On the money: Do you pay too much council tax?

Do you pay too much council tax? A straw poll on social media suggested that a number of people think they get value for money.

But according to the Institute for Public Policy Research think-tank, London’s poorest living in a property in the lowest band, A, are paying nearly five times as much as a proportion of their property value than someone living in the highest-rated H band.

Poorer folk have also been hit by cuts to council tax support meaning a huge rise in the number of people falling into arrears and facing prosecution. “The council tax system should be devolved to London, so the capital can decide its own future,” said Luke Murphy of the IPPR.

One of the problems is that the tax relies on out-of-date property values with the bands based on 1991 property prices. The think-tank has called for updated and regular reappraisal of property values, and for the restoration of council tax support which could be paid for by doubling the charge on empty London homes.

But vulnerable Londoners may be able to claim more help with meeting the cost of council tax, according to a report published last week by the Government.

The support varies according to council but if you’re on benefits you may be eligible for help. You’ll need to contact your own council to find out. Local councils also hand out hardship relief to residents struggling to pay their council tax.

On top of that there are a range of exemptions Londoners may qualify for. For instance, households where everyone is a full-time student do not have to pay the tax at all, and neither do people whose home is empty because they are in care or hospital.

If you live on your own you qualify for a 25% discount or you could get a reduction if part of your home is used by a disabled occupant.

So-called “granny annexes” are also exempt from the tax if an elderly relation is living in them.

But you may also be able to cut your council tax by challenging the bill. Last year almost a third of those who asked for their band to be checked saw their bills fall. That’s because, when valuations were made in 1991, they were done in a hurry. Sarah Coles, personal finance analyst at Hargreaves Lansdown explains: “Mistakes were made, so a challenge could be worthwhile.”

Check with neighbours that you’re paying the same as them and if you’re paying more, contact the Valuation Office Agency for a review. If you’re successful you won’t just face lower bills, you could also get a refund of thousands of pounds dating back to 1993.