Martin Lewis issues council tax warning as £10,500 refunds begin

Martin Lewis has warned over the UK households "very unlikely" to get a council tax refund as £10,500 payments are issued. BBC and ITV star Mr Lewis heard from a Money Saving Expert reader who managed to challenge their council tax band - receiving £10k in the process.

A person messaged Mr Lewis over X having watched the show this week, to ask: "We live in a two bed flat and are in council tax band D, which we think is wrong. We've done the neighbour check, but what if all the flats are in the incorrect band. What would we do in this situation?"

Mr Lewis responded to the person to say they are "very unlikely to be rebanded in that case". On its website, Money Saving Expert has a handy guide for UK households over challenging council tax bands - and this week's MSE email was even dedicated to the issue.

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Mr Lewis wrote: "The English and Scottish Council Tax system is outdated and, in many ways, broken. What you pay depends on which valuation band, from A to H, you're in. Yet the valuation was speedily done in 1991 as a stopgap to urgently set the system up via 2nd gear valuations - ie, people driving past homes.

"It was 2007 when I first set up my 'check & challenge system' and back then it was outrageous that this stopgap hadn't yet been updated. 17 years and many governments later, nowt has changed (Wales did end the stopgap with a full revaluation in 2003 - it can still be wrong, but less likely). This is why an estimated up to 400,000 homes are still thought to be in the wrong band."

The two crucial checks to make are 'The Neighbours' Check' and 'The Valuation Check'. On the former, Mr Lewis said: "This is the start point. Find if you are in a higher band than your neighbours by checking a property that is preferably identical, but if not, as similar a property as you can find.

"If you pass the first check, then you need to calculate whether you should be in a lower band. The problem is bands are still valued on 1991 prices. So it is a two-step process."