Summary: Mr B complained about the way in which the Council responded to his application for council tax exemptions. We found the Council delayed in responding to his queries about two exemptions, then raised his expectations he would receive an exemption and refund, only to change its mind two months later. It exacerbated the fault by failing to inform him of this decision for a further two months. It also left a case with the bailiffs for too long the following year and failed to recognise the impact its failures had on Mr B’s ability to pay the debt. The Council has agreed to write off £65 costs, pay Mr B £500 and review its communication and recording systems for the future.

The complaint

1. Mr B complained that North Lincolnshire Council (the Council) in respect of a property he owned:
• delayed in responding to Mr B’s application for the Class T exemption from council tax
• misled Mr B that it would award him the class T exemption and refund over £9000 to him;
• failed to tell him until January 2021 that he was not entitled to the Class T exemption and refund; and
• failed to notify Mr B that he was in arrears with the council tax for 2021/22, that the Council had issued a summons and liability order for the debt and was referring the matter to the bailiffs.
2. These failures caused him financial difficulties in addition to significant distress and time and trouble.

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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. The Valuation Tribunal deals with appeals against decisions on council tax liability and council tax support or reduction.
5. We cannot investigate a complaint if someone has appealed to a tribunal or a government minister or started court action about the matter. (Local Government Act 1974, section 26(6), as amended)
6. 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)

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How I considered this complaint

7. 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. Mr B and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Council tax exemptions

8. The council tax legislation allows certain types of property to be exempt from the tax in particular circumstances.
9. A Class T exemption can be applied to an unoccupied dwelling which is part of another dwelling, (eg an annex or granny flat) and which may not be let separately from the other dwelling, without a breach of planning control. The same person must be liable to pay the Council Tax for both parts of the property.
10. A Class G exemption can be applied to an unoccupied dwelling where occupation is prohibited by law or by a planning restriction.
11. A person can appeal against a decision not to award an exemption, first to the Council and then to the Valuation Tribunal.

What happened

12. Mr B had owned an empty commercial property for a number of years. It had a flat attached to it for the manager of the business. The manager post had remained vacant for a long period. Mr B was paying full council tax for the flat even though the flat could not be occupied until the manager post was filled.
13. In 2020 the Council increased council tax for unoccupied properties to 300% of the liability. Mr B complained in March 2020. The Council responded saying the property was not exempt from the council tax and as it was unoccupied, he was liable for the premium charge.
14. On 24 April 2020 Mr B rang the Council to say the property was eligible for a Class T exemption. He requested a call-back to discuss this. The request was placed in the work tray of a manager who did not see the request (because it was not the correct process) and did not respond.
15. Mr B then sent an email on 27 April 2020 applying for a Class G exemption. Mr B chased the request several times but received no response.
16. In September 2020 Mr B rang the Council and spoke to the manager, who agreed to award the Class T exemption. The Council did not respond to the request for the Class G exemption. On 29 September 2020 the Council confirmed by email that it would award the Class T exemption and refund over £9,000 to Mr B. Mr B went ahead with preparing a planning application on the strength of this news.
17. In October 2020 Mr B chased the Council for the refund. The Council said it needed to consider the issues further. Mr B chased again in November 2020 but received no response, except a bill for over £2000.
18. Mr B telephoned the Council again in early January 2021 and the Council confirmed it had voided the exemption but did not give a reason. After another telephone call, the Council confirmed it had cancelled the Class T exemption after obtaining legal advice. Mr B said he had not applied for Class T but Class G. The Council confirmed by email that Class G was not applicable and Mr B appealed to the Valuation Tribunal. Mr B said that by this point he had incurred costs of over £12,000 relating to the planning application.
19. Mr B submitted a stage one complaint on 25 January 2021. The Council replied on 8 February 2021. It agreed to remove the premium charge for unoccupied properties back to April 2018 to recognise the difficulty of letting the flat separately as it was part of a larger commercial premises. This reduced the charge by approximately £1800 creating a credit of £542 which was carried forward to the new bill. It said it was taking legal advice on the Class G exemption.
20. It accepted it was at fault for not responding to the emails about the Class G exemption in April 2020. It said these were not linked to the enquiry about the Class T exemption. It had put the account on hold in January 2021, but another reminder had now been sent. It removed this reminder and apologised for the errors.
21. In February 2021 the Council sent a second letter confirming that the flat was not eligible for the Class G exemption.
22. In March 2021 the Council issued a new council tax bill. Mr B said he could not afford to pay because of financial difficulties. He hoped the Valuation Tribunal appeal would be heard promptly.
23. The Council sent a stage two complaint response. It confirmed the stage one response, repeating the apology and explaining it had discretion to remove the premium charge if a property remained unoccupied for more than 2 years.
24. The Council sent a reminder notice for the first instalment of the new year’s bill in April 2021 and issued a summons in May 2021, adding costs of £65. The court granted a liability order in June 2021 adding a further £10 in costs. In September 2021 the Council passed the debt to the bailiffs, who sent a 14-day letter to Mr B including information about the fees they would charge if no payment was made. Mr B said he did not receive any of these documents.
25. In October 2021 the bailiffs sent a notice of enforcement incurring £75 of fees. In December 2021 Mr B paid the outstanding debt minus the fees, directly to the Council. The bailiffs advised that the fees were still payable to them.
26. In January 2022 the bailiffs visited Mr B’s recorded address and incurred a further fee of £235. In February 2022 the bailiffs sent a letter reminding Mr B of the outstanding fees of £65 to the Council and £310 to the bailiffs. Mr B telephoned the Council and said the appeal against the refusal of the Class G exemption was still ongoing. The Council agreed to put a hold on the account for 60 days.
27. In March 2022 Mr B complained to us
28. In April 2022 the bailiffs tried to visit Mr B again, but he was no longer at the correspondence address. In July 2022 the bailiffs agreed to return the case and not pursue the fees.

Analysis

29. The Council delayed in responding to Mr B’s application for a Class T exemption for five months. This was fault. It also delayed in responding to his application for a Class G exemption for over eight months. This was also fault. It caused Mr B significant frustration, distress and inconvenience over a long period of time.
30. The Council was further at fault when it raised Mr B’s expectations that he would receive the Class T exemption and a refund of over £9,000, only to change its mind two months later. It then delayed for a further two months in notifying Mr B of the change in decision. The Council should have properly researched the exemption and obtained legal advice before informing Mr B he was eligible. It should also have sent him a detailed notification letter as soon as it changed its mind on the Class T exemption. Instead, it simply sent a new bill without explanation or apology. This was very poor practice and caused Mr B additional confusion and uncertainty. It also caused Mr B significant financial difficulties as he went ahead with a planning application believing he would receive £9,000. He was also put to much time and trouble over this period, chasing the Council for clear information and a response. The Council eventually used its discretion to remove the premium charge from April 2018, but this resulted in a credit of only £1,800 rather than the expected £9,000.
31. I cannot find fault with the action the Council initially took to recover the next year’s council tax: it sent a reminder, a summons and notification that a liability order had been obtained. I understand Mr B did not receive these, but I have not concluded this was due to fault by the Council as it has sent evidence the documents were sent. When it received no payment, it referred the case to the bailiffs. The bailiffs sent Mr B a letter informing him of the consequences of not paying, including the fees it would charge. There is no evidence Mr B tried to contact the Council to explain his financial difficulties or to say that the Valuation Tribunal hearing had not yet been heard. When he did so in December 2021, the Council put a hold on the account.
32. But once Mr B had paid the arrears in December 2021, I consider the Council should have reviewed the case and considered taking the case back from the bailiffs to recognise that the errors on the case in the preceding year had caused Mr B financial difficulties and affected his ability to pay the following year’s bill.
33. I note the bailiffs have decided not to pursue recovery of their fees and have returned the debt to the Council, but the £65 court costs still remain on the account.

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Agreed action

34. In recognition of the injustice caused to Mr B. I recommended that, within one month of the date of my final decision, the Council:
• writes off the remaining £65 costs; and
• pays Mr B £500.
35. I also recommended that within three months, the Council reviews its communication and recording systems to ensure applications and queries in respect of exemptions and discounts are dealt with promptly and comprehensively and that full explanations are given for its decisions, in addition to sending out revised bills.
36. The Council has agreed to my recommendations.

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Final decision

37. I consider this is a proportionate way of putting right the injustice caused to Mr B and I have completed my investigation on this basis.

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Parts of the complaint that I did not investigate

38. I have not investigated the decisions on the exemptions as Mr B had a right of appeal against these to the Valuation Tribunal, which he used.

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Investigator's decision on behalf of the Ombudsman