An estimated £230million could be due to the British public in council tax refunds, an investigation by MoneySavingExpert.com has found. A 1.7 million council tax accounts are inactive or closed but still hold credit which should’ve been refunded when the account was closed.
Martin Lewis, founder of MoneySavingExpert.com, said: “Councils are sitting on a staggering amount of money, at least £230million spread across 1.7 million accounts, which works out at an average of well over £100 sitting in each closed account.
“And while councils do make efforts to track down those who are owed, many don’t do it well enough, especially when people have moved out of their area and are no longer their responsibility. That means we all need to take responsibility for ourselves.”
He noted that savers are not encouraged to call up their council as it would “waste people’s time”, but suggested taking a few other steps first – including reading the Money Saving Expert guide.
The credit in these accounts compounds as households pay their council tax a month or even a year ahead.
This essentially means that it’s common for people to have leftover credit when they move homes.
For example, if a household is using 10 monthly instalments to pay their council tax, they wouldn’t pay in February and March.
If this household moves out mid-February, they have overpaid a month and a half of council tax.
The report noted that anyone who has moved home since 1993 should check if they are due over £100 due to the overpayments and credit.
Credit will also be added if at any point a person overpaid their council tax bill, if a resident moved out, or someone living in the property died.
The credit should usually be refunded automatically before the account is closed.
The investigation found households are most likely to be due a claim if they’ve moved out of a council or local authority area in the last 29 years.
However, this is only for those that were not paying their council tax by direct debit.
Direct debit refunds are a bit more straightforward and don’t necessarily have as much of a process behind it compared to other payment methods that require direct contact between the council and the household.
People who moved houses within the same local authority area likely would have used up the credit from their old account.
Additionally, households that didn’t leave a forwarding address when they moved are even more likely to be owed a refund.
Money Saving Expert shared a variety of ways households can check if they are owed a refund and how to claim it.
Option one involves looking for an easy online claims form from the old council, as this would likely be the simplest and quickest way to check and claim.
Savers can search the council name and the words ‘council tax refund form’, to find the correct document if it is available for their council.
Another possible way to check is emailing, live chatting or calling the council – the details for which can be found on the Gov.uk website.
Members of the Money Saving Expert team attempted calling their old councils to see the process and most were only asked for their name and old address whilst others had some security questions to go through.
However, the report noted the process was “usually straightforward”.