Summary: Mr X complains the Council wrongly billed him for council tax even though his property was exempt. He says the Council did not respond to his correspondence helpfully and the repeated incorrect billing caused him an injustice as he was very distressed. Following our enquiries, the Council has taken steps to remedy the situation. We do not find the Council is at fault.

The complaint

1. Mr X says the Council billed him for council tax he did not owe. He said this caused him distress.

The Ombudsman’s role and powers

2. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
3. The Valuation Tribunal deals with appeals against decisions on council tax liability and council tax support or reduction.
4. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
5. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

6. I read the complaint file from the complainant and made enquiries with the Council.
7. I researched the relevant law and guidance. The Council and the complainant had the opportunity to comment on my first draft decision. The complainant made no comments. After considering the Council’s comments, I have changed my view.

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What I found

Houses in Multiple Occupation (HMOs) and who is liable to pay council tax

8. Local councils use a list, called the ‘hierarchy of liability’ to decide who is liable to pay council tax on a property. For example, in occupied, self-contained flats or houses, each flat usually has its own council tax band and council tax is usually paid by the tenant of a property.
9. Each case is fact specific but whether a property is banded as one or multiple dwellings usually depends on the extent of adaptations to the property and the degree of self-containment within the individual units. A shared house where the tenants occupy the whole property may constitute a single dwelling, whereas, in a house that has been fully converted into separate bedsits, each bedsit may constitute a single dwelling and be banded separately. This distinction can significantly affect the level of council tax payable and who is liable to pay it.
10. Where houses are identified as being in Multiple Occupation (HMO), a valuation officer is likely to apply a single council tax band to the whole property and landlords are liable.
11. If an owner receives a notice from a Listing Officer advising that their entry on the Council Tax Valuation list has been altered, the owner has six months to make a ‘proposal’ or appeal to the Valuation Tribunal.

Background facts

12. This account is a summary of the main events. It does not set out everything that happened but only those facts I consider material to our investigation. I have looked at some of the history that dates back to 2017 to provide a background to the complaint.
13. Mr X is the owner of a property, which I shall call House 1. After an inspection in April 2017, the Council viewed it as a number of separate flats all owned by Mr X. In May 2017 it asked the Valuation Office to adjust the council tax bands accordingly so council tax would be payable on each flat.
14. The Council says Mr X informed it that House 1 had been split into seven self-contained units from 1 January 2017.
15. The Council said Mr X would need to provide tenancy agreements for the flats and until he did so, they would each remain in his name and he would be liable for the council tax.
16. In August 2017 Mr X was billed for council tax for four of the seven flats. In September 2017, Mr X informed the Council of the names of the various tenants living in the flats. The Council said it had updated its records.
17. In October 2017, Mr X was sent reminder notices for the same four flats. In February 2018, Mr X was sent a summons to appear in court for non-payment of the bills.
18. Mr X complained and said he wanted to speak to someone about the way his account had been handled and what he saw as the incorrect summons. An officer said he could visit the council tax offices and speak with someone.
19. The Council continued to bill Mr X and Mr X continued to complain.
20. On 16 February 2018, the Council says it sent the Valuation Office a report, recommending that the separate flats be listed as one HMO.
21. On 20 March 2018, the Council undertook an inspection. It sent an email to Mr X saying it had found that his flats should be reverted back into an HMO. The email said this would be processed by its valuation team, who would send details to the valuation office who would then delete the separate banding of the various flats and revert back to an HMO. He was told this could take 8-12 weeks to complete.
22. The Council also told Mr X ‘the debt’ was recalled from enforcement agents and a new bill would be issued when the Council had heard from its valuation team. It said while the matter was being resolved, a hold had been placed on the accounts in his name.
23. On 13 April 2018 the Valuation Office produced a report which set out that the property should remain in separate flats. The Council wrote to Mr X again.
24. It said that until it received confirmation from the Valuation Office that his house was listed as an HMO and not separate flats, he remained liable to pay the separate bills.
25. The Council followed this communication up on 16 April 2018 with a further letter saying that, as Mr X was the owner of one of the flats in House 1, he had to pay council tax on it. The Council did not say, in this letter, who was liable for payment of the other flats’ council tax.
26. The Council billed Mr X the following day and also sent him a summons for non-payment of one of the flats’ council tax, although the summons stated that the flat’s liability for council tax was, ‘to be deleted’.
27. Mr X complained. The Council told him to contact the Valuation Office. The next day an officer told him a number of the flats has been deleted from the council tax banding and the Council was waiting for confirmation from the Valuation Office.
28. On 13 August 2018, the Council wrote to Mr X again informing him he could appeal to the Valuation Office. But in the meantime, he was liable for council tax as billed.
29. The Council repeatedly asked the Valuation Office to review its findings.
30. The Council continued to bill Mr X for the separate flats, to issue summons and to obtain liability orders. Bailiffs visited his house. Mr X complained to the Council which again told him to contact the Valuation Office. In the meantime, it told him, he should contact the enforcement agents and arrange payment.
31. In August 2019, Mr X sent the Council tenancy agreements for a number of the separate flats in House 1.
32. The Council says Mr X contacted the Valuation Office on 14 December 2019 to say that works had been carried out to convert the property back into one HMO.
33. On 21 May 2020, the Valuation Office told the Council that Mr X’s property would be re-banded from 1 January 2017 as an HMO.
34. The Council says it sent Mr X adjustment notices to confirm the property had been turned back into one main dwelling. It says it also informed Mr X of this by telephone on 7 July 2020.
35. The Council says Mr X only ever paid council tax for one of the flats which was registered in his name. It received no council tax payments for the other units.

Analysis

36. The Ombudsman cannot comment on matters that have been dealt with by a tribunal or court. I cannot comment on Mr X’s liability for council tax. As I understand it, Mr X’s council tax bills have now been adjusted. If he has queries about the amount billed, he should take this up with the Council (or the valuation office if it involves a further banding query).
37. In March 2018, Mr X was told that a hold was placed on the accounts in his name while the valuation office processed the change in banding that the Council considered appropriate. The valuation office took a long time to reach the conclusion that Mr X’s property was an HMO. The Council heard from the valuation office again in April 2018 and billed Mr X. Mr X might have found this surprising given its communication in March 2018. But the Council had stated that when it heard from the valuation office it would issue a new bill. Mr X might have expected, as did the Council, it appears, that the valuation office would register the property as an HMO. However, this did not happen for some time, and the Council was therefore right to start pursuing Mr X for council tax again.
38. As per my para 3, it is the Valuation Tribunal that deals with appeals against decisions on council tax liability and council tax support or reduction. Mr X was told by the Council to contact the Valuation Tribunal on several occasions.
39. While he might have found the decisions that the Council made about billing to be confusing, he had the opportunity to obtain clarity, if he appealed the Valuation Tribunal’s decision.
40. Mr X was, as the Council claims, rightly liable for the debt to the Council until the issues had been resolved.
41. The Council explained to Mr X that the only way to resolve the issues was to contact the Valuation Office. The Council is correct that Mr X remained liable for council tax in the way he was billed until the Valuation Office decided differently and registered his house as one of multiple occupancy.
42. Mr X would have found the contact from enforcement agents distressing but the Council was entitled to purse a liable debt.

Final decision

43. I have not found the Council at fault and have now completed my investigation.

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Investigator's decision on behalf of the Ombudsman