Tag: Retire Early

Council Tax Reduction

In the UK we have a Council Tax. This is used to pay for local services and other manintenance, including things like law enforcement, cleaning of public spaces, disposal of waste and so on.

Each residence, with some exemptions, in England and Scotland is placed into one of eight bands (A through H – Wales has nine bands) which determines the rate you pay per year. It’s generally an effective way of measuring wealth and taxing on it, though it does have its problems.

One issue we encountered here was that we believed we were in a band that was higher than it should be. One odd component of the Council Tax is that the band you are placed in is determined by the value of your property in 1991. There are several issues with this, the most obvious being the fact that a significant number of properties were not even built in 1991 (or 1993 when the Council Tax came in) so calculating these can be tricky, though there are established ways of doing so.

Our house was built before 1991, however there were no sales of the property in or around that time, which makes determining the band quite difficult. At some point, likely 1993, the local council placed our property in a similar band as properties near us. Unfortunately, those properties are worth much more than our own. Some are larger, and some are similarly sized (though many have been extended) however they all have more land than ours.

We decided to try our luck after reading through the relevant MoneySavingExpert page and what do you know, we’ve had our band lowered, saving us over £300 a year!

Initially they were hesitant. They advised us that the band wouldn’t change unless we could point at a very similar property in the same area with a lower band, or provide a quoted price for the property that was generated in 1991 (which is impossible for most people to do!)

Though there are similarly sized properties nearby, there are none that are configured in the same way as our own (single storey bungalow) however there are some similar properties a bit further afield that are clearly in a lower band.

Luckily for us, this was good enough after appealing and resulted in us being placed in a lower band.

As someone who wants to achieve FIRE, lowering monthly outgoing is a critical step towards bringing this future even closer. Being able to permenantly reduce one of our larger bills is a great feeling and I would urge everyone to check their band. It doesn’t take long and you may end up saving a large wad of cash every month! Your local council is not going to lower it for you, so it’s worth putting the effort in sooner rather than later.

One bonus to doing this, if for some reason you need to be convinced to save money for the rest of your time at your current home, is that your local council should refund you the extra you have been paying since you moved in (or since 1993 if you have lived there for that long.)

We’ve only been here a year so is likely to only be around £300 or so, but if we had been living here for a few of decades it could be many tens of thousands. For us, it’s a nice little unexpected bonus. Hopefully it’ll arrive soon, we’ve got a lot of expensive renovations to be getting on with and that will certainly help.