Martin Lewis urges 400,000 households to check if they’re owed tax refund – is this you? | Personal Finance | Finance

Martin Lewis has urged households to check if they could be owed a council tax refund as an estimated 400,000 may have overpaid due to properties being banded wrongly.

The Money Saving Expert founder hosted a council tax special on his ITV Money Show on Tuesday evening, where he announced the shocking statistic.

He explained the reason being that, in an attempt to set up council tax “quickly” in 1991 to replace the poll tax, the Government devised a “stop-gap valuation” to decide what the council tax bands would be.

Mr Lewis then played a clip from his 2007 Money Show, when he interviewed an estate agent who carried out one of the stop-gap valuations.

The estate agent said: “We were given a list of around 300 to 400 properties at the start of the week. We were given a list on Monday morning. We had to produce the valuations by Friday afternoon and, because of the pressures of other work, because this was something that we were doing as an additional contract, we’d probably do all of those valuations in one day. We were in the car carrying out all the valuations at all times.”

This indicates that there was no guarantee that banding was accurate, meaning many households may have been placed in the wrong, higher band and subsequently, could be paying more tax than necessary.

Mr Lewis told viewers: “Staggering, isn’t it? That was a stop-gap valuation – It was only meant to last a few years. When I did that programme in 2007, it was already outrageous that it was 16 years old. In England and Scotland, it has still not been redone.”

He emphasised: “33 years since a stopgap temporary valuation. That is why 400,000 homes, it’s thought, are in the wrong band. Many are in too high a band.”

In Wales, Mr Lewis noted: “They did a full revaluation in 2003. And while you may still be in the wrong band, it’s less likely you will be in the wrong band now.”

For those who think they may be entitled to a refund, Mr Lewis shared the following few checks people can make.

The neighbours check

Mr Lewis said: “The first check you do is the neighbours check. Is your band higher than neighbours in identical, preferably, if not similar, homes?

“You don’t need to ask them because it could be a bit embarrassing. You can simply go on to check your band at GOV.UK for England and Wales and Scottish Assessors Association website in Scotland.

“If it looks like you’re in a higher band than many of your neighbours in similar homes… then this is your safety check.”

The valuation check

Secondly, Mr Lewis urged people to find out what their properties were worth in 1991. He explained: “It is still those 1991 prices that dictate what band you are in. So if you bought your house after 1991, it’s quite easy. You just find the price and the sale date. If it was earlier than that, then you go onto those property sales websites like Zoopla and Rightmove and try and find a similar property that’s been sold since that point.

“And then you want to back-calculate its value in 1991 prices and there are free check and challenge calculators online that will convert this for you. Once you find what your property was worth in 1991, then go to the English or Scottish bands.”

In England, the council tax bands based on the value of a property on April 1, 1991, include:

• Band A – property value up to £40,000
• Band B – property value over £40,000 and up to £52,000
• Band C – property value over £52,000 and up to £68,000
• Band D – property value over £68,000 and up to £88,000
• Band E – property value over £88,000 and up to £120,000
• Band F – property value over £120,000 and up to £160,000
• Band G – property value over £160,000 and up to £320,000
• Band H – property value over £320,000.

In Scotland, the council tax bands are:

• Band A – property value up to £27,000
• Band B – property value over £27,000 and up to £35,000
• Band C – property value over £35,000 and up to £45,000
• Band D – property value over £45,000 and up to £58,000
• Band E – property value over £58,000 and up to £80,000
• Band F – property value over £80,000 and up to £106,000
• Band G – property value over £106,000 and up to £212,000
• Band H – property value over £212,000.

However, Mr Lewis warned: “The most important point that I’m going to say, though, is I would only look at challenging my banding if I passed, clearly, both tests. The reason for that is simple.

“You can’t ask for your band to be lowered – you can only ask for your band to be looked at. That means if you only pass the neighbour’s check, it could mean it’s not you who’s in the too-high band, it’s all your neighbours who are in the too-low bands. When you ask for this, their band goes up, which will not make you very popular.

“That’s why I put in this second check – that’s your safety check. Personally, I would not touch it otherwise.”

People can then submit a formal or informal request to challenge their council tax banding.

The Martin Lewis Money Show airs on ITV on Tuesdays at 8pm.