Why millions of Britons are charged too much council tax

David Prosser explains why homeowners are questioning the council tax valuations of their properties

It's easy to play the blame game when it comes to this year's expected average 4 per cent increase in council tax bills. But while the Conservatives blame the Government for the hikes, unveiled by the Local Government Association this week - and ministers say local councils are responsible for setting the tax - millions of taxpayers are missing out on the chance to actually reduce what they pay.

Increasing numbers of taxpayers are challenging the banding of their properties, which determines the size of your bill.

Properties in Wales were revalued for council tax purposes last year, but English homes have not been revalued since the original bandings - from A to H - were introduced in 1993.

Many people believe their original valuations were incorrect. If so, it is possible to challenge your banding, by appealing to the Valuation Office Agency (VOA). It has 82 local offices around the country.

Homeowners have six months after moving into a property to challenge their council tax valuation. If the VOA rejects your case, you then have right of appeal to the independent Valuation Tribunals Service (VTS).

In theory, this means only new occupiers can challenge a valuation. In practice, the VOA will considers challenges from everyone in the same way - the only difference is that people who have missed the six-month deadline do not have access to the VTS.

Andy Mahady, of the VOA, says: "Ultimately, in England at least, your council tax band is based on the value your property would have had on the open market in 1993, so if you can show that was inaccurate, your challenge has a good chance of succeeding."

Around 6,700 taxpayers have completed challenges to their banding over the past 10 months alone, with 4,000 succeeding so far. The success rate reflects the fact that, in a system where millions of properties have been valued, some errors are certain to be made. There have been a rash of cases in recent years where people have discovered next-door neighbours with identical properties paying less tax.

Christine Melsom, an organiser of the Is it Fair? campaign, says unfair valuations are just one aspect of her organisation's dislike of the current council tax system. Is it Fair? is currently organising the Send Your Bill to Prescott Day - on 30 March, its members will write to deputy prime minister John Prescott asking him to explain why their bills are so high.

"We've got people joining the campaign every day and many are not prepared to pay next year's bills in full," Melsom says. "The response has been enormous."

In the absence of council tax reform, however, no-one should pay more than necessary. And even if your banding is correct, you may still be missing out on a rebate. Of 7.3m people eligible for council tax benefit, 2.7m people fail to claim the money - the average amount people miss out on is £390 a year.

Sally West, incomes policy officer at Age Concern, says those missing out include 1.4m pensioners, many of whom are on fixed incomes and struggle with above-average bill increases.

"If you are on a low income and currently pay council tax, the chances are that you will be eligible for council tax benefit, even if you receive other benefits or council tax discounts," West says.

"If you receive the guarantee part of the pension credit, income support or income-based Jobseekers Allowance, you should get a full council tax rebate - but you must make a claim to your local Benefits Agency."

Finally, remember that anyone living alone is entitled to a 25 per cent council tax discount, irrespective of whether they are allowed to claim benefit.

And the second adult rebate can provide a rebate for people who do not qualify for their own benefit but have someone on a low income living with them.

My battle to pay less on my bungalow

Denis Bustard, from Dorset, is in the middle of challenging his council tax valuation. Despite living in a two-bedroom bungalow, Denis's home is deemed to be in Band G, towards the top end of the scale, and his annual bill is currently £2,181.

Denis is particularly incensed because several houses within a few minutes' walk of his home are in lower tax bands, even though they have three or four bedrooms. One such property is just 60 yards away.

"East Dorset council argues that my house has more space and that bungalows are valued more highly than houses for each square metre," Denis says. "It's ridiculous - estate agents base their valuations on the number of rooms in a property, so how can my bungalow be worth more than a four-bedroom house?"

So far, Denis's campaign has been unsuccessful, but he is now challenging the original basis on which the valuation of his property was made in 1993.