With councils facing severe funding pressure in the aftermath of COVID-19, the Institute for Fiscal Studies (IFS) has predicted that council tax could rise by up to £220 in the next three years.

In light of the potential tax increase, it’s never been more important to ensure you’re paying tax correctly. Each year, thousands of families in the UK are overcharged on their council tax, due to being in the wrong tax band. Anyone sat in the wrong band could be needlessly paying up to 20% extra every year.

James Andrews, senior personal finance editor at money.co.uk said: “Council tax bands were first introduced in the early 90s, and haven’t been updated since.

“And the speed at which the banding was implemented at the time means potentially hundreds of thousands of properties could be mis-attributed. And all that is before we get to the homes that have been built since then. The first step in bringing your council tax payments down is to check your tax band on the government website. If you think your band is wrong, then you can make an appeal.

“Just be careful to do your research first, as you could see your council tax rise as well as fall.

“It’s also essential to check if you are entitled to a discount on your council tax, as this could save you a substantial amount over the course of the year. For example, if you’re the only adult at the address, are currently receiving benefits or on Universal Credit, then you may be entitled to up to 25% off your council tax.

“If you, or someone you live with is a carer, or has a health condition or disability, then you may also be able to claim a discount. People diagnosed with a serious mental health condition are also entitled to a discount. Most students can claim exemption from paying council tax, meaning they won’t have to pay a thing, however this isn’t done automatically – students need to visit the government website to check their eligibility for a discount.

“Discounts and exemptions are backdated, so if you’ve overpaid then you could be able to claim the money back. The same goes for a refund for being in the wrong tax band, meaning you could in theory backdate payments to the 1990s, a serious sum in most cases.”