The news is all about tax rises and spending cuts right now. But here’s an opportunity where you can actually help people save money by cutting their taxes... and claim a cut of savings worth potentially millions of pounds nationwide for yourself!
It’s a way you can show people how to get council tax rebates, cut future bills... and make a good honest profit out of it for yourself too!
This is perhaps the ultimate crunch-busting opportunity and perfect for now. Millions of people are cash-strapped. Most of us are looking to trim our outgoings... and for most of us Council Tax is a very big outgoing indeed. I’m convinced this could be a really hot business to be in over the next few years.
So, how can you turn council tax rebates for others into a viable business opportunity for yourself?
I won’t beat about the bush. I’ll let you into the secret of how Council Tax reduction and refunding works right now.
You probably have an idea of how Council Tax works, more or less. Every property in the country is in one of eight bands, A-H, based on what it was thought to be worth back when Council Tax was introduced. The actual amount each householder in each band pays varies slightly in each local authority area depending on the budget of their local council.
What you might NOT know – and what I think makes Council Tax even more unfair – is that this banding process was rushed when Council Tax was first introduced (in 1991 in England). Because the authorities were in a big hurry to get the new tax system in place the valuers often visited each street and banded the properties in a few seconds without looking at them properly! So lots (and lots) of properties were placed in the wrong Council Tax band.
Experts have estimated that at least 1,000,000 (yes one million) homes in England alone were put in the wrong band. By last year 133,000 people had already had their bandings changed!
What this reduction and refunding service does is trawl the official Council Tax records looking for possible discrepancies in Council Tax bandings... and for locations where householders have already secured a reduction in their bill. Then offers to help those who could be affected to secure a reduction and a refund in return for a fee.
It’s all based around a “secret” database run by a little-known government agency. This rather dry, dreary database reveals the Council Tax banding for every single property in the country and gives details of any changes and appeals. Local council websites and Council Tax bills rarely make much mention of this database funnily enough. This business involves you scouring this database (it’s free to access and available online by the way... full details coming up) to identify householders who could benefit and then helping them with their claim.
Actually, this business is already up and running in a few places so it’s proven. But I think the potential is massively underexploited and there are lots of opportunities for new reduction and refunding services to set up. (By the way, bank charge and insurance reclaiming services already exist and have proved that there’s a demand for these kinds of services. Another reason why I think this could be a real winner right now.)
Urgent. If you’re interested in this business I’d strongly recommend you to look into starting it ASAP. Remember, Council Tax bills are sent out every April. As yet another big bill drops on to the doormat there should be a massive surge of interest from would-be customers about then.
What you need to get started now
This is really the ideal home office and computer- based business. You won’t ever have to leave home to do it if you don’t want to. It’s also ideal for part-time – you can work on it as and when you like, in the evenings and weekends and other spare time hours. It would be great for running over a laptop.
You’ll probably need some initial cash for marketing – £200, maybe less, should get you started.
One thing I would say – making a success of this is going to need you to spend a few hours a week diligently researching over the Internet, which might get a little tedious. But stick at it the rewards should be worth it.
There are three main stages to this business, which I am going to cover in the rest of this blueprint:
1. Finding customers for your business. That is, householders who may be eligible for a reduction and refund.
2. Signing customers up for your service.
3. Helping the customer obtain a reduction and refund, by helping them challenge their Council Tax.
So let’s get started...
Stage 1: Finding customers for your business
The first stage of this process can be operated entirely on your PC using the Internet.
I think this business has potential to operate nationwide. However, I’d suggest you start in your own area initially as it will be easier to do if you have a personal knowledge of the areas concerned.
I’d also recommend you start by looking at areas of middle to higher priced housing first of all. That’s simply because these offer more potential for savings and refunds than lower priced property so it should be easier to sign people up. This service will, however, appeal to EVERY householder you could say, in fact, that people living in cheaper properties will be more interested in this service as any saving is likely to be worth more to them in real terms than a “millionaire in their mansion”.
So, start by making a list of suitable areas – towns/villages/districts/suburbs – in your area.
Once you’ve chosen your overall area, what you need to do if possible is identify streets of properties where the houses (or flats) are of much the same size or value. (There’s a reason for this, which will become clear later.) Housing estates and apartments blocks are perfect for this purpose.
The next step is to find the postcodes for the area concerned, if you don’t already know it. Here’s a free resource that can help you with that. The Royal Mail website can also help you find individual street postcodes.;
Once you have a postcode the next step is to go to the official government databases which record Council Tax bandings and other relevant information for that area:
The one for England & Wales – run by the Valuation Office Agency or VOA – is here.
The one for Scotland – The Scottish Assessors Association or SAA – is here.
Now tap in the postcode. This will give you a list of every property in that street together with its Council Tax band. Through this site you can also find out about any Council Tax changers and appeals in that street too.
What you are looking for is anomalies: Situations where some identical or very similar properties may be in a different band to their neighbours. For example: Say in a street of similar-sized houses most of them are band D but a couple are band E. There’s a chance those band E houses could be in too high a band. Or cases where there has been a successful challenge to the bandings. For example, an entire block of apartments is in band D, but someone has appealed and had their banding reduced to C.
Not all streets will reveal opportunities. So keep looking until you find some. There have been some cases where properties of almost identical value have been not just one but two bands apart! I’ve certainly found a few in streets near my house... including one where a house is in band F, yet most of the very- similar looking adjacent properties are in band D.
Keep searching. I have to admit this part of the process can be a little tedious. Although it’s all work you can do from the comfort of home. It’s a little bit like panning for gold. All you need is a few tiny nuggets of anomaly to do very well indeed!
Make a list of all the streets where you find anomalies. Then print off a list of all the addresses that could be affected. You will use this as a mailing list to contact possible customers in the next stage.
Important to know... England, Scotland & Wales
Because the Council Tax system is slightly different in each country of the UK you will need to modify your approach slightly depending on where you are operating. There is, however, no reason why you cannot offer this service to other countries of the UK rather than your own.
The system works best of all in England where Council Tax bands were originally assessed way back in 1991 and where massive anomalies have already been found. (A planned revaluation of Council Tax has been postponed for now. If and when it does happen there could be even more potential for this type of business.)
It also works well in Scotland. Just note that you obtain information on Scotland’s Council Tax from a different source than England and the procedure also varies slightly.
It does not work quite so well in Wales: Council Tax there was revalued in 2005 so valuations should, in theory, at least be more accurate – although anomalies are still being found.
The procedure outlined here is not intended for use in Northern Ireland. That’s because the old system of rates still operates there rather than Council Tax. There is no reason, in theory, why you cannot help people appeal their rates too using a similar process, but this system is not designed for Northern Ireland.
PS. By the way, in case you are the odd person who wants to offer this service in the UK’s offshore islands it isn’t intended for use in the Channel Islands, Rockall or similar places either!
Stage 2: Contacting prospective customers
The next stage is to contact the householders at all the addresses you’ve found that could be in the wrong Council Tax band. What I’d suggest you do is do it gradually, a hundred or so at a time, so you don’t get too many responses all coming in at the same time.
If you’re a good salesman or woman you could go door-to-door and offer your service. But to make it simpler (and because an increasing number of people don’t like doorstep sales calls) I think it would be better to send a sales letter mailshot out explaining what you do. You can post or hand deliver it as you prefer.
So what should you say in your sales letter? Keep it fairly short and sweet. Most people are busy and don’t want to read pages of explanation. Simply tell the house owner that you’ve reason to believe there’s a chance they could appeal their Council Tax, get a reduction and even get a refund. And that you would be willing to help them do it in return for a reasonable charge.
Give examples. A good way of really adding clout to your letter is to find out what the local Council Tax levels are for that property – you can find out from your local council’s website. Then calculate what the saving and/or refund could be, perhaps backdated over several years.
Add some testimonials. After a few months, once you have some successful reductions and refunds, ask your past customers if they would be willing to give you a testimonial. Include that in your sales letter.
Sensible. When writing to householders I think it is a good idea to point out your research has indicated that they MAY be entitled to a Council Tax reduction and possibly a refund. But that you won’t know for sure until you investigate further for them. You wouldn’t want anybody to misunderstand your letter and think that they are guaranteed a refund which, at this stage, they are not.
Rented properties. By the way, it doesn’t matter if the house or flat your letter is sent to is rented rather than owned outright or on a mortgage. Tenants can still appeal their Council Tax and, assuming they are liable for the bill which they usually are, benefit from any overpaid tax or reduction.
Important... Sales letter presentation: When sending out a sales letter for this business it is very important it is immaculately presented. Remember that you’re offering a professional service and if your sales letter doesn’t look professional people are not that likely to trust you to help them with their appeals. Have some decent quality notepaper printed on good quality paper. Print out your letters using a good quality printer.
Free Marketing Material. I’ve had one of my copywriters put together a sales letter which you could adapt and use for sending out to prospective customers. If you’d like a copy you can download it here: www.canonburypublishing.com/taxrebate
I think you can see that this is a pretty irresistible offer to be making to hard-pressed householders all over the country right now. It’s certainly not what you’d call a hard sell!
Other ways of finding customers
While a direct approach to householders is probably going to be the best way of selling this service there may be some other methods that could bring in some extra work quite easily. You could try these as well as sending out mailshots.
Try sending details of your service to estate agents and/or letting agents. They come into contact with property owners on a daily basis and might be willing to introduce your service to them, perhaps in return for a commission on every customer signed up. Also look at contacting landlords who may own anything from a handful to a few hundred properties. Your local landlords associations may be willing to put you in touch.
Appointing agents. If you want to operate this service nationwide you could appoint agents in different areas to use their local knowledge to search for anomalies for you. They would send the leads out to you, and you would contact the householder. Pay them an hourly rate for their work. Try advertising for agents in local newspapers. It would be an ideal part- time job for conscientious early retired people or those with children to look after during the day wanting to work a few hours a week.
Stage 3: How to turn tax reductions into a profit for you
Keep sending out enough letters until you bring in whatever number of enquiries per week or month you wish to handle.
There are then two ways you could make money from this opportunity:
• Either you could just ask for a one-off fee (say £25, £50, £100 or whatever you think is fair) for revealing how the Council Tax refund and reduction process works. For example, you could put a booklet or kit together explaining the process – more information on how it works next. This would be simple and straightforward and wouldn’t call for you to get involved with any claims.
• Alternatively, you could offer to work on a success-fee basis. That is, you will help them appeal their Council Tax for no upfront fee... but they will agree to pay you a proportion of any Council Tax reduction or refund. I think 25% would be a fair proportion, but it’s entirely up to you.
Although this would involve more work on your part it could be much, much more profitable. Also, I think you can see that an offer to help make or save people money – at no upfront cost – would be very hard to say “no” to!
Important. You need to bear in mind that not every householder who hires you on a success-fee basis will obtain a reduction or refund. You will need to work on the basis that the income from those who DO should outbalance those who DON’T. Also, when you first start, your success rate might be fairly low. But the better you get at spotting anomalies in Council Tax bandings the better your success rate should be.
Helping people appeal and claim refunds... a few tips
Once a customer signs you up to help them, the next step is to show them how to ask for a review or make a formal appeal against their Council Tax banding.
Assuming this is successful it will result in their property being placed into a lower Council Tax band – perhaps saving them hundreds of pounds each and every year into the future. They could also be entitled to a refund for all the years they have been overcharged – which could amount to hundreds or even thousands of pounds.
Now, if you think helping people with Council Tax reviews and appeals (which is sometimes known as making a proposal) is difficult, it needn’t be. The whole appeals system is, unusually for a government department, very user-friendly and easy-ish to do.
It does not cost the householder anything to make an appeal.
There is plenty of information on how to request a review or appeal Council Tax and there’s a free booklet on the official Government DirectGov website here. So I won’t explain the procedure in detail here, I’ll just give offer you a few pointers.
Council Tax appeals are often just a matter of filling in a form and sending it off to the relevant authority (the local VOA in England and Wales and the SAA in Scotland). It can sometimes be done online.
In some cases the claim for reduction might just be accepted, particularly where it is pointed out that very similar neighbouring properties have already been given a reduction. In other cases the valuer might just want to visit the customer’s home or the houseowner might have to attend a simple tribunal and explain why they think their Council Tax band should be reduced.
Note that the appeal is against the actual banding. Not against the actual Council Tax amount which cannot be appealed.
In my research I’ve discovered that people have won Council Tax reductions for all kinds of reasons. Most often, anything that might justify their house being in a lower band because it is now worth less than it was when it was valued. (Council Tax valuations in England and Scotland are still based on 1991 valuations not current-day values, so general rises in property prices since then do not count.)
One of the main reasons for successful appeals seems to be a new road opening or a road becoming much busier... and since most roads have become a lot busier over the last 20 years this could apply to lots of people. New houses or other developments being built nearby can also cause a drop in value... and there has been an awful lot of development since 1991.
You need to bear this in mind though. The reverse can also happen. Council Tax bands can be increased on appeal as well as reduced. Although it’s very unlikely if you have done your research properly you MUST make the householder aware of this. And they must only proceed with the appeal if they are willing to take that (very small) risk.
So how much could you make from this kind of service?
Firstly, let’s assume you work on a flat-fee basis. You would earn £25, £50 or £100 multiplied by the number of people who asked for information on how the appeal process works. How many people would that be in a year? A hundred, a thousand, ten thousand? It depends on how many mailshots you send out and what the response rate is.
Now let’s assume you work on a contingency fee basis... which I think is going to be much more profitable long term. Your turnover would depend not only on how many householders you approached and how many responded – but what your success rate and commission rate is too.
But this is the very exciting thing: It could be a lot more per successful appeal handled than you probably think
As well as a reduction for the current (and future) years, overpayments can, subject to certain conditions, be claimed back from when Council Tax started back in 1993 (in England). And you can claim a commission on the refund for each and every year that the householder has lived in that property and paid the Council Tax. Which could amount to a fairly large sum!
Let’s take an extreme case as an example: If you found someone had been overpaying £400 on average every year since 1993 when this tax started they could be entitled to £6,800 back. If you worked on a 25% contingency-fee basis you could make £1,700 just for showing the houseowner how to claim their refund! (This is probably an example at the top of the scale, most will probably be for smaller sums but there will be many more of them.)
Even just two successful claims similar to the one above each month (or say four for half that amount) could net you over £40,000 a year.
Four successful claims similar to the one above each month (or 16 for a quarter of that amount) could net you over £80,000 a year.
And this is probably more likely if you devote yourself to this business full-time: Eight successful claims similar to the one above each month, or a combination of smaller claims, could net you over £160,000 a year!
It’s not inconceivable that you could, in fact, handle many more claims than this – although you’d probably need to operate nationwide to do so.
I hope you’ve enjoyed reading about this opportunity and will want to investigate the possibilities further in time for the April rush. But even if you don’t... maybe you could use this information to claim a Council Tax refund of hundreds or even thousands of pounds for your own house!
Let me know how you get on.
Current Council Tax Bandings England (Values in 1991):
A Up to £40,000
B Over £40,000 and up to £52,000
C Over £52,000 and up to £68,000
D Over £68,000 and up to £88,000
E Over £88,000 and up to £120,000
F Over £120,000 and up to £160,000
G Over £160,000 and up to £320,000
H Over £320,000
Scotland (Values in 1991):
A Up to £27,000
B Over £27,000 and up to £35,000
C Over £35,000 and up to £45,000
D Over £45,000 and up to £58,000
E Over £58,000 and up to £80,000
F Over £80,000 and up to £106,000
G Over £106,000 and up to £212,000
H Over £212,000
Wales (Values in 2005 with Band I added):
A Up to £44,000
B Over £44,000 and up to £65,000
C Over £65,000 and up to £91,000
D Over £91,000 and up to £123,000
E Over £123,000 and up to £162,000
F Over £162,000 and up to £223,000
G Over £223,000 and up to £324,000
H Over £324,000 and up to £424,000
I Over £424,000
by Nick Laight
Business Opportunities Expert
Nick Laight is the editor of What Really Makes Money and helps ordinary people find simple, workable home business opportunities. You can sign up for his free weekly eletter here:
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