK taxes, rising inexorably year after year. Bills have climbed by more than three times the rate of inflation over the last decade and have doubled in some regions - and this year our tax burden will continue to rise.

Figures from the Local Government Association (LGA) show that many local councils in England are planning inflation-busting increases of around 4% from April. Some may even up their bills by as much as 5% - an increase that would see people living in a typical Band D property having to pay nearly £1,400 over the coming tax year.

These proposed tax hikes will only add to the mounting pressure on household budgets, following recent energy price increases of up to 15%. Faced with increasingly expensive consumer debt, falling house prices and a general slowdown in the economy, householders are seeing their disposable income disappear.

No wonder some taxpayers are rebelling. In the past, some pensioners have risked jail by refusing to pay their council tax bills in protest. Now, other disgruntled taxpayers are successfully contesting the accuracy of their original property bandings and reclaiming years of overpaid tax.

Why you can reclaim
The council tax bands, from A to H, were based on house price estimates taken in 1991 - but many of these valuations were 'drive-by' assessments undertaken by over-worked surveyors. Mistakes were made - and if your property was overvalued, you could be paying more tax than you need to.

How can you contest your bill? First check your banding at the Valuation Office Agency website, then see if your neighbours who live in similar houses are in the same band. If yours is higher, you might have grounds for a challenge. You can find out the table of bands on the DirectGov website.

But what was your house worth in 1991? Use NetHousePrices to find the sale value of similar properties in your street as far back as 2000. Then enter this figure into the Nationwide's house price calculator and ask it to calculate back to 1991. Compare this final figure with the bandings to see if your property has been mis-valued.

If you think you have a legitimate claim, contact your local valuation office. Overpaid tax can be backdated to 1993, potentially saving you over £1,000.

One word of warning: any potential re-evaluation could see you put in a higher band - resulting in higher council tax bills.

Other ways to cut your bill
There are other ways to reduce your Council Tax bill. Households where there is only one adult resident are eligible for a 25% discount. Similarly, students living together don't have to pay council tax. And if you own a self-contained 'granny flat' annexed to your main property where a dependent relative lives you don't have to pay council tax on this either.

There are also legitimate discounts and rebates for specific groups of people. For example, if there is someone permanently disabled living in a property, the local authority should treat the property as if it were in a lower banding and reduce the bill accordingly.

People on low incomes are entitled to Council Tax benefit. For example, if you claim Income Support, income-based Jobseeker's Allowance or the guarantee credit of Pension Credit, you shouldn't have to pay council tax at all. Even if you don't receive any benefits, you may still be eligible for council tax benefit if your income and capital is low.

In some cases you may be better off claiming Second Adult Rebate rather than council tax benefit. If you live with an adult other than your partner and this person doesn't pay rent, is not responsible for paying council tax, and is on low income, you can apply for this rebate.

But the rules governing all these benefits and rebates are complex - so seek help from your local Citizen's Advice office.