Summary: Ms Y complained the Council failed to set up her sister’s Council Tax account for the correct time periods and failed to apply the relevant exemptions. Ms Y also complained the Council passed the Council Tax arrears to a debt collection agency despite the charges being incorrect. Ms Y says the Council’s actions caused a worsening of her sister’s mental health and stress for both of them. The Ombudsman found fault with the Council. The Council agreed with the Ombudsman’s recommendation to apologise to Ms Y and her sister and to pay Ms Y £300 for the frustration, inconvenience and distress caused. The Council also agreed to provide a guidance document and training to staff.

The complaint

1. Ms Y complained the Council failed to set up her sister’s, Ms X’s, Council Tax account for the correct time periods and failed to apply the relevant exemptions for her mental health.
2. Ms Y also complained the Council passed the Council Tax arrears to a debt collection agency despite the charges being incorrect.
3. Ms Y says the Council delayed or failed to respond to contacts.
4. Ms Y says the Council’s actions caused a worsening of Ms X’s mental health and stress for both of them.

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The Ombudsman’s role and powers

5. 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)
6. 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

7. I have considered all the information Ms Y provided. I have also asked the Council questions and requested information, and in turn have considered the Council’s response.
8. Ms Y and the Council had opportunity to comment on the draft decision. I have now made my final decision.

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What I found

Council Tax

9. Council tax is a combination a tax on the value of property and a tax on individuals living in the property.
10. The occupier or owner is liable to pay Council Tax. An occupier with a freehold or leasehold interest in the property is the primary person responsible for Council Tax. This is followed by an occupier with no interest and then ultimately the owner of the property. (Local Government Finance Act 1992, section 6(2))
11. If a person disputes who is liable for Council Tax at a property, they can appeal this in writing to the Council. If the Council rejects a person’s appeal, the person can appeal to the Valuation Tribunal within two months of the Council’s rejection.
12. A council has discretion to apply reductions and exemptions for Council Tax. A council will detail what reductions and exemptions it applies. Councils are under a duty to “take reasonable steps to ascertain” whether any discounts or exemptions should apply to taxpayers. (Council Tax (Administration and Enforcement) Regulations 1992 (regulation 14))

Local Council Tax Reduction policy

13. The Council has a scheme which says a person will pay no Council Tax if they are in receipt of:
• Income Support;
• Income-Based Jobseeker’s Allowance; or
• Income-Related Employment Support Allowance (ESA).
14. The reduction of Council Tax to nothing in these circumstances is applicable from the date of the award of the above benefits.
15. A person can apply for a reduction under the Council’s scheme either in writing, through email or (where the Council provides a phone number) over the telephone. The Council must make a decision on an application within 14 days of receipt.
16. Where a person makes an application by email, they must provide all information the authority requires. If a person does not provide all information, the Council will consider the application “defective”. The Council should give an applicant opportunity to correct the defect.
17. The Council’s policy says a person must provide it with documents and evidence related to any application for a reduction which “may reasonably be required” to decide a person’s entitlement.

Council policy on corporate debt recovery

18. This policy sets out the Council’s policies on billing, collection and recovery of money owed to the Council, including through Council Tax.
19. The Council says it will ensure debt demands are accurate and it has deducted any appropriate benefits or reductions from the amounts outstanding. The Council says it will maximise entitlement to benefits, reductions and discounts for a person.
20. The policy says the Council will keep accurate records of any information about reductions and benefits. For Council Tax, the Council will allow people 21 days to provide information it has requested.
21. The Council’s policy also says it will provide advice and information to people at every stage of the recovery process.

Council complaints procedure (November 2020)

22. The Council has a two-stage complaints procedure.
23. When a person complains to the Council it will consider the complaint at Stage 1 first. The Council will acknowledge receipt of a complaint within three working days and provide a response within 10 working days.
24. If a person is unhappy with the Council’s Stage 1 response they can request escalation to Stage 2. Stage 2 is the Council’s final complaint stage.
25. The Council will decide within three working days if it will accept the Stage 2 complaint. The Council will provide its Stage 2 complaint response in 20 working days.

What happened

Situation before 18 October 2018

26. Ms X’s mother placed her property into the ownership of Ms Y, Ms Z and a third child in 2011. Ms Y and Ms Z are the sisters of Ms X.
27. Ms X moved into her mother’s property in April 2018 as an informal carer for her mother.
28. Ms X’s mother continued to pay Council Tax from April 2018 solely in her name and the Council applied a single person discount to her Council Tax account. I will refer to this Council Tax account as Account 1.
29. Ms X’s mother passed away on 18 October 2018. Ms X continued to live in the property.

Events from 18 October 2018

30. The registrars office told the Council on 30 October 2018 Ms X’s mother had passed away.
31. The Council sent a letter to Ms X’s mother’s address in the name of the beneficiaries asking for details about occupation of the property for Council Tax purposes on 1 November 2018.
32. The Council sent further letters to the property on 25 January 2019 and 23 April 2019 chasing for information. None of Ms X, Ms Y or Ms Z responded to the Council’s letters.
33. The Council checked the land registry on 24 April 2019 and found that Ms Y, Ms Z and a third person had been owners of the property since July 2011.
34. The Council wrote to Ms Z on 25 July 2019 to ask if the property was still rented. Ms Z told the Council she and two other members of her family took legal ownership of the property but their mother remained the beneficial owner till her death on 18 October 2018. Ms Z told the Council they were getting probate and would be deciding what to do with the property.
35. The Council opened a Council Tax account, Account 2, on 15 August 2019. The Council opened this account in the name of the legal owners, including Ms Y and Ms Z, with responsibility for Council Tax starting on 18 October 2018. The Council applied a discount for the property being empty and unfurnished. The Council closed Account 1 showing a zero-balance owed up to 18 October 2018. The Council wrote to Ms Z to advise of the changes to the accounts.
36. Ms Z wrote to the Council on 4 September 2019. Ms Z disputed responsibility for the Council Tax account. She said transferring the owners on the land registry for the property was a result of her mother’s lasting power of attorney and did not convey legal ownership. Ms Z told the Council Ms X was living at the property and was doing so before their mother’s death. Ms Z told the Council Ms X was unemployed and was on benefits.
37. The Council responded to Ms Z on 11 September 2019. The Council asked Ms Z for evidence that Ms X was living at the property as they found the property empty during a site visit on June 2019. The Council said it would keep the Council Tax account in the name of the those registered on the land registry until it received evidence of Ms X’s residency.
38. Ms X submitted a Council Tax moving in form using the Council’s online web-form on 25 October 2019. Ms X said she moved into the property on 1 April 2019 on this form. Ms X also applied for a single person discount. Ms X did not provide details of her unemployment or benefits.
39. The Council sent Ms Z a court summons letter for non-payment of the Council Tax on Account 2 and Account 3 on 20 November 2019.
40. Ms Y sent the Council evidence of Ms X’s residence at the property for after April 2019 on 26 November 2019. The Council set up a Council Tax account, Account 3, for Ms X from 1 April 2019.
41. On 3 December 2019, the Council revised the billing on Account 2 for 18 October 2018 to 31 March 2019 and sent a bill for Account 3 for charges from 1 April 2019.
42. Ms Z attended the court date on 10 December 2019. Ms Z confirmed Ms X had been living at the property since April 2018 and was exempt from Council Tax because she was on benefits. The Council advised it will look into the matter and removed recovery costs from Account 2.
43. Ms Z asked the Council what information it needed to provide to prove Ms X’s residency at the property since April 2018. The Council responded on 18 December 2019 to advise it considered the property empty and unfurnished and wanted utility bills shows Ms X’s occupation of the property.
44. The Council sent a reminder for the outstanding charges on Account 3 on 9 January 2020. The Council chased Ms Z for utility bills showing Ms X’s occupation from 18 October 2018 to 1 April 2019.
45. Ms Z sent the Council estimated utility bills for the time periods 10 August 2018 to 10 November 2018 and 10 February 2019 to 9 May 2019 on 7 February 2020.
46. The Council sent a court summons letter to Ms Z for non-payment of the Council Tax on Account 3 on 20 February 2020.
47. On 25 February 2020, the Council advised Ms Z the utility bills provided did not show occupation as the billing was estimated. The Council said it had received information the property only became reoccupied on 1 April 2019.
48. Ms Z asked the Council what evidence it had the property was unoccupied from 18 October 2018 to 1 April 2019 on 26 February 2020. Ms Z chased the Council for a response on 4 March 2020 and attended the Council on 6 March 2020 with Ms Y and Ms X. Ms X told the Council she was not aware she needed to make a claim for Council Tax reduction. Ms X signed forms to allow Ms Z and Ms Y to act on her behalf for Account 3.
49. Ms Z chased the Council for a response to her 26 February 2020 email again on 9 March 2020.
50. Ms X applied for Council Tax reduction on Account 3 for her housing benefits on 24 March 2020. The Council awarded a Council Tax reduction to Ms X’s account from 24 March 2020. The Council advised it could only award this reduction from the date of application. The Council revised the billing on Account 3 to reduce the charges owed to £990.77 for the period 1 April 2019 to 24 March 2020.
51. Ms Z contacted the Council on 4 June 2020 to clarify Ms X’s dates of residency. Ms Z confirmed Ms X lived at the property since April 2018. Ms Z provided the Council with the following information in Ms X’s name relating to the property:
• A TV license from 2020.
• Solicitors letters dated 14 November 2019.
• A private medical letter dated August 2018.
• Letters from the NHS dated June 2018, July 2018 and September 2019.
52. Ms Z chased the Council for a response on 14 July 2020, 27 July 2020 and 11 August 2020.
53. The Council told Ms Z the information provided was insufficient on 20 August 2020. The Council asked Ms Z to provide car insurance documents or bank statements for Ms X since April 2018.
54. Ms Z responded to the Council on 10 November 2020. Ms Z said Ms X does not have a car and Ms X’s bank account does not issue bank statements. Ms Z asked what other information she could provide. Ms Z chased the Council for a response on 17 November 2020 and 23 November 2020.
55. The Council contacted Ms Z on 23 November 2020. Ms Z told the Council Ms X suffered from mental health issues since 2011 and asked for backdating of Council Tax reduction. The Council sent a Severe Mental Impairment form to Ms X on this date to enable backdated Council Tax reduction.
56. Ms Y made a stage 1 complaint on 23 November 2020. Ms Z said she had been trying to resolve the Council Tax issues for Ms X’s account for more than 12 months. Ms X said the Council was not helping to resolve the issues or responding to contacts.
57. The Council provided its Stage 1 response on 1 December 2020. The Council said:
• Ms X completed an online web-form confirming she moved into the property on 1 April 2019. It used this information to set up her account.
• Ms Z should provide evidence of occupation by Ms X for before this date to enable the Council to change its records. The Council suggested documents such as home insurance, bank statements of utility bills showing usage.
• It was waiting on return of Severe Mental Impairment forms to process Ms X’s Council Tax reduction.
58. Ms Z returned the completed Severe Mental Impairment forms to the Council on 31 December 2020. Ms Z chased the Council on 6 January 2021 and 14 January 2021 for a response.
59. The Council applied an exemption to Account 3 reducing the charges to £431.57. The Council did not apply the exemption from 1 April 2019 to 11 April 2020. The Council sent a revised bill to Ms X on 15 January 2021.
60. Ms Z disputed the revised bill with the Council on 9 February 2021. Ms Z said the Council should have backdated the exemption for all Ms X’s occupation. The Council told Ms Z it needed evidence of Ms X’s qualifying benefits before 11 April 2020.
61. Ms Z said she would contact the Department for Work and Pensions to get evidence of Ms X’s benefits before April 2020. Ms Y also requested escalation to Stage 2 of the complaints process on 26 February 2021.
62. Ms Z provided the Council with benefits letter showing Ms X’s Employment and Supports Allowance going back to 2013 on 9 March 2021.
63. The Council closed Account 2. It then amended the start date for Account 3 to 18 October 2018 and applied the relevant exemption to Account 3 in line with Ms X’s benefits, removing the full charges from the account. The Council confirmed this with Ms Z on 22 March 2021 before re-billing the accounts on 25 March 2021. The Council re-ran the full billing on Ms X’s account from 18 October 2018 to 31 March 2022 as a nil-bill on 22 April 2021.
64. The Council sent Ms Y its Stage 2 response on 27 May 2021. The Council said:
• It apologised for the delayed response to Ms Y’s Stage 2 complaint.
• It was not made aware of Ms X’s residence before November 2019.
• Ms Z provided the Severe Mental Impairment forms on 31 December 2020 but this only justified application of the reduction to 11 April 2020. Following Ms Z providing it with evidence of benefits going back to 2013, the Council applied the reduction to the full account.
• It sent recovery letters correctly based on the information it held.
• No balance was owed for Council Tax for the property following its re-billing.

Analysis

Dates of occupancy

65. Ms Y complained the Council failed to set up accounts to the correct dates for Ms X’s occupancy.
66. The Council said it set up accounts based on information it had available and corrected dates of occupancy when Ms X, Ms Z and Ms Y provided information to it.
67. The Council knew Ms X’s mother lived in the property in April 2018 and held a live Council Tax account for her with a single person discount. None of Ms X, Ms Y or Ms Z told the Council Ms X moved into the property in April 2018.
68. When Ms X’s mother died in October 2018, the Council sent letters to the property address to seek information about whom was responsible for Council Tax. Since none of Ms X, Ms Y or Ms Z responded, the Council checked the land registry and put the Council Tax account, Account 2, in the name of the legal owners.
69. When the Council has no evidence of an occupier for a property, the Council should hold the legal owners responsible. I do not find fault with the Council for setting up Account 2 based on the information it held.
70. The first time Ms Z confirmed to the Council that Ms X was living in the property was 4 September 2019. The Council was entitled to ask Ms Z to provide evidence Ms X lived in the property. I do not find fault with the Council.
71. Ms X submitted an online form to the Council confirming she moved into the property on 1 April 2019. Ms Y also provided evidence of Ms X’s occupation showing Ms X lived in the property at least after 1 April 2019. On receiving this information the Council set up Account 3 from 1 April 2019 but kept Account 2 open from 18 October 2018 to 31 March 2019. The Council has acted in line with the information provided to it. I do not find fault.
72. The Council was entitled to ask for evidence of Ms X’s occupation before 1 April 2019. The utility bills did not show occupation as the billing was estimated. I again do not find fault with the Council’s for considering this information insufficient.
73. Ms Z asked the Council to clarify what information it held on 26 February 2020. The Council failed to address this despite chasers from Ms Z. Ms Z provided, in June 2020, evidence of Ms X’s occupation in the property since June 2018.
74. The Council was entitled to decide the information Ms Z provided was insufficient, as it did in August 2020. However, Ms Z (or Ms X or Ms Y) has not provided any extra information since August 2020 proving Ms X’s occupation before 1 April 2019. Despite this, the Council decided it had enough information in March 2021 to amend the dates on Ms X’s Council Tax account to start on 18 October 2018. Given the information the Council held was the same in June 2020 and March 2021, it could have reached the decision about Ms X’s occupation in June 2020. This is fault.
75. The Council’s fault, in not responding to Ms Z’s contacts in February 2020 and March 2020 and inconsistent decisions about the sufficiency of evidence, caused 13 months of delays in it amending the dates for Accounts 2 and 3. This delay caused Ms Z, Ms Y and Ms X frustration, distress and inconvenience.
76. The Council has now closed Account 2 to a nil-balance and amended Account 3 to start from 18 October 2018. I do not find fault with the way the Council has now set up the Council Tax accounts.

Council Tax exemptions

77. Ms Y complained the Council failed to apply the correct exemptions to Ms X’s Council Tax account.
78. The Council says it applied the relevant exemptions when Ms X provided information to it to show entitlement.
79. The Council’s policy says a person is exempt from Council Tax if they are in receipt of Employment Support Allowance, Jobseekers Allowance or Income Support. Ms X has received Employment Support Allowance since 2013 so was entitled to Council Tax Exemption from the start of her account on 18 October 2018.
80. Ms X did not apply for an exemption from Council. The Council would not have been unaware of Ms X’s entitlement when it set up Account 3. None of Ms X, Ms Y or Ms Z provided evidence to show Ms X was entitled to this exemption until March 2021. When the Council received this information, it applied the exemption and re-billed Ms X’s account to show a nil-bill. I do not find fault with the Council.
81. However, a council has a responsibility to take “reasonable steps” to ascertain whether any discount or exemptions should apply.
82. Ms Z confirmed to the Council on 4 September 2019 that Ms X was unemployed and in receipt of benefits. Ms X confirmed to the Council in her online application to set up her Council Tax account that she was the only person living in the property.
83. When the Council set up Ms X’s Council Tax account in November 2019 it was aware that Ms X was the only occupant of the property. The Council had also been told she was unemployed and on benefits. Despite this, the Council made no attempts to ascertain whether Ms X was entitled to any discount or exemption. This is fault.
84. When Ms X, Ms Y and Ms Z met with the Council on 6 March 2020, the Council had an opportunity to explore what exemptions and discounts Ms X was entitled to. The Council provided advice about Ms X’s housing benefits but did not explore the full options. This is again fault.
85. It was only because Ms Z continued to liaise with the Council the Council told her about the Severe Mental Impairment form on 23 November 2020. I am not satisfied the Council took “reasonable steps” to ascertain what exemption Ms X was entitled to until 23 November 2020. This is fault.
86. This fault by the Council caused a delay of 12 months in Ms Z being in a position to apply for the relevant exemption for Ms X’s account. This delay caused extra frustration and inconvenience for Ms Z.
87. It took Ms Z from 23 November 2020 until March 2021 to provide the relevant information to the Council to provide Ms X’s Employment Support Allowance since 2013. The Council acted in line with its policy, applied exemptions for the relevant periods and allowed Ms Z opportunity to provide further documents. I do not find fault with the Council for this delay.
88. The Council has now applied the correct exemption to Ms X’s account since 18 October 2018. I do not find fault with the Council for the current state of the account.

Debt collection and recovery

89. Ms Y complained the Council passed the Council Tax arrears to a debt collection agency despite the charges being incorrect.
90. A council is entitled to recover money owed to it such as an outstanding Council Tax balance. A council can use recovery methods such as reminder letters and court summons to seek repayment of a balance owed.
91. At each point the Council has started recovery activity there was an outstanding balance owed to it on either Account 2 or Account 3. I do not find the Council at fault for using recovery action to seek repayment of a balance.
92. The Council’s corporate debt collection policy says it should maximise a person’s entitlements to reductions and discounts and it should provide advice and information to people at every stage of its recovery process. As I have detailed within the sections “Dates of occupancy” and “Council Tax exemptions” the Council failed to make “reasonable steps” to ascertain Ms X’s exemptions. The Council also failed to provide Ms X, Ms Y and Ms Z with information and advice. The Council has not followed its debt collection and recovery policy. This is fault.
93. Had the Council provided information and advice to Ms X, Ms Y and Ms Z at the first stage of recovery action, the Council could have informed them about Ms X’s exemption to Council Tax as early as November 2019. This fault caused Ms X, Ms Y and Ms Z to experience distress through unnecessary collection activity.
94. The Council has now removed any collections charges from Account 2 and Account 3. There is no injustice about extra charges.

Complaint handling

95. Ms Y says the Council delayed or failed to respond to contacts.
96. I have already addressed, above, delays relating to Ms X, Ms Y and Ms Z’s contacts with the Council outside the Council’s formal complaint process. I will not address these again.
97. The Council has accepted it delayed in handling Ms Y’s complaint and did not adhere to its complaint procedures.
98. Ms Y made her Stage 1 complaint on 23 November 2020. The Council provided its response on 1 December 2020. This is within the Council’s complaint timescales. I do not find fault.
99. Ms Y requested escalation to Stage 2 of the complaint process on 26 February 2021. The Council took until 27 May 2021 to provide a response at Stage 2, this is 64 working days and outside the Council’s complaint timescales. This is fault.

While this fault, the Council resolved the issues surrounding Ms Y’s complaint on 22 March 2021 and confirmed this with Ms Z. The Council did this by amending the dates of the Council Tax accounts and applying the relevant exemption to Account 3. I do not consider this fault has caused an added injustice to Ms X, Ms Y or Ms Z.

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Agreed action

100. Within one month of the Ombudsman’s final decision the Council will:
• Provide Ms X, Ms Y and Ms Z with an apology and pay Ms X £300 for the frustration, inconvenience and distress caused. This relates to the Council’s delays in setting up Ms X’s Council Tax account for the correct dates and with the correct exemptions and the associated recovery activity.
101. Within three months of the Ombudsman’s final decision the Council will:
• Provide a guidance document and training to staff about “reasonable steps” they should take to ascertain whether any discounts or exemptions should apply to a taxpayer's Council Tax accounts.

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Final decision

102. There was fault by the Council as the Council has agreed to my recommendations I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman