Summary: Miss X complained the Council closed her council tax account in error which led to a build-up of debt. The Council was at fault for closing the account and for failing to consider using its discretion to reduce Miss X’s council tax bill. The Council has agreed to pay Miss X £150 in recognition of the distress caused and offer Miss X the opportunity to apply for a discretionary reduction to reduce the council tax owed.

The complaint

1. Miss X complained the Council closed her council tax account in error which led to a build-up of debt.
2. Miss X says the matter caused her distress and uncertainty about the amount owed and meant she had a large, unexpected council tax debt.

Back to top

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 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)

Back to top

How I considered this complaint

5. I spoke to Miss X and considered information she provided.
6. I considered information provided by the Council.
7. Miss X and the Council had the opportunity to comment on the draft decision. I considered comments before I made a final decision.

Back to top

What I found

Council Tax

8. The Council Tax (Administration and Enforcement) Regulations 1992 cover both the way councils collect payments of council tax, and the way councils can recover council tax debt.
9. The council tax bill for the year is due on 1 April. A council will usually collect payment through monthly instalments. If any instalment is missed, the council will send the liable person a reminder. If a payment is still not made or a further payment missed, then the entire outstanding balance will be due (that is the full amount for the rest of the year).
10. The amount of council tax due for a property can be ‘reduced to such an extent as the [council]… thinks fit’. Councils have the discretion to reduce the council tax on a property in its area to nil if it decides it is appropriate to do so. (The Local Government Finance Act 1992, section 13A(1)(c))
11. If a person is unhappy with a council’s decision, they can appeal to the Valuation Tribunal. The Valuation Tribunal deals with appeals against decisions on council tax liability and council tax support or reduction.

Council’s discretionary council tax reduction policy

12. The Council’s policy for determining applications for a discretionary reduction in council tax liability in exceptional circumstances sets out how it considers a request for a discount or exemption. It states it will use its powers only in exceptional circumstances on a case-by-case basis. It says some or all of a set of criteria should be met. These include:
• There must be evidence of financial hardship or personal circumstances that justifies a reduction in council tax liability.
• The taxpayer must satisfy the Council that all reasonable steps have been taken to resolve their situation prior to application.
• The customer has made an application for council tax support. The reduction scheme system exists to ensure that those on low incomes receive financial assistance with their council tax.
• All other eligible discounts/reliefs have been awarded.
• The taxpayer does not have access to other assets that could be used to pay council tax.
• Can the situation be resolved by some other legitimate means? If it can, it is unlikely that an award will be made.
• The Council's finances allow for a reduction to be made.
• The situation and reason for the application must be outside of the taxpayer's control.
• The amount outstanding must not be the result of wilful refusal to pay or culpable neglect.
• In the case of an unoccupied property, it must not be the sole or main residence of a taxpayer.
• The situation and reason for the application must be outside the taxpayer’s control.
• The amount outstanding must not be the result of wilful refusal to pay or culpable neglect.

Council’s complaints procedure

13. The Council has a two stage complaints process:
• Stage 1 is responded to within 10 working days (20 working days for complex cases).
• Stage 2 is responded to within 25 working days (65 working days in complex adult or children social care cases).

Background

14. In November 2020, Miss X moved from her old address to her current address in the Council’s area. She wrote to the Council to inform them about the change of circumstances and to close her old council tax account.
15. In August 2021, the Council acted on the email and updated Miss X’s council tax record. However, it closed both her original account, and the account for her new address.
16. 15 months later in November 2022, Miss X contacted the Council to enquire about the government’s energy rebate scheme. She was told that her council tax account had been closed in error in August 2021 and that there was an outstanding balance.
17. Miss X then complained to the Council. She said she did not understand why her account had been closed. She said she wanted to ensure the issue did not reoccur. Miss X requested a repayment plan and for information about when the account was closed.
18. The Council responded within a week and told Miss X:
• The Council had acted on her email from November 2020 in August 2021. This led to both accounts being closed in error.
• The final council tax payment was taken in August 2021.
• The outstanding bill for the tax year 2021-2022 was £588, which Miss X had agreed to pay at a rate of £20 per month.
• The outstanding bill for the tax year 2022-2023 was £895.29 and would be debited at a rate of £179.29.
• The Council offered Miss X the opportunity to discuss the repayment plan.
• The Council apologised for the inconvenience caused by the error.
19. Miss X was dissatisfied with the Council’s response and requested a stage 2 review in December 2022. She told the Council she was uncertain about how much she was repaying and when.
20. In March 2023 the Council responded to Miss X. It told her:
• It was sorry for the delay in its stage 2 response.
• It accepted there were errors in the administration of her council tax account after it was informed of the change of address. It accepted there was an unreasonable delay in processing the correspondence from Miss X reporting the change of address and that it had continued to accept payment from her for council tax at her old address until August 2021.
• It accepted it did not provide a notification to Miss X that her account had closed.
• It did not agree to write off the remaining debt. It said this was because council tax is a primary debt governed by national legislation, and it could not set the legislation aside.
• It apologised for the poor service and the errors that had occurred. It said it would learn from this case and ensure the delays and errors do not reoccur.
21. During our enquiries, Miss X said she remained uncertain about how the Council had organised the repayment plans, what money she owed, or for how long she would pay the outstanding balances.

Analysis

Council tax repayment

22. The Council accepted there was an unreasonable delay in actioning Miss X’s change of address and it closed Miss X’s council tax account in August 2021 in error. It then failed to write to her to inform her that it had closed the account. These errors led to an accrual of council tax debt and caused Miss X distress and uncertainty about the amount owed. Whilst this is the case, the outstanding council tax is still owed by Miss X.
23. The Council agreed to a repayment plan for the money owed and apologised to Miss X for the errors. These are appropriate actions, but they do not go far enough to remedy the injustice caused by the faults.

Council tax support

24. The Council told Miss X it could not reduce the council tax bill according to the law. This is not correct and is fault. The Council has discretion to reduce council tax liability under exceptional circumstances. The Council failed to offer Miss X the opportunity to apply for a discretionary reduction. The fault caused Miss X frustration and uncertainty about whether she may have been entitled to a reduction in the debt. If the Council had acted without fault, considered its discretion, and told Miss X of its decision, she would have had the right to appeal to the Valuation Tribunal.

Complaints procedure

25. The Council sent its stage 2 complaint response 63 working days after Miss X submitted her complaint. This is against the Council’s policy and is fault. The Council has already apologised for the delay, and this is sufficient to remedy any injustice caused for this part of the complaint.

Back to top

Agreed action

26. Within one month of the final decision the Council has agreed to:
• Pay Miss X £150 to acknowledge the uncertainty and frustration it caused when it closed her council tax account in error, which led to a build-up of council tax debt.
• Write to Miss X and provide her with a financial summary and breakdown of the money she owes, how much she has already paid, and how long it will take to repay the debt at the current amount agreed.
• Offer Miss X the opportunity to apply for a discretionary reduction under the Local Government Finance Act 1992 to reduce the council tax owed in consideration of the Council’s error. It should provide its decision to Miss X in writing, with her right of appeal to the Valuation Tribunal if necessary.
• Remind both council tax and complaint officers that the Council should consider using discretion to reduce council tax bills when asked to do so, even if the request does not refer to the relevant legislation.
27. The Council should provide us with evidence it has complied with the above actions.

Back to top

Final decision

28. I have completed my investigation. I found fault and the Council has agreed to take action to remedy the injustice caused.

Back to top

Investigator's decision on behalf of the Ombudsman