PPI claims management companies have found a new way to make money by identifying homes that are in the wrong municipal tax band and offering to make a claim on your behalf. These firms identify potential clients by seeing if a house on the same street pays more than its neighbors. They then cold-call the identified properties and offer to make a claim for a full refund for all years of overpayment, as well as a reduction in future municipal tax bills. This service is usually around 30% of the money claimed.
A lady was recently contacted by one of these claims management firms and found that she and her neighbor were in a higher tax bracket than the other properties on their street and could qualify for a full refund. He decided to hire the claims firm and got a £ 800 refund as a result! She paid the company £ 300 as payment to process her claim and now pays £ 10 less city tax each month. However, her neighbor decided to investigate how she could claim the money herself and found that the process was not too complicated. You also managed to get a full refund, but you kept 100% of the money you claimed!
How does it all work?
Every home in the UK is assigned a specific valuation band, known as a city tax, which is managed by the Appraisal Office Agency. The cheapest bands are assigned a gradually increasing ‘A’ rating and the most expensive houses are assigned to the ‘I’ band.
For homes based in Scotland and England, the valuation band is designated by the value of the property in 1991, not by how much the property is valued in today’s market. However, if you reside in Wales, your tax bracket is allocated using the 2003 market value price.
So, if you suspect that you may be in the wrong tax band and as a result you are paying too much city tax, just see what your neighbors are paying. If you find that there is a difference in price but a similarity in ownership, then you may well receive a refund.
Visit ‘voa.gov.uk’ to see which band your neighbors have been assigned, if there really is a difference, contact an agent from the Valuation Office Agency and ask them to investigate your claim. You will have to fill out the paperwork, but you can do it yourself, you don’t need a claims management company, which means you can keep 100%, not just 70%.
Generally, you will have to wait up to 30 days for your claim to be investigated, but if the Valuation Office Agency agrees that a mistake has been made, your band will be changed. The service is free, you can not only get a nice lump sum, but you will also save on your future municipal tax bills.