How Exceptional Council Tax Rises Make Checking Your Band Vital

Several councils in England have been permitted to impose exceptionally high council tax rises, well above the national cap. If you live in one of these areas, it is more important than ever to check that your council tax band is correct to ensure you are not overpaying on a significantly larger bill.

Which councils are raising tax by more than the cap?

For 2024-25, the government capped council tax rises at 4.99% for most authorities in England. However, due to severe financial distress, some councils were given special permission to increase bills by much more. This applies to councils that have effectively declared bankruptcy by issuing a Section 114 notice.

According to a House of Commons Library report, the councils granted these exceptional rises include:

• Birmingham City Council: 9.99%
• Slough Borough Council: 9.99%
• Thurrock Council: 7.99%
• Woking Borough Council: 9.99%

These increases are a direct result of financial difficulties within the local authorities. For residents, this means a substantial and unavoidable increase in their annual bills, making it crucial that the underlying valuation of their property is fair and accurate.

How does a larger percentage rise affect my bill?

A higher percentage rise magnifies the financial impact of being in the wrong council tax band. If your bill is already inflated because your property is incorrectly banded, an exceptional rise makes the overpayment even larger in cash terms.

Consider a property incorrectly placed in Band D instead of Band C. The difference in the bill might have been £200 per year. After a 10% rise, that difference grows to £220 per year, and the total bill increase is much higher than it should be.

Conversely, securing a band reduction in a high-rise area provides greater savings. A successful challenge not only lowers your future annual payments but also results in a backdated refund, which will be larger because of the higher rates you have been paying.

Why might my council tax band be wrong?

The council tax system in England and Wales is based on property valuations carried out in 1991. These valuations were often conducted quickly and without thorough internal inspections, leading to widespread inaccuracies from the start. This is sometimes referred to as a 'second-gear valuation', where assessors drove past properties to assign bands.

Common reasons for an incorrect band include:

• Initial Valuation Errors: Your property was simply put in the wrong band in 1991 due to a rushed assessment.
• Neighbour Discrepancies: Your home is in a higher band than identical or very similar neighbouring properties.
• Property Changes: Previous extensions or improvements were valued incorrectly, or a property was split into flats without the band being reassessed.

These historical errors persist today. The Valuation Office Agency (VOA), which maintains the council tax list, will not automatically correct them. It is the homeowner's responsibility to identify a potential error and submit a challenge.

How do I check if my band is correct?

You can perform an initial check for free. The VOA will only consider a challenge if you can provide strong evidence that your band is wrong. The key is to demonstrate that your property's value in 1991 was incorrect relative to others.

First, check the council tax band of your property and your neighbours on the GOV.UK website. Make a note of the bands of properties that are identical or very similar to your own in size, style, and age. If they are in a lower band, you may have grounds for a challenge.

Second, you need to estimate your property's value as of 1 April 1991. You can do this by looking at actual sales prices of your property or similar properties around that time. While challenging, this evidence is crucial for the VOA to review your case.

What is the process for challenging my council tax band?

If your research suggests your band is wrong, you can submit a 'challenge' to the Valuation Office Agency. You cannot challenge the amount of your council tax bill or the percentage rise set by your council, only the valuation band itself.

Your challenge must be supported by evidence. This typically includes the addresses of up to five similar properties in a lower band and evidence of property values from 1991 if you have it. The VOA will review your submission and inform you of their decision.

If the VOA agrees your band is too high, they will contact your council to amend your bill and arrange a refund. If they reject your challenge, you have the right to appeal their decision to the independent Valuation Tribunal for England or Wales. While you can manage this process yourself, it can be complex, and using a specialist service can increase your chances of success.