Business & Finance Taxes

Key Steps to Follow Before Seeking Council Tax Refund

Council Tax was introduced in the year 1993 by Local Government Finance Act 1992. Council Tax evolved as the replacement to Community Charge, which was introduced in 1989 and later abolished in 1991. This new system of taxation required every house to be placed in a valuation band. The properties were thus divided into eight tax bands (from A to H), with Band A listing properties with lowest value and band H listing the properties with highest value. However, limited time posed a problem for the government to complete such a daunting task in time and the local estate agents were brought fore for lending a helping hand. The end result was a complete mishmash of the structure. Since the estate agents did not have enough time to gather detailed information, they banded properties with mere glance of sight. This eventuated in houses falling under different bands, despite of having similar property value. This flawed valuation still dictates many properties in United Kingdom, and dwellers pay more tax than their neighbours although their property value is same. Valuation Office Agency (VOA) reports, since 1993, as many as 903,000 houses in England had appealed for council tax rebanding and got their tax reduced.

If you think that you are in the incorrect tax band and have been paying astronomical amount, then there are certain steps you ought to follow before challenging your band with Valuation Office Agency and asking for council tax rebanding. Herein, we discuss some of those necessary steps.

The Neighbour's Check €" The most important step before challenging the property tax banding is to conduct a neighbour's check. Find out whether your neighbours are placed in the lower band than yours against similar or identical properties. If you find your neighbour's properties similar to yours, yet fall in a lower band, you can make an appeal and claim for council tax refund on the overpayments. You can check your tax band via DirectGov site or contact the Valuation Office Agency (VOA) as VOA is responsible for ensuring that your property is in the right band.

Council Tax Valuation Check - In this step, you need to find out the estimate of your house as in the year 1991 when council tax band was defined. Nationwide House Price Calculator will help you in assessing the price of your house as in 1991 along with other comparable properties. After obtaining the property price as in 1991, compare the value with the table on which the tax bands were assessed. If the valuation check sees you placed in the higher bands, you can appeal for council tax rebanding.

However, never forget the safety check. It might be the case that you are placed in the higher band rightly and your neighbours are placed in the lower band because of faulty banding. In such case, your appeal for rebanding will see their band increased, which will not make you popular in any way.

Band Re-assessment- Prior to asking for tax band re-assessment, you need to conduct the neighbour's check and evaluate your banding in very careful way. Re-assessment can not only make your tax band go down but it can see your band move up as well. Thus, be sure not to have added any kind of extension to your property which increases your property value.

Challenging Banding and Seeking Council Tax refund- If you are sure that your property banding is incorrect, you can appeal for rebanding and council tax refund on the overpayment you have made. You can contact your local listing officer and ask for a proposal form. You can also visit the Valuation Office Agency websites to quote reasons for making a rebanding claim. If you do not find the appropriate reason listed in the VOA site, you will have to explain the reason why deem your property banding to be wrong. The VOA will carry out a review of your property and provide you the feedback within two months. VOA itself claims that since 1993, out of the 21 Million homes in England, 903,000 had their tax band reduced.

However, dealing with the governmental agencies can be a daunting task for the property owners and keeping this aspect in mind, a number of domestic property tax review firm have ushered in to help the parties who wish to re-assess their tax banding and find out whether they are in the wrong tax band. These independent tax review companies conduct free valuation of the property and submit the re-banding claims along with the evidences and reports to the council. Furthermore, these companies also help clients obtain council tax refund, for the excessive payments they have made.
If you think that you are paying excessive council tax because of being placed in the wrong band and wish to get council tax refund, you can seek assistance of these autonomous bodies.

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