Hundreds of millions of pounds in UK rebates and reductions go unclaimed each year. Rising Council Tax and frozen tax thresholds make 2026 a critical year to check.
Figures from the Resolution Foundation, government data and Freedom of Information requests reported by The i Paper reveal the scale of what households are missing.
Key figures at a glance:
- Most English councils are raising Council Tax by up to 5% from April 2026, adding roughly £111 to a typical Band D bill.
- Around 178,000 HMRC rebate cheques went uncashed in the 2024 to 2025 tax year, worth a combined ~£144 million.
- Marriage Allowance is worth up to £252 a year. Backdated claims could total ~£1,260 for eligible couples.
- The Personal Allowance remains frozen at £12,570 for the 2026 to 2027 tax year.
Why household bills keep climbing
Frozen income tax thresholds are driving what the Resolution Foundation calls fiscal drag. The Personal Allowance has been fixed at £12,570 since April 2022.
As wages rise with inflation, more earnings cross into taxable bands. That squeeze is expected to continue until at least 2030 to 2031.
Council Tax is also climbing sharply. The average Band D bill in England for 2026 to 2027 is approximately £2,392, according to government data.
That represents a rise of around 5%. Seven English councils have permission to go higher, including Worcestershire, Shropshire and North Somerset.
In Scotland, increases range from 4% to 10%. Wales is seeing rises of around 4% to 5%.
UK rebates and reductions many people miss
HMRC tax refunds are one of the largest pools of unclaimed money. Freedom of Information figures reported by The i Paper show that HMRC issued approximately 1.7 million rebate cheques in the 2024 to 2025 tax year.
Of those, around 178,000 were not cashed. The combined value was roughly £144 million — approximately £800 per person on average.
HMRC no longer issues PAYE refunds automatically in most cases. The Low Incomes Tax Reform Group (LITRG) has warned that taxpayers now need to claim refunds themselves.
Claims can be made through the HMRC app, a Personal Tax Account or by phone. Overpayments from the 2022 to 2023 tax year onwards may still be recoverable.
Marriage Allowance is another widely underclaimed relief worth checking as part of any UK rebates and reductions review. Eligible couples can transfer £1,260 of unused Personal Allowance to the higher-earning partner.
That reduces the recipient’s tax bill by up to £252 a year. Backdated claims for up to four previous tax years could be worth approximately £1,260 in total, according to HMRC estimates.
Council Tax discounts and exemptions
Council Tax reductions are among the most underclaimed UK rebates and reductions in 2026. The Single Person Discount cuts bills by 25% for anyone who is the sole adult in their home.
It is widely available but often goes unclaimed after a change in circumstances. Applying is straightforward through your local council.
The Severe Mental Impairment (SMI) exemption can reduce Council Tax by 25%, 50% or more depending on the household. Eligibility typically requires a medical certificate and receipt of a qualifying benefit.
Low-income households may also qualify for Council Tax Reduction. Sometimes called Council Tax Support, this relief can cover a substantial portion of the bill in some areas.
Work expenses and pension tax reliefs
Employees who pay for work-related costs out of their own pocket may be entitled to tax relief. HMRC’s flat-rate allowances range from £60 to several hundred pounds depending on the occupation.
Workers who use their own vehicle for business travel can claim mileage at HMRC’s approved rates. The rate is 45p per mile for the first 10,000 business miles and 25p thereafter.
Higher-rate taxpayers contributing to a workplace pension often miss out on extra relief. Contributions typically receive automatic relief at 20%, but those paying 40% or 45% need to claim the rest.
This additional relief can be claimed through Self Assessment or by contacting HMRC. It applies to the current and previous tax years.
Energy support you could be entitled to
The Warm Home Discount provides a one-off £150 rebate on electricity bills for eligible low-income households. The scheme is expected to continue into the 2026 to 2027 winter period.
Eligibility is typically based on receipt of Pension Credit or other qualifying means-tested benefits. Many recipients receive the discount automatically.
The Cold Weather Payment gives eligible benefit claimants £25 for each seven-day period when local temperatures drop to 0°C or below. Payments are triggered automatically and do not need to be claimed.
What to do next
If you think you may be missing out on UK rebates and reductions, acting now could help. Many of these reliefs take only a few minutes to check online.
How to check and claim:
- Log in to your HMRC Personal Tax Account or the HMRC app to check for outstanding P800 calculations and claim refunds.
- Apply for Marriage Allowance on GOV.UK if one partner earns below the Personal Allowance and the other pays basic-rate tax.
- Contact your local council to check whether you qualify for a Single Person Discount, SMI exemption or Council Tax Reduction.
- Review your work expenses and claim tax relief through HMRC for uniforms, tools, mileage or working-from-home costs.
- Check your pension contributions and claim any additional relief through Self Assessment if you pay 40% or 45% tax.
Refund claims can generally be backdated for up to four years. Reviewing the 2022 to 2023 tax year onwards is worthwhile.
Could you be owed a rebate?
With frozen thresholds, rising Council Tax and underclaimed reliefs, many UK households are paying more than they need to. Checking your entitlements could be worth hundreds of pounds.
Not sure if you are owed a refund? The free tax rebate calculator at Tax Rebate Services can help you estimate what you might claim.
Key Takeaways
- Council Tax is rising by up to 5% across most of England from April 2026, with seven councils granted permission to go higher.
- Around 178,000 HMRC rebate cheques worth ~£144 million went uncashed in the 2024 to 2025 tax year.
- Marriage Allowance could save eligible couples up to £252 a year, with backdated claims potentially worth ~£1,260.
- Council Tax discounts, work expense reliefs and pension tax relief are among the most missed UK rebates and reductions in 2026.
- Refund claims can generally be backdated up to four tax years, making previous years worth checking.
