How to Apply for Council Tax Reduction

At Towerstone Accountants we provide specialist property accountant services for property owners landlords and individuals dealing with council tax and property related charges across the UK. This article has been written to explain how to apply for council tax reduction in clear practical terms so you understand what applies to your situation. Our aim is to help you avoid confusion stay compliant and make informed decisions.

Council Tax Reduction, sometimes called Council Tax Support, is a means tested discount that can significantly reduce your council tax bill if you are on a low income, receiving benefits, or facing financial difficulty. Despite this, many people who are entitled to help never apply, often because they assume they will not qualify or they find the process confusing.

Applying for Council Tax Reduction is not automatic. You must apply, provide information, and keep your claim up to date. The rules are set nationally in outline, but the actual schemes are run by local councils, which means eligibility and award levels can vary depending on where you live.

This guide explains, step by step, how to apply for Council Tax Reduction in the UK, who can claim it, what evidence you need, how decisions are made, and what to do if your application is refused.

What is Council Tax Reduction?

Council Tax Reduction is a discount applied to your council tax bill if you are on a low income.

It can:

Reduce your council tax bill

Reduce it substantially

In some cases reduce it to zero

It is not a loan and it does not have to be repaid, as long as the information you provide is accurate.

Council Tax Reduction replaced Council Tax Benefit and is administered by local councils, not central government.

Who can apply for Council Tax Reduction?

You can apply for Council Tax Reduction if you are liable for council tax and your income or circumstances mean you may need help paying it.

This includes people who are:

In work on a low income

Unemployed

Self employed with fluctuating income

Receiving Universal Credit

Receiving Pension Credit

Receiving disability benefits

Living alone or supporting dependants

You can apply whether you rent or own your home.

Council Tax Reduction is means tested

Council Tax Reduction is means tested. This means the council looks at your financial situation, not just your council tax band.

They will usually assess:

Your income

Your savings and capital

Who lives in your household

Whether anyone has disabilities

Your rent or mortgage situation

There is no single income limit that applies everywhere. Each council sets its own scheme within national guidelines.

Pension age vs working age rules

One of the most important distinctions is between working age and pension age applicants.

Pension age applicants

If you or your partner have reached State Pension age:

Councils must follow national rules

Support is generally more generous

You may receive up to 100% reduction

Schemes are more consistent across councils

Pension age applicants are often surprised how much help they qualify for.

Working age applicants

If you are working age:

Councils design their own schemes

Support levels vary by area

Many councils require a minimum payment

Reductions may be capped

This means two people with identical incomes can receive different reductions depending on where they live.

What Council Tax Reduction can cover

Council Tax Reduction applies to:

Your main home

The council tax band your property is in

The period you are liable

It does not change the band of your property. It reduces the amount you are asked to pay.

Step one: check which council you need to apply to

Council Tax Reduction is handled by the local council that bills your council tax.

This is the council where the property is located, not necessarily where you work or previously lived.

If you have recently moved, you must apply to the new council.

Step two: find the Council Tax Reduction application

Most councils require you to apply online.

You can usually find the application by searching:

“Council Tax Reduction” plus your council name.

Look for sections titled:

Council Tax Reduction

Council Tax Support

Help with council tax

If you cannot apply online, councils usually offer paper forms or assisted applications.

Step three: complete the application form

The application form asks detailed questions about your circumstances.

You will usually be asked about:

Your personal details

Your address and council tax account

Who lives in your household

Your income

Your savings

Benefits you receive

Rent or mortgage details

It is important to answer honestly and accurately.

Step four: provide supporting evidence

Evidence is a critical part of the application. Most delays happen because evidence is missing or incomplete.

You may be asked to provide:

Proof of identity

Proof of income

Payslips or benefit statements

Universal Credit statements

Bank statements

Proof of rent or mortgage

Proof of disability benefits

Many councils allow uploads of photos or PDFs, but documents must be clear and readable.

Income that councils usually assess

Councils will look at most forms of income.

This commonly includes:

Wages and salaries

Self employed income

Universal Credit payments

Jobseeker’s Allowance

Employment and Support Allowance

Pension income

Private pensions

Some benefits are ignored or partially ignored, depending on the scheme.

Savings and capital rules

Savings and capital affect Council Tax Reduction.

In general:

Savings under a lower threshold are often ignored

Savings above that threshold reduce entitlement

Savings above an upper limit may stop entitlement

The exact thresholds vary by council and whether you are working age or pension age.

Importantly, the value of the home you live in is ignored.

Step five: submit the application

Once you submit your application:

The council will acknowledge it

Your claim is assessed

You may be asked for more information

Some councils apply reduction provisionally while assessing, others wait for a decision.

How long does a decision take?

Decision times vary.

Typically:

Simple cases may be decided within 2 to 4 weeks

Complex cases can take longer

Missing evidence causes delays

If you are struggling to pay council tax while waiting, contact the council and explain the situation.

What happens after your application is approved?

If your application is approved:

Your council tax bill is recalculated

A new bill is issued showing the reduced amount

Payments are adjusted

The reduction usually applies from the date you became eligible, which can be earlier than the application date.

Can Council Tax Reduction be backdated?

Yes, in many cases Council Tax Reduction can be backdated.

Backdating is often allowed if:

You were eligible earlier

You had good reason for not applying

You apply within a set time limit

Pension age applicants often have more generous backdating rules than working age applicants.

You should always ask about backdating if your circumstances changed before you applied.

What if you are on Universal Credit?

Being on Universal Credit does not automatically give you Council Tax Reduction.

You must still apply separately.

However:

Universal Credit information is used in the assessment

Councils often verify UC directly

Your UC award affects the reduction level

Many Universal Credit claimants qualify for Council Tax Reduction but fail to apply.

Council Tax Reduction and single person discount

Council Tax Reduction is separate from the single person discount.

You can receive:

Single person discount of 25%

Plus Council Tax Reduction

If you live alone and are on a low income, combining both can significantly reduce your bill.

What if your application is refused?

If your application is refused or the reduction is lower than expected, you have rights.

You can:

Ask the council to explain the decision

Request a review or reconsideration

Provide additional evidence

Appeal if you believe the decision is wrong

Councils make mistakes and decisions can be challenged.

Common reasons applications are refused

From experience, refusals often happen because:

Income is assessed incorrectly

Savings are over the local limit

Evidence is missing

Household details are wrong

Changes were not reported

Understanding the reason is key before appealing.

Reporting changes in circumstances

Once you receive Council Tax Reduction, you must report changes.

This includes changes to:

Income

Employment

Benefits

Household members

Address

Failure to report changes can lead to overpayments and backdated bills.

Council Tax Reduction vs Council Tax exemption

Reduction is not the same as exemption.

Reduction lowers the bill based on income

Exemption removes council tax liability entirely

Some people qualify for exemptions, such as full time students or certain empty properties.

Make sure you are applying for the correct type of help.

Council Tax Reduction for landlords and homeowners

Council Tax Reduction is available to:

Tenants

Homeowners

Landlords living in their own property

Owning your home does not prevent you from claiming if income is low.

Council Tax Reduction and arrears

If you already have council tax arrears:

You can still apply for reduction

Reduction may reduce future bills

It does not automatically clear old arrears

However, it can make ongoing payments more manageable.

What if you are self employed?

Self employed applicants can claim Council Tax Reduction.

Councils usually assess:

Recent accounts

Average income

Bank statements

Fluctuating income can make assessments more complex, but self employment does not exclude you.

Help if you are struggling

If you are struggling to apply or understand the process:

Your council’s benefits team can help

Citizens Advice can assist

Welfare rights advisers can support appeals

Do not avoid applying because it feels overwhelming. Help is available.

A simple way to think about Council Tax Reduction

A helpful way to frame it is this:

If paying council tax is a struggle, you should apply.

The worst outcome is a refusal. The best outcome is a significantly lower bill.

Common myths about Council Tax Reduction

Some common misconceptions include:

You must be unemployed to qualify

You cannot claim if you work

Homeowners cannot claim

Universal Credit includes council tax

None of these are generally true.

Final thoughts

Applying for Council Tax Reduction is one of the most practical steps you can take if council tax is putting pressure on your finances. It is there to help people on low incomes, in work or out of work, and it can make a real difference to monthly budgets.

The process requires time and evidence, but the potential benefit is often substantial. Many people who assume they will not qualify are surprised to find they do.

If your circumstances have changed, your income is tight, or you are falling behind with council tax, applying for Council Tax Reduction should be one of the first actions you take rather than the last.

You may also find our guidance on how much is single person council tax and are students exempt from council tax helpful when reviewing your council tax position. For a full overview of council tax rules exemptions and reductions you can visit our council tax hub which brings all related guidance together.