Millions of homeowners could be owed rebates worth hundreds or thousands of pounds because their homes are in the wrong council tax band. More than 900,000 homes in England have been moved into lower bands since 1993, but Martin Lewis, a self-styled moneysaving expert, believes that these are the tip of the iceberg.

After an investigation into misbanding, Mr Lewis has devised an online council tax cashback system that can tell you in minutes whether you are likely to be eligible for rebanding and a rebate. If you are, the guide, at www.moneysavingexpert.com/ council, will take you through the process. If you are not, it is best not to chance a reassessment, which could result in you — or your neighbours — being moved up a band.

Most banding mistakes come down to rushed valuations when the system was introduced in 1991, with estate agents commissioned to value hundreds of homes a day.

Mr Lewis’s first step for concerned homeowners entails comparing your home’s tax band with the bands allocated to neighbouring homes and similar properties in the immediate area. This can be done with minimum effort at the website of the Valuation Office Agency (VOA), at www. voa.gov.uk. If you are paying more than neighbours in near-identical properties, you are probably paying too much.

Step two involves checking the approximate value of your home in 1991, when banding was introduced. To calculate this, find the most recent value of a home similar to your own in your street at www. nethouseprices.com. Enter this figure into the Nationwide house price calendar at www. nationwide.co.uk/hpi to convert to an approximate 1991 value. Then go back to the Money Saving Expert website to check which of the eight bands this puts your home in.

If you are paying more council tax than neighbours in similar homes and the 1991 valuation puts your house in a lower band than it is now, you may have a case for rebanding.

However, your home could be in the wrong band even if the assessors got it right in 1991. If new local developments have damaged the property’s value, cheaper council tax could be some consolation. Conversely, improvements made before you bought your home, but after the 1991 valuation, may mean that you should be paying more.

The same process outlined here applies in England and Scotland, although residents of Scotland should use the website of the Scottish Assessors Assocation, at www.saa.gov. uk, instead of the VOA. A different council tax system applies in Wales, but bands can still be contested with the VOA. A new system of annual revaluations is in place in Northern Ireland.

CASE STUDY ‘EVERYONE SHOULD DO IT’

ANDREW HEALING, 37, works as a company director in Manchester and lives with his wife and three children in the North Yorkshire village of Hellifield. The idea of checking his council tax rate came when a friend mentioned his own successful rebanding.

Mr Healing followed Martin Lewis’s guide at the Money Saving Expert website and quickly found that he was paying £1,600 a year in council tax in band E, while neighbours in similar homes were paying £1,300 in band D.

An e-mail to his local valuation office was acknowledged by return of post and a second letter confirming his rebanding to band D and containing a cheque for £640.12 in rebated tax followed in days. Mr Healing says: “It took me 20 minutes from logging on to contacting the valuation office. The process was so easy. Everyone should do it.”