How to get cashback on your council tax

Paying council tax is an expensive but necessary monthly outgoing. However, money saving expert Martin Lewis has uncovered that some households are being overcharged. If your property has been placed in the wrong council tax band, you could be owed thousands of pounds in overpayments.

By reviewing your current council tax bill, you can check if the council tax system is working correctly for you. If you find out that you're being overcharged, redress the balance by getting your home re-banded and your money back. With recent indications suggesting that council tax will rise by 3.5% in April, there's never been a better time to investigate.

1.       Check your current council tax band

The amount of council tax you pay depends on the taxation band your property was placed in back in 1991. Every house was placed in a band according to how much it was valued at. Crucially, there haven't been any revisions (apart from in Wales) since 1993 and inaccuracies arose at the time the valuations were completed.

If you don't know which council tax band you're in, have a look at a recent bill or check with the Valuation Office Agency for England and Wales or the Scottish Assessors for Scotland.

2.       See what you're paying

Check how much your current council tax bill is. Because your local council annually determines your council tax rates, the amount you are charged will differ from area to area, and from year to year.

It's also useful to compare how much you pay with local and national averages for your property band. This will give you a feel for what other households are being charged.

3.      Be a nosey neighbour

Now here's the clever bit. By finding out what your neighbours pay, you can get a sneaky glimpse into whether you're being charged too much (or indeed not enough) council tax. To do this, ask them yourself or repeat steps one and two above using their address rather than yours.

If your band doesn’t match up with similar sized properties in your street, it could be that your home has been wrongly banded.

4.       Check recent house prices

If you think your banding may be incorrect, you need to work your way backwards to see what your property would have been worth in 1991, when the bandings were set. To do this, you first need an idea of how much your property is worth now.

You can gauge this by looking at house sales in your road, the more recent the better. Note down when and for how much properties of similar size to yours have sold for. If there have been no recent sales near you, examine historical property prices to give you a general indication of local property trends.

Alternatively a property valuation report from market analysts Hometrack will value your property at its current market price and give you a more accurate figure to work from.

5.       Calculate your 1991 property value

Using the figure you calculated in step four, you can uncover the approximate 1991 value of your house. The Nationwide's house price index calculator will give you an average figure based on what regional area you live in.

Now, match your 1991 house value to its correct band using the table to the right. If this band and your current one do not match, you've probably been paying the wrong amount.

6.       Challenge your council tax band

If you think there's a strong case your property has been wrongly banded, there is a way to appeal for your band to be reassessed. It's vital that you do your research properly prior to this, as if it comes to light that your house should be in a higher band, you'd be liable to pay more, not less council tax.

Appeals should be made to your local listing officer at the Valuation Office Agency for England and Wales and your local assessor in Scotland. You can do this online or through contacting your regional office. They will investigate and amend your band if they agree with your case, and you could be entitled to back dated repayments.