Millions of households could be paying more council tax than they need to, as many people do not realise they may qualify for a discount. Under Government rules, some residents can reduce their bills depending on their circumstances, and in some cases, pay nothing at all.

Council tax is charged each year by local authorities and helps fund essential services such as waste collection, libraries and street maintenance. How much you pay depends on where you live and the valuation band of your property. In most cases, anyone aged 18 or over is expected to pay, and couples living together are jointly responsible.

But the system includes several exemptions and reductions that can dramatically cut costs.

Some households qualify for a partial discount, while others may be able to remove their bill entirely.

This includes full-time students and people who are classed as severely mentally impaired, the Mirror reports.

Households where every adult is a full-time student are exempt from paying council tax.

GOV.UK says students must be on a course lasting at least one year and involving 21 hours of study per week.

Younger people studying up to A-level also qualify if their course runs for at least three months and involves 12 hours of study each week.

If even one person in the home is not a full-time student, the household will receive a bill, but a discount may still apply.

Those who are severely mentally impaired may also be eligible for a full discount.

To qualify, a GP or medical professional must confirm the condition, and the person must also meet the requirements for certain benefits.

A 100% discount applies if the person lives alone or only lives with other severely mentally impaired adults or full-time students. If everyone else in the home is “disregarded,” the reduction is 50%.

Low-income households can apply for council tax reduction through their local authority.

GOV.UK says: “Your bill could be reduced by up to 100%. You can apply if you own your home, rent, are unemployed or working.”

Each council runs its own scheme, so the exact rules vary by area. Income, savings, benefits and the number of adults living in the property are all taken into account.

Some people are not counted when calculating council tax, which can help reduce the overall bill.

These individuals are considered “disregarded”. This includes anyone under 18, apprentice scheme participants, people under 25 funded by the Education and Skills Funding Agency, student nurses, live-in carers looking after someone who is not their partner or child, diplomats and foreign language assistants registered with the British Council.

Even if someone is disregarded, they still need to apply for a discount as it is not applied automatically.

Councils will check who lives in the property, what benefits are received and whether the household meets any exemption categories.

Residents who think they might qualify are being urged to check the rules on GOV.UK or contact their local authority directly.