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Salford City Council (21 010 556)

Category : Benefits and tax > Council tax

Decision : Upheld

Decision date : 22 May 2022

The Ombudsman's final decision:

Summary: Mr X complained the Council failed to make him liable for council tax in August 2018 instead taking this action in 2021. The delayed action resulted in a large refund being make to Mr X’s lodgers and the Council demanding arrears of over £7,000. The Council was at fault for not acting on information provided it to until three years later. To remedy the injustice caused, the Council will make a payment to Mr X of 50% of the amount charged in that three year period.

The complaint

  1. Mr X complained the Council failed to make him liable for council tax in August 2018 instead taking the action in 2021. The delayed action resulted in a large refund being made to Mr X’s lodgers and the Council demanding arrears of over £7,000 from him even though he had been indirectly paying the council tax.
  2. Mr X says he has lost substantial amounts of money and experienced stress.

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The Ombudsman’s role and powers

  1. 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)
  2. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
  3. 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

  1. As part of the investigation, I have:
    • considered the complaint and the documents provided by the complainant;
    • made enquiries of the Council and considered the comments and documents the Council provided;
    • discussed the issues with the complainant;
    • sent my draft decision to both the Council and the complainant and taken account of their comments in reaching my final decision.

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What I found

Council tax hierarchy of liability

  1. The Local Government Finance Act (Section 6(2)) sets out the hierarchy of liability for each chargeable dwelling. This makes a resident owner liable ahead of resident tenants.

Key facts

  1. Mr X owned a property which he rented out to tenants. In 2017 Mr X moved back into the property with the existing tenants. Mr X says that he notified the Council he had moved back in. The Council has no record of Mr X contacting it directly.
  2. Mr X believed the Council had added him to the council tax account along with the existing tenants and that all other details remained the same. The tenants were paying the council tax by direct debit. Mr X and the tenants agreed this arrangement would continue. However, Mr X was aware that as the owner of the property he was liable for the council tax and so he reduced the tenants’ rent by £130 per month.
  3. In August 2018, a tenant contacted the Council to say the landlord had moved back in. There is a note of this on the Council’s system but the Council failed to take action regarding this information at that time.
  4. In July 2021, the Council contacted Mr X’s father, Mr B, about the property. The Council wrongly believed Mr B owned the property and suspected him of running an unlicensed House in Multiple Occupation (HMO). This prompted Mr X to speak to the Council and the Council corrected its records. It made Mr X responsible for council tax at the address from 1 November 2017 and created a new account in his name.
  5. The Council sent Mr X a bill showing liability from 1 November 2017 and owing more than £7,000. Mr X contacted the Council to query this explaining his position and that he thought he had been paying. The Council, noting the contact in August 2018 that it had failed to act on, adjusted Mr X’s liability to 15 August 2018 and amended the bill accordingly. This resulted in the sum of £1,199.88 being deducted from M’ X's liability.
  6. When the Council made changes to the council tax account in July 2021, this created an overpayment on the account in the names of the tenants. The Council found the previous council tax payments had been made from an account in the name of one of the joint tenants. The Council contacted the tenants who provided authorisation of the account the overpayment should be made into. The Council made the refund into a bank account from which the majority of the council tax payments had been made.
  7. Mr X says that shortly after receiving the council tax refund, the tenants left the property without leaving a forwarding address. He says that he has no way of contacting them to try to recover the money.
  8. Mr X complained to the Council in September 2021. In the stage one response to the complaint, the Council accepted that it should have taken action in August 2018 to make Mr X liable at the address. It apologised for the oversight that occurred. It said that it had correctly refunded the credit to the bank account from which the majority of the payments had been made and that any dispute over the contributions was a private matter between Mr X and his former tenants. It said it was aware a substantial retrospective charge had been created which could cause financial difficulties and provided details of independent advice agencies that may be able to help. It noted Mr X had agreed to pay £140 each month and that it would be continuing recover to seek a liability order, after which it could agree a special arrangement.
  9. Mr X escalated his complaint to stage two of the Council’s complaints procedure. He said that as there was evidence of the Council not acting in 2018 on information received from a tenant then it was also possible his call in 2017 was not properly recorded and actioned. He also said he was shocked that while dealing with the Council about this matter, it was in contact with the tenants and refunding the payments. He said he had explained from the beginning that he was giving money to the tenants to pay the council tax and that the Council’s actions were now forcing him into considerable debt and that he would in effect be paying the council tax twice.
  10. The Council replied saying it found his complaint was correctly handled at stage one of the procedure and a full and detailed response provided. It said there was no basis to change any of the decisions made and this was its final position.


  1. Mr X was liable for the council tax at his property when he moved back in November 2017. This is in accordance with the liability hierarchy. Mr X was required to notify the Council that he had moved back so it could alter the liability from the tenants to Mr X. I have not seen any evidence to show the Council was provided with such information in November 2017. I find no fault by the Council for not changing the council tax liability in November 2017.
  2. However, in August 2018 the Council was given information stating Mr X had moved back into the property. In its response to Mr X’s complaint, it acknowledges there is a file note detailing this information and it accepts it failed to act on this information. The failure to act is fault.
  3. As I have found fault, I have considered how Mr X was affected as a result of this fault. If the Council had acted on the information received in August 2018, it would have sent Mr X a bill in his name for the council tax owed from November 2017. While Mr X would have owed some arrears, this would have been considerably less than the amount he was billed for in July 2021.
  4. The Council’s failure to act for three years, resulted in Mr X making payments via his tenants and not directly to the Council. He now has to pay these three years of council tax charges again. I do acknowledge that Mr X did not do all he could in this time to protect his position. He made assumptions about the billing and payments and did not ensure the bill was changed back into his name. The Council says its records show that in 2009 when a lodger moved into the property, Mr X notified the Council and asked for the lodger to be added as a named occupier. It says this demonstrates awareness of council tax and liability. I therefore take the view that both Mr X and the Council share the responsibility in this case equally.

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Agreed action

  1. To remedy the injustice caused to Mr X as a result of the Council’s fault in this case the Council will, within one month of my final decision, take the following action:
  • Apologise to Mr X;
  • Pay Mr X an amount equivalent to 50% of the council tax charges for the period from 15 August 2018 to 20 August 2021. This payment can be offset against council tax arrears owed by Mr X; and
  • Share the learning from this complaint with council tax staff to ensure similar problems do not occur again.

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Final decision

  1. I have completed my investigation with a finding of fault for the reasons explained in this statement. The Council has agreed to implement the actions I have recommended. These appropriately remedy any injustice caused by fault.

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Investigator's decision on behalf of the Ombudsman

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