Council Tax Rip Off

According to the Times hundreds of thousands of homeowners could be paying over the odds for their council tax simply because the previous owner had an extension.

The council-tax system automatically upgrades homes once they have been extended, even if the extra space does not warrant them going up a band. This means that some homeowners may be paying hundreds of pounds a year more in council tax than they need to.

Consumer groups are urging people to check their banding, especially if they moved into a home with an extension, and claim back overpayments which could amount to £4,000 over the past 15 years – when the current system came into effect.

The typical three-bedroom house, classified as band D, pays around £1,214 in council tax year. Band E houses are charged £1,483 – £269 a year more.

A Communities and Local Government spokesman said: “Where overpayments of council tax have been made, it is of course right that taxpayers should be entitled to a full refund from their local council. Anyone who has evidence that they are in the wrong band can contact the VOA to request a review.”

Bills are set to jump by an average of 3.9% in April, with the average band D bill increasing by £47 to £1,261. The latest rise means that council-tax bills have doubled since Labour came to power. In 1997, the average Band D tax was £689.

While it is possible to claim back interest on income tax overpayments, no such rule exists for council tax.

The Local Government Ombudsman service said it received complaints about councils failing to pay interest but was unable to help. “The law, as it currently stands, means councils do not have to pay the interest,” it said.

If you think you are paying too much, check your banding against your neighbours’. Go to voa.gov.uk for England and Wales, or saa.gov.uk in Scotland.

- Find out the value of your property in 1991. Follow the instructions on moneysavingexpert.com/council.