Six ways to cut your council tax bill

Millions of people are struggling to meet bills at the moment. Our Money Saving Expert Martin Lewis says one of the major pelicans (big bills) people should look at is council tax, as there are many ways to reduce the cost, but people don’t try. So here are his top six ways to slash your council tax bill.

Of course, council tax only applies in England, Scotland and Wales; those in Northern Ireland are on a rates scheme. Below is a summary of what to do, there’s full help in Martin’s cut your council tax – tools, help and detailed info guide.

1. Check if you can get a payment holiday from your council if you’re struggling

Let’s start with tips specific to the time. If you’re struggling to meet your council tax payments due to coronavirus it may be worth asking your council for help. There’s no one-size-fits-all rule here. My team asked 20 councils, 19 said it would offer a deferral, and only one said it wouldn’t. Though the 19 that said they may do, said it’ll be judged on a case-by-case basis and the deferral length varies, so there's no certainty, but definitely worth asking.

2. On universal credit / benefits / low income

Council tax reductions are long-standing discounts of up to 100% off bills for those on benefits (eg income support or universal credit) or with low income. You need to apply directly with your local council (you can find the details on this Gov site) and fill in its application form. If applying for universal credit as well (and get through) do that first, as that should make this easier.

The reduction on your bill is in addition to any benefits or universal credit you receive, and the amount of your reduction depends on your circumstances and the council (eg where you live, your income, if children live with you, if other adults live with you). Some councils may let you back date the reduction, but by how many months varies by council to council so you’ll need to check. But the sooner you do it, the sooner your bill will be reduced.

Plus, on top of the discount, in England, you may also get £150 off your bill backed by a £500m Covid-19 hardship fund. To get this discount, it doesn’t matter if you’ve been effected by coronavirus or not, as long as you’re of working age and have already had your bill reduced due to receiving benefits/on low income then you’ll be eligible. The discount will be applied automatically, you don’t need to apply.

Plus, all those on the main guaranteed element of pension credit are due a reduction, and some on the savings element are too.

3. Check you’re not one of up to 400,000 homes in the wrong band

It’s estimated there’s currently around 400,000 homes in England and Scotland (Wales has more recently been re-assessed) that are on the wrong council tax band and have been overpaying possibly since 1993, so you could be owed money back.

The best way to find out if you’re in too high a band is to use my ‘check and challenge’ system (detailed in the link at the top, including free tools) But simply, first you’ll need to do a neighbours check to see what band your neighbour is in (use the VOA in England, and the SAA in Scotland), and then secondly do a valuation check to see what your house price was in 1991.

If BOTH of these stack up then it’s worth asking for them to check if you’re in the right band. But don’t just have a go, without doing my two tests first, as it could mean your neighbours band goes up.

If it gets lowered payouts are backdated, and I regularly hear success stories, from people saving £1,000s, like Karen who emailed “Queried our band and got a £6,300 refund backdated to 1993 plus our monthly charge is now approx £45 less. Thank you so much." And more recently someone got in touch to say they successfully managed to lower their council tax band and for his 29 neighbours too, saving £10,000s.

4. Do you live with someone with a 'severe mental impairment', eg, Alzheimer's or Parkinson's? You could me missing discount worth £1,000s.

If someone has a diagnosed severe mental impairment, which includes some with Alzheimer's, Parkinson's, strokes and more, then they are disregarded for council tax purposes. Meaning they don't have to pay council tax if they live alone, and get 25% off if they live with one other grown-up. Plus some councils backdate it, leading to paybacks worth £1,000s.

Sadly, this has been wildly underpublicised - but I do hear of many success like Tom who tweeted “@MartinSLewisThank you! After seeing you talk about Council tax exemption for severe mental disorders, after a brief battle I've claimed back £9,649.65 for my dad who suffered a stroke in 1999 and has lived alone since 2005. Thank you so much! This will make a big difference!”

To qualify the person needs to be medically certified as being severely mentally impaired and they need to be eligible for (not necessarily claiming) at least one of ten eligible benefits, including severe disablement allowance, disabled persons tax credit, incapacity benefits and employment and support allowance. Then to make a claim either you or the person suffering a severe mental impairment can contact the council for a claim form, you can find your council contact details via the Government's 'Apply for Council Tax Reduction' site.

5. Living alone or with under-18s / live-in carers

If you live alone you’re entitled to a 25% single person’s discount and if it's been going on a while, you can backdate it. Plus anyone under aged 18 and students are ‘disregarded’ for council tax purposes, so live only with an under-18 an you pay the single persons discounted rate, and all student households pay nothing. Live-in carers are also exempt if they look after someone with a disability who isn't their partner, spouse or child under 18, for an average of at least 35 hours a week.

6. Had your home adapted for a disabled resident

If you’ve had to make modifications to your home to make it suitable for a disabled resident, rather than a discount you may be able to get your council tax band lowered.