Council tax discounts, exemptions and more ways to save money

Council tax bills go up every April - here are council tax discounts, exemptions and other ways to cut the cost of your bill.

council tax calculation
(Image credit: Getty)

Millions of households will see their council tax bills go up by 5% in April, whacking an extra £100 a year on the average bill. Here are the council tax discounts, exemptions and more ways to save money. 

Council tax bills are going up from next month and while there are limits on how high councils can hike up bills – those with social care duties are allowed to hike the cost by 5% without the need to hold a local referendum. 

Council tax payments are made to your local authority and go towards the upkeep and running of local services like roads, lighting, parks, bin collections and social care.   

Even if you don’t make use of all the services provided, you can’t opt out of paying council tax.

But, depending on your living situation, there are ways you can apply for a discount or reduction on the amount of council tax you pay.

Council tax discounts

There are many reasons you might be able to claim a discount on your council tax bill and depending on your financial and living situation you could be eligible for discounts of between 25 – 100%.

You may for example be able to claim a council tax reduction if you are on a low income – which can be up to 100% of your bill. 

Pensioners may also be able to claim council tax support if they claim pension credit

Worth knowing that you’ll usually need to apply to your local council for any discounts as they’re not paid automatically.   Here are some of the other discounts you can claim.

Single-person council tax discount

If you are the only adult living in your home – you may be able to claim a reduction in the form of a single-person council tax discount.  This can reduce your council tax bill by at least 25%.   

Even if you live with other adults, some may be disregarded for council tax purposes, for example, if you have a live-in carer, adult students, or live with someone who is in hospital long term.

Student discounts

Households comprised entirely of full-time students do not pay council tax (opens in new tab) and are eligible for a 100% discount. 

To count as a full-time student, your course must:

  • last at least 1 year
  • involve at least 21 hours of study per week

This rule applies to both student accommodation (or 'halls') and to private rental accomodation. If you do get a bill, you can apply for an exemption.

You’ll get a bill if there’s someone in your household who’s not a full-time student, but your household might still qualify for a discount.

Disabled band reduction scheme

If you or someone you live with is disabled, and you live in a larger property than you might otherwise need, you may be able to claim a discount under the disabled band reduction scheme.

The way this works is that instead of being given a fixed discount, your council tax can be reduced by a whole band.  This could mean for example being moved from paying band E council tax to band D. 

And if you’re already on band A – which is the cheapest band – you should get a reduction of 17% on your bill.

This means cheaper bills, although how much you’ll save will depend on the council tax payable in your local area.

Certain carers

If you're a carer that meets the following criteria you will not pay council tax:

  • you provide care for at least 35 hours a week 
  • you live in the same property as the person you care for 
  • you are not the spouse or partner of the person you care for, or their parent if you care for a child under 18 
  • the person you care for receives one of these: either the middle or higher rate of the care component of Disability Living Allowance (only the higher rate in Scotland), the daily living component of Personal Independence Payment at any rate (only the enhanced rate in Scotland), Attendance Allowance at any rate (only the higher rate in Scotland), Armed Forces Independence Payment or the highest rate of Constant Attendance Allowance 
  • you do not have to claim Carer’s Allowance to qualify 

Second homes and empty properties

You’ll usually have to pay council tax on a property you own or rent that’s not your main home, like a holiday home.

Your council can decide to give you a discount - it’s up to them how much you can get. You'll need to contact your council to ask about a possible discount.

Often, if your home has been empty for two years or more, you can be charged an extra amount of council tax (or a ‘premium’). In some cases you can be charged up to four times your normal council tax bill if the property has been empty for 10 years or more.

Exceptions to this include the empty property being an annex or you being in the armed forces and having to move into armed forces accommodation as part of your job.

How to claim council tax discounts

You must apply to your local council for any council tax discount you believe you’re entitled to.

It’s important to do this as soon as possible as rules over how far discounts can be backdated can vary between councils.   In the event you do ask for any discount to be backdated – you may be asked to prove why you didn’t apply sooner.

If your circumstances change, it’s also important to tell your local council as this can affect any entitlement to council tax discount.

Claw back council tax overpayments

If you’ve moved house, you could be in line for a council tax rebate.

If you tell your council you’re moving and pay by direct debit, any refund to cover payments you’ve made in advance, will usually be made automatically.   

However, if you pay by cash or cheque you may need to contact your local council for a refund.

If you’ve successfully challenged your council tax banding and since ended up being put into a cheaper one, you may also be due a rebate.  This could be backdated as far back as 1993, or when you moved into the property if this is more recent.

Once you’ve contacted your council, any overpayments should usually be made within a month.

Spread your council tax payments

Council tax bills are usually split over ten months of the year, with payments starting in April.  This means you don’t make payments in February or March each year.

If you want to spread the cost, you can ask your local council if you can split your payments over twelve months instead.  

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Sue Hayward

Sue Hayward is a personal finance and consumer journalist, broadcaster and author who regularly chats on TV and Radio on ways to get more power for your pound.  Sue’s written for a wide range of publications including the Guardian, i Paper, Good Housekeeping, Lovemoney and My Weekly. Cats, cheese and travel are Sue’s passions away from her desk!