Summary: The Council failed to tell Mrs B that it had billed her council tax on a provisional band. It failed to make sure that it billed her correctly within a reasonable time and this caused her to accrue arrears. The Council should not have issued a summons on the account while Mrs B was still disputing it. The Council has apologised, agreed to amend the account, and pay Mrs B £200 in recognition of the distress it caused her. The Council has already altered its practice so this does not recur.

The complaint

1. Mrs B complains about how the Council handled her council tax account. In particular, she says the Council:
• Failed to inform her that it had billed her for council tax on the basis of a provisional band and had failed to ask the Valuation Office Agency (VOA) to assess which band the property should be in.
• Billed her on a lower band than it should have for three years, and once it had discovered its error, demanded backdated council tax of £2,000 without explanation, instructing Mrs B to pay £500pcm.
• Issued court proceedings against her to recover the backdated amount, despite that it was investigating her complaint about this.
2. As a result, Mrs B faced a backdated bill, a court summons, and a demand to pay an instalment arrangement she could not afford. She says she was caused distress and frustration.

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The Ombudsman’s role and powers

3. 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)
4. 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

5. I considered the information provided by Mrs B. I considered the information provided by the Council. I also considered the law relating to council tax. Both parties have had the opportunity to comment on a draft of this statement. The Council clarified some of the information in the statement.

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What I found

The law and process

6. Council tax is calculated on the basis of the value of the taxpayer’s property.
7. The valuation is done by the listing officer at the VOA. Local authorities bill on the basis of the band supplied by the VOA. Councils may become aware of new housing developments, which they should report to the VOA, via their Planning Departments. They should also have Inspectors who visit properties to see if they are complete and can be banded by the VOA.
8. The Local Government Finance Act 1992 does not set any time limit on backdating liability. The Council Tax (Administration and Enforcement) Regulations 1992, say billing should be “as soon as practicable” after the local authority sets the council tax.
9. The Act also allows local authority to reduce council tax liability by the extent it feels fit.

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What happened

10. The Council reported a new housing development to the VOA in December 2015. The Council could not gain access to the site, but it says the site manager told it that the development was completed. However, the properties were not complete for council tax purposes and so the VOA did not provide a valuation.
11. Mrs B moved into her newly built house in March 2016. The Council placed the property in a council tax band provisionally and billed her on that basis. The Council says it would usually tell a taxpayer that it had not had a proper valuation and that the council tax liability could change, but it seems that in this case it did not.
12. In March 2019, the Council reviewed properties that had been billed without a proper valuation. The VOA valued the property and notified the Council at the end of June 2019. The VOA valuation placed Mrs B’s property in a higher council tax band.
13. On 1 July 2019, the Council sent Mrs B a council tax bill with the new current charge of £2,465 and this liability backdated to March 2016 creating a further bill of over £2,000. The Council asked her to pay by monthly instalments of just over £500 per month.
14. Mrs B contacted the Council to say she could not afford these payments and so she had cancelled her direct debit. She had no idea that the Council had placed her in the lower band provisionally or why she now owed so much for previous years. She told the Council she would pay what she could afford, but that she would also appeal the backdated council tax. The Council agreed that she could pay £250 per month.
15. As the Council did not receive payments, it issued the reminder and the summons in the usual way.
16. Mrs B complained to the Council. It explained that it had placed her in a higher band and that it should have told her that the original band was provisional. It said its failure to do so was ‘human error’ and that it would usually notify the tax pay of a provisional banding. The Council apologised for this. It told her that she could take more time than usual to pay the arrears, and it withdrew the summons.
17. However, the Council issued a further summons. Mrs B complained again, and the Council agreed to withdraw the second summons and place a hold on further recovery action. It again apologised and offered to pay Mrs B £200 in recognition of the distress it had caused her. The Council said that there is no provision within the council tax legislation that would allow it to waive the backdated bills.
18. The Council has reviewed its practice and no longer bills council tax on a provisional band. It has also explained that it did consider whether it could waive the council tax arrears but that the council tax scheme already allows for discounts and exemptions and these do not cover this situation.
19. The Council also accepts that it should not have issued the second summons as it did not give Mrs B enough time to contact it to make an affordable payment arrangement.

Analysis

20. The Council has acknowledged that it should have made sure that the VOA valued the property so that it could bill council tax on the correct basis. It has also acknowledged that it should have told Mrs B that it was billing her on a provisional basis, and she may need to pay more. The Council agrees that it should not have issued the second summons on Mrs B’s account.
21. The Council’s shortcomings have caused Mrs B frustration and worry.
22. In response to my investigation, the Council says it has only identified two other residents affected by this error. And so, this is not a systemic problem.

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Agreed action

23. The Council has apologised to Mrs B and has already changed its practice so that it no longer bills council tax on a provisional band.
24. The VOA entered the property onto the Valuation List at a higher band in June 2019 with effect from March 2016. The Council has offered to adjust Mrs B’s account for the period from March 2016 to June 2019 to reflect the difference between the provisional band and the actual band. This means that the higher band will not come into effect until June 2019.. The Council has also offered to pay Mrs B £200 in recognition of the worry and distress caused to her.
25. These are reasonable means to remedy the complaint. The Council should write to the Ombudsman to confirm that it has completed the remedy within six weeks of this decision.

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Final decision

26. I have completed my investigation. There was fault by the Council causing an injustice.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman