Summary: Mr X complains about the Council pursuing council tax for two properties for which his company owns the freehold. The Council has agreed to increase its remedy.

The complaint

1. Mr X complains the Council wrongly made his company liable for council tax for two properties his company owns. He says the Council had information but failed to consider it, issuing a summons for both properties. It also failed to address his complaints and this caused him stress and time and trouble.

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The Ombudsman’s role and powers

2. 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)
3. If we are satisfied with an organisation’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).
4. We cannot investigate a complaint about the start of court action or what happened in court. (Local Government Act 1974, Schedule 5/5A, paragraph 1/3, as amended).

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How I considered this complaint

5. I have discussed the complaint with Mr X and considered the complaint and the copy correspondence he provided. I have made enquiries of the Council and considered the documents the Council provided. Mr X and the Council had an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

6. Mr X is director of a property investment company which owns a number of properties. The Council pursued council tax for two properties.

H Road

7. In March 2021 the Council made Mr X’s company liable for council tax for H Road, when it received information from a former tenant. The Council sent the company a council tax bill for 2020/21.
8. As the Council received no payments it sent a reminder, and then a summons on 5 May 2021. The Council obtained a liability order in court on 27 May 2021.
9. The Council also sent the company a bill for the new council tax year 2021/22 on 1 April 2021. As it received no response it sent a reminder on 4 May 2021.
10. Mr X returned the reminder to the Council on 21 May 2021. He said the Council should not charge the company because the property was on a long lease of 35 years.
11. The Council did not respond to Mr X’s letter because it says it had a backlog of correspondence following Covid lockdowns.
12. On 16 June 2021 the Council sent a summons to the company for the 2021/22 council tax year.
13. Mr X wrote to the Council again on 22 June 2022.
14. On 13 July the Council replied to Mr X’s letter of 21 May, apologising for its delay. It noted he said the property was now leased to Mr A. The Council said it had checked the Land Registry which showed Mr X’s company was the freeholder. However, it did not show a leaseholder. The Council asked Mr X for a copy of the lease and said it had put recovery action on hold for 28 days.
15. On 22 July the Council passed the account for the council tax liability order to its enforcement agent. The agent sent Mr X’s company a Notice of Enforcement adding £75 to the account.
16. On 27 July 2021 Mr X wrote to the Council regarding the Notice of Enforcement he had received from the agent. He said the Council had promised to put a hold on the account. He said the Council action was causing him distress and he asked for financial compensation. Mr X also sent a copy of the lease. However, the Council says it did not receive Mr X’s letter or a copy of the lease.
17. On 8 September 2021 Mr X wrote to the Council again to say the enforcement agent had visited him at home. He said the agent had copied the lease and he had sent this to the Council on 27 July. Mr X requested an apology and compensation.
18. On 18 November 2011 Mr X wrote to the enforcement agent when he received a further letter from it requesting payment. He said he had provided evidence to the agent and the Council that the company had let the property on a long lease.
19. Mr X complained to the Ombudsman about the Council and the enforcement agent’s lack of response to his letters. We passed the complaint to the Council as it had not considered the complaint though its complaint procedure. Following further correspondence from Mr X to the Council and the agent, the Council replied on 20 April 2022. It said it had followed the correct process because Mr X’s company was liable and had not paid. It also said that the hold on recovery had expired, and it had continued recovery action because it had not received the copy of the lease he said he had sent.
20. Mr X complained further on 26 April 2022 that the Council stated it would place a 28 day hold on the account, but just 9 days later it had referred the account to its agents. He said the Council had not replied about this in its complaint response. In his view the Council had received the lease, because it referred to the new leaseholder’s name. He also said that the agent had photographed the lease and should have discussed this with the Council. He sent a further copy of the lease. He said the Council had ignored his correspondence for seven months.
21. The Council replied on 19 May 2022. It explained it had not found the letter Mr X said he sent in July 2021 or the lease. This was the reason why it had not updated the liability. The Council said it had now deleted the council tax account and removed all the costs.
22. Mr X complained at stage two of the Council’s procedure in May 2022 because he remained dissatisfied with the Council’s responses.
23. It appears the Council registered Mr X’s complaint in May 2022 but did not respond until October 2022. The Council has explained that this was due to officer sickness, and it did not have the resources to assign the complaint to another officer.
24. In its response of 14 October 2022, the Council apologised for its delays. It accepted that it should not have passed the council tax account to its agent on 22 July 2021 because it had advised on 13 July 2021 that it would place a hold on the account for 28 days. This resulted in the agent visiting Mr X. However, it did not uphold Mr X’s complaint that the Council had received a copy of the lease but not acted on it. The Council said it had received a copy of the lease on 26 April 2022 and had corrected the liability and removed the costs. The Council asked Mr X to provide receipts for any letter it had signed for but which it had not responded to. The Council offered Mr X £75 because it accepted it was wrong to pursue recovery action when it had promised to put a hold on the account.

Analysis

25. The Council did not respond to Mr X’s letter of 21 May 2021, and sent a summons on 16 June 2021. There was avoidable delay here and this is fault. Mr X was caused anxiety.
26. It appears that the Council pursued recovery action regarding two liability orders on Mr X’s company’s account. The Council said it would hold recovery for 28 days but did not do so. The Council’s agent visited Mr X at least once and sent a number of letters to him. This is fault. Mr X was caused distress. The Council also said in its stage one response that the hold had expired because Mr X did not respond. However, this was incorrect because 28 days had not passed before the Council lifted the hold on recovery and the agent took action. This is fault.
27. The enforcement agent appears to have received information from Mr X regarding the lease but did not pass it on. This is fault. If the agent had passed the information on the Council could potentially have ended the incorrect liability earlier, avoiding the prolonged correspondence. I have recommended a service improvement.
28. There was delay by the Council in responding to Mr X’s correspondence about the account. It appears the Council did not receive all the letters. The Council has asked Mr X for evidence of receipts so that it can look into this further. I suggest Mr X provides this evidence. The Council registered Mr X’s stage two complaint in late May 2022, but did not respond until October 2022. This is a significant delay and is fault. I have recommended a remedy.

D Road

29. Mr X’s company owned the freehold of D Road which was registered as a commercial property subject to business rates. Part of the property was also a domestic dwelling and subject to council tax.
30. In late 2020 a tenant who occupied the dwelling advised the Council he was vacating and stated a company was the landlord. The Council says it carried out a check with the Land Registry. The Council noted Mr X’s company was the freeholder and it made it liable for council tax between August 2020 and January 2021.
31. The Council sent Mr X’s company a council tax bill. When he did not make payment the Council issued a summons in May 2021 and obtained a liability order.
32. Mr X says he wrote to the Council questioning the liability on 13 and 21 May 2021. However, the Council says it did not receive these letters.
33. In July 2021 the Council passed the liability order for the council tax account to its enforcement agent. They sent Mr X’s company a Notice of Enforcement adding a charge of £75.
34. Mr X wrote to the Council on 12 July 2021 regarding the Notice of Enforcement. He said the Council had not replied to his letters of 13 and 21 May. He asked for the evidence the Council had that his company was liable for council tax. He also asked which premises the Council was referring to.
35. The Council replied on 20 July 2021. It said it had not received the letters of 13 and 21 May Mr X said he sent. It explained a former owner had advised that Mr X’s company was the owner of the property. When a property was awaiting tenants, the owner was liable for council tax. As the company had not made payments it had started recovery action passing the liability order to its agents on 1 July 2021.
36. On 27 July Mr X wrote to the Council that it had referred in its title to the address of the commercial unit. However, it was seeking council tax. Mr X asked why the Council sought council tax for a commercial property. He said the account was in dispute and so the Council should not expect him to pay the enforcement agent. The Council says it did not receive this letter.
37. On 8 September 2021 Mr X wrote to the Council that it had not replied to his letter of 27 July 2021. Mr X complained to the Council and the Ombudsman in November 2021. He also wrote to the Council in December 2021. He said it was not clear which property the Council was seeking payment of council tax. Both properties were on long leases.
38. In April 2022 the Council replied to Mr X at stage one of its complaint procedure. It said it had received information from a former owner, and had made Mr X’s company liable for council tax. The Council asked Mr X for a copy of Mr A’s lease or tenancy. It said it had put the account on hold for 21 days.
39. Mr X complained further in April 2022 that the Council had wrongly referred to his tenant Mr A, who was the tenant of H Road. Mr X asked again why the Council was apparently asking for council tax for a commercial property. He said he enclosed a copy of the leases for the two properties that made up D Road.
40. The Council replied in May 2022. It apologised for wrongly referring to Mr A. It explained it had two properties at D Road registered for council tax. The Council asked for a copy of the lease for one of the properties at D Road.
41. The Council registered Mr X’s complaint at stage two of its procedure in May 2022. However, it did not respond until October 2022, in the letter I refer to in paragraph 24.
42. The Council confirmed one of the addresses it referred to as D Road was subject to business rates. It apologised for the confusion caused. With regard to the property for which it had made Mr X’s company liable, the Council had checked the Land Registry. It had noted the freeholder was Mr X’s company but it had missed that a leaseholder was also present. The Council upheld Mr X’s complaint that it should not have made the company liable for council tax. It said it had now deleted the account. It also said it would recommend refresher training for all council tax officers regarding identifying information on Land Registry searches. The Council also offered Mr X £150 in view of its mistake in making the company liable and the delay in resolving the matter.

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Agreed action

H Road

43. The Council has offered a financial remedy of £75. I recommended the Council increases this to £150 to take account of its delay in responding, his time and trouble and the distress caused to Mr X by the enforcement agent’s visit. The Council should make payment within one month.
44. I recommended the Council reminds its enforcement agents that they should pass information they receive on to the Council for its consideration.

D Road

45. The Council has offered Mr X £150 in view of its error in making Mr X’s company liable for council tax and for its delays in resolving the matter. I recommended the Council increases this to £250 in view of the distress caused, its significant delays and his time and trouble.
46. The Council should implement the proposed remedies within one month of my decision and provide us with evidence it has complied with the above actions.

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Final decision

47. The Council has agreed the further remedies I proposed. I have completed my investigation and closed the complaint.

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Investigator's decision on behalf of the Ombudsman