Thousands 'paying too much council tax'

Up to 400,000 homes in England 'could be overtaxed'

Monday, 25, Feb 2008 12:00

Up to 400,000 households could have been wrongly paying too much council tax after ministers quashed concerns many homes had been wrongly banded.

Minutes released by the council tax revaluation programme board show ministers have known for up to two years that thousands of homes have been incorrectly banded, leaving householders paying too much council tax.

They also reveal the government is planning a future revaluation of bands in England, as happened in Wales in 2005, despite claims to the contrary last November.

The minutes, released in response to Conservative parliamentary questions, were supposed to have sensitive details blacked out but an electronic error meant the controversial passages were visible.

Concerns about incorrect banding were reportedly suppressed because of the effects of adverse press coverage "in the current climate".

Eric Pickles, shadow local government secretary, said the minutes showed ministers had tried to hide plans to revalue homes, which exposes thousands to the possibility of higher council tax bills.

He said: "Thanks to a colossal blunder by Labour ministers, the cat is out of the bag that a council tax revaluation is taking place by stealth.

"It is scandalous that the government has found out that many homes could [be] wrongly banded, but have refused to correct these errors to avoid paying refunds and incurring bad press coverage.

"A revaluation isn't needed to correct simple mistakes that should be fixed. This shows how Labour is only interested in changing council tax when it raises extra money for Gordon Brown's coffers. Ministers have been caught red-handed fiddling the tax system to make families pay more."

The 2005 revaluation in Wales revealed 1.85 per cent of homes were "consequentials," meaning they had been placed in too high a band.

If similar errors have taken place in England it is estimated up to 400,000 homes could be overtaxed.

A spokesman for the Department of Communities and Local Government said the Valuation Office Agency believed the "overwhelming majority" of council tax bands are accurate.

"Anyone who has evidence that they are in too high a band can request a review and lower their banding if successful, they will also qualify for a rebate from their council," he added.

Nevertheless, Liberal Democrat communities spokesman Julia Goldsworthy said the revelation would come as a "bitter blow" to people struggling to pay their council tax bills.

"If the situation were reversed, you could guarantee these people would have had the taxman breathing down their neck demanding the money to be repaid," she said.

"The Lyons Review made it perfectly clear that the current council tax system was not fit for purpose, yet Gordon Brown has done nothing more than kicked the report into the long grass."

The Liberal Democrats are campaigning for council tax to be abolished and replaced with a local income tax.