Just called them to ask a hypothetical question. There is no "interest" due as such if an individual underpays or falls behind...
If you fail to make a payment then you receive three reminder letters over the course of three months. If you're still behind in your payments then it goes to court which is when it begins attract "costs" which would be a minimum of £68.
After it's court then then it's all dependent upon the specifics of the case: whether they contacted the council, whether they're trying to make payments, salary/benefit income, etc.
So not a simple answer.
Mr Dazzler.
First off, I must apologise to you. I fear I told you an untruth. In my defence it was an accident and I blame my poor memory.
I checked my rates paperwork last night and found all the relevant forms for the refund the council paid me.
This was in November 2007.
There are references to interest payments, but not for what you mean or what I thought.
Sorry.
The amounts repaid to me over a period between 2000 and 2007 amounted to circa £1400 which equated to being taxed at one band above what I should have been charged.
But no interest for this overpayment was applied and I just received the difference back between the two rate bands.
So over about 8 or so years I was refunded circa £160 per year as being the overpayment per annum.
I can remember a neighbour who was also due a refund enquired about interest payments and was informed that because of the reason that the refund came about was told it would be a straight refund with no interest being applied. This point was not persued.
The reason we got this refund was rather complicated, but I suspect the reason that you are now expecting a refund is very similar.
What often actually happens on a new development is this.
The builder submits the drawings to various interested departments of the council for their information, permissions and approvals.
Two of these departments are the rates department and one of the others is the buildings approval department.
Althought these departments are all under the single umbrella of the council, they work independantly of each other to a large degree.
The rates department look at the drawings and assess the rateable value of the projected dwellings individually. Each home is given a rates value according to many different bits of criteria. Number of bedrooms, style of home, plot size and actual plot location are but a few of the many parts the council use to finally arrive at what band the home will be placed.
BUT............
Between THAT point in time and when you move in and start paying rates many changes can and often do take place.
Not least is that the builders "fiddle" with the overall plot layout and squeeze in more homes in on the site than was originally given council approval. This is quite a common practice. Once the site is finished, the council come down with the drawings and THEN discover that the builder has erected more homes than they were originally gave permission for.
They then scuttle off back to their offices and make the builders pay more costs because they were naughty boys and broke the rules. Which they gladly do as they have made more money by selling more homes that they really should have.
Very, very rarely do councils make bulders actually remove buildings to comply with their original drawings. They are simply fined (quite heavily), the builders pay up. The council gets extra dosh. The builder sells more homes. Everyone is happy. Cushti.
EXCEPT.............
That the department that originally calculated the rates dont get involved in all these "building" changes and so is never told of all this.
So more homes have been squeezed into the site and everybodys plots are a tiny bit smaller than was shown on the original plans. Sometimes whole new roads are added if there is room.
These changes on a plot by plot basis are often small, but often significant when calculating rates. So, if somebody living on the site queries his rates banding, then its only when a council officer comes onto the site with his "original" drawing and makes a visual comparison and - shock horror - its not like the actual layout. He then scuttles off back to his office and eventually someone recalculates each homes rateable vaue only to find that in some cases, people are being overcharged because their home plot size takes it down into a lower rates band.
And that my friends is how it often happens - all least it did to me.
Waffle over.
). All I can see now out of our lounge is a wall of conifers. 
