Council tax discounts, exemptions and more ways to save money

We look at ways to help you save on council tax from council tax discounts, exemptions and other ways to cut the cost of your bill

council tax calculation
(Image credit: Getty)

Many households have seen their annual council tax bills rise by an average of £100 a year from this month but as council tax is just one of many bills going up this month, we look at council tax discounts, exemptions and other ways to cut the cost of your bill.

Council tax payments are made to your local authority and go towards the upkeep and running of the local community along with local services like roads, lighting, looking after parks and cemeteries as well as bin collections and social care.   

Council tax bills went up this month and the added cost may have been a shock for many households, who had a temporary reprieve from council tax bills, as payments are worked out over ten months – which means traditionally you don’t make payments in February and March.

Even if you don’t make use of all the services provided, you can’t opt out of paying council tax and while you can’t switch councils to pay cheaper council tax, (unless you move house), there are still lots of ways you could save on your council tax.

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%.

For example, you might be able to claim a council tax reduction if you are on a low income – which could be up to 100% of your bill. And pensioners may be able to claim council tax support if they claim pension credit

Note: you'll need to apply to your local council for any discounts as they’re not paid automatically. Make sure you apply as soon as you can as there may be time limits on how far these discounts can be backdated. 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 if you live with someone who is in hospital long term.

Student discounts

Households comprised entirely of full-time students do not pay council tax 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.

To claim this deduction, you’ll need to show that you have either an extra bathroom, kitchen or another room needed for the disabled person, or that you need extra space within your home for the use of a wheelchair. It's worth knowing that the person responsible for paying council tax does not need to be disabled, but there must be at least one disabled person, either an adult or child, living there as their main home. 

Under the disabled band reduction scheme, instead of being given a fixed discount, your council tax can be reduced by a whole band.  This could for example mean being moved from say paying the band E rate of 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 payment, or ‘premium’.  This can be 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. Remember: the rules on this are different in Scotland.

How to claim council tax discounts

If you think you’re entitled to a council tax discount, you should apply directly to your local council. In most cases, if you go to your local council website and look for the council tax section, there is likely to be a list of discounts and reductions that you can apply for.

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. For example, if a new partner moves in and you no longer live by yourself, which may mean you are no longer eligible to claim the single-person council tax discount.

Claw back council tax overpayments 

Council tax rebates

If you’ve moved house, you could be in line for a council tax rebate. If you tell your council you’re moving home and pay your council tax by direct debit, then any payments you’ve made in advance should be refunded automatically to your bank account. 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 that's resulted in you being put into a cheaper band, 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

Spread your 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 pay by direct debit, you may be able to arrange with your council which date of the month you make payment.

If you want to spread the cost of your council tax, you can ask your local council if you can split your payments over twelve months, instead of ten. There is no charge to do this. 

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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!