Summary: Ms X complained about the Council’s handling of her council tax account. We found no fault on the Council’s part.

The complaint

1. Ms X complains about the Council’s handling of her council tax account. She says the Council is chasing her for outstanding council tax for 2021/2022 when her account has been paid in full and she is owed a refund of £37.99 from 2020/2021. She says the matter has caused her distress and anxiety.

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The Ombudsman’s role and powers

2. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word fault to refer to these. We consider whether there was fault in the way an organisation made its decision. If there was no fault in how the organisation made its decision, we cannot question the outcome. (Local Government Act 1974, section 34(3), 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)

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How I considered this complaint

4. I have considered all the information provided Ms X and by the Council.
5. Ms X 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

Legal and administrative background

Council tax billing and recovery

6. The Local Government Finance Act 1992 gives local authorities the power to levy and collect a dwelling tax. This is known as council tax. The main legislation concerned with the collection and recovery of council tax is the Council Tax (Administration and Enforcement) Regulations 1992 (as amended) (‘the Regulations’).
7. The council tax bill for the year is due on 1 April. A council will usually collect payment through monthly instalments. If the liable person misses any instalment, the council will send them 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).
8. By agreement a council and a taxpayer may make a special payment arrangement outside the normal instalment scheme.
9. If a taxpayer misses a payment, a council must issue at least one reminder notice before issuing a summons for a liability order in the magistrates’ court. They can then seek to recover payment of the sum in the liability order by various means.
10. A liability order gives a council legal powers to take enforcement action to collect the money owed. The council can add the costs of obtaining the order to the person’s debt.

Council tax exemptions, discounts and reduction

11. 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.

Key facts

12. In October 2022 Ms X complained to the Council about its handling of her council tax account. She said:
1. she had received an adjustment notice for the tax year 2020/2021 dated 21 August 2020 which showed her account was in credit by £37.99. She made a refund request in March 2021 but had never received a response;
2. she received a letter from the Council saying she would receive a council tax rebate of up to £150 for the council tax year 2020/2021 but this discount was not visible on her account;
3. she received a bill for £80.19 for the council tax year 2021/2022 and then received a letter advising her that a council tax reduction (CTR) discretionary award of £80 would be added to her account. She said this meant the outstanding balance on her account should be £0.19 and not £80.19;
4. she had received a letter dated 21 September 2022 asking her to make an immediate payment of £126.50 for council tax owing for the tax year 2021/2022 even though she did not owe any council tax and was due a refund.
13. The Council replied to Ms X’s complaint at stage 1 of its complaints procedure. It explained:
1. the £37.99 credit on her bill dated 21 August 2020 for the financial year 2020/2021 was automatically offset against the outstanding balance on her account for the financial year 2019/2020. This resulted in a balance for 2019/2020 of £0.14 which was subsequently cleared. The Council explained that Ms X’s refund request had been reviewed by an officer and closed with the notes “Account not in credit”. However, this information had not been given to Ms X as it should have been. The Council apologised for any frustration or inconvenience caused;
2. the COVID-19 hardship fund for the financial year 2020/2021 was for a maximum of £150 to be credited to eligible council tax accounts. In Ms X’s particular circumstances, the amount payable after CTR was £132.37. This payment was applied to her account in March 2021;
3. as regards the discretionary award of £80 for the financial year 2021/2022, Ms X was awarded £60 from the COVID-19 hardship fund which was credited to her account and resulted in a balance due of £80.19;
4. £126.50 was due in September 2022 for the financial year 2021/2022 but, as at the date of the Council’s response, the outstanding amount had reduced to £89.66 because Ms X’s CTR had since been adjusted.
14. Ms X asked the Council to consider her complaint at stage 2 of its complaints process.
15. The Council sent Ms X its stage 2 response. It found no fault with the way the Revenue team had handled her council tax account.
16. In May 2023 Ms X complained to the Ombudsman.

Analysis

17. I have reviewed the bills and notifications sent to Ms X and a summary of her council tax accounts showing the payments received and deductions made.
18. Ms X’s council tax liability has changed regularly between 2019 and 2023 because of changes in the amount of CTR she was entitled to. This was due to changes in her earnings and benefit entitlements. The Council issued notification letters in respect of each of these financial changes detailing how this affected the amount of council tax due. I appreciate the frequent changes may have been confusing for Ms X, but this was not due to fault by the Council.

a) Refund of £37.99

19. Ms X says that, on 21 August 2020, she received an adjustment notice for the tax year 2020/2021 showing that her account was in credit by £37.99. She made a refund request in March 2021 but never received a response.
20. Ms X’s council tax bill for 2019/2020 was £1131.56. Deducted from this amount was a single person discount of £282.89 and CTR of £704.40 resulting in a balance due of £144.27. Ms X made monthly payments towards the balance. Several CTR adjustments were made during the year. Ms X made a final payment of £59 towards the 2019/2020 account on 19 March 2020. This left an outstanding balance of £41.38.
21. Ms X made a payment of £12 on 8 April 2020 which was credited against the 2019/2020 account. She later confirmed this payment was meant for her 2020/2021 bill, so the Council moved the payment to that account. Ms X made a further payment of £3.25 to the 2019/2020 account on 8 May 2020 resulting in an outstanding balance of £38.13.
22. The Council was the victim of a cyber-attack in October 2020 which caused it to lose access to records dating back some time. When the system was restored in September 2021 after recovery work the credit on Ms X’s 2020/21 account of £24.99 was offset against the 2019/20 bill. A payment of £13 made by Ms X on 4 August 2020 was also automatically credited to the 2019/20 bill after the cyber-attack recovery work. These payments totalling £37.99 resulted in a nil balance on the 2020/21 account and left a remaining balance of £0.14 on the 2019/20 account.
23. The Council subsequently transferred a payment of £0.01 from Ms X’s 2020/21 account and awarded her a discretionary energy rebate of £0.13 clearing the balance on the 2019/2020 account.
24. Having considered all the documentation, I am satisfied that Ms X is not due a refund. The amount of £37.99 to which Ms X refers is made up of the £24.99 transferred from the 2020/21 account and the £13 payment Ms X made on 4 August 2020.
25. The Council says Ms X requested a refund of £37.99 on 1 December 2021. It accepts it did not respond to the request. A council tax officer noted there was no credit to refund but did not inform Ms X of this decision. This was fault and caused Ms X uncertainty. The Council apologised for this in response to Ms X’s complaint. I am satisfied that the Council’s apology represents a satisfactory remedy for the injustice caused.

b) £150 council tax rebate

26. Ms X says she received a letter from the Council saying she would receive a council tax rebate of up to £150 but this discount was not visible on her account.
27. The Council has explained that the COVID-19 hardship fund for the financial year 2020/2021 was for a maximum of £150. In Ms X’s particular circumstances, the amount payable after CTR was £132.27. This payment was applied to her account on 24 March 2021.
28. Having considered the documents provided by the Council, I am satisfied that this payment was indeed credited to Ms X’s account in March 2021. The outstanding balance at that time was £107.28 so this resulted in a credit of £24.99 on the account. This amount was later transferred to Ms X’s 2019/2020 account as explained in paragraph 22 above.

c) Discretionary award of £80

29. Ms X says she received a bill for £80.19 for the council tax year 2021/2022. She then received a letter from the Council advising her that a CTR discretionary award of £80 would be added to her account. She said this meant the outstanding balance on her account would be £0.19 and not £80.19.
30. The Council has explained that Ms X was awarded £60 from the COVID-19 hardship fund for the financial year 2021/2022.
31. Ms X’s council tax bill for the year 2021/22 was £1246.10. Deducted from this amount was a single person discount of £311.53, CTR of £794.38 and a £60 payment from the COVID-19 hardship fund. This resulted in a balance of £80.19. I am therefore satisfied that the correct amount owing was £80.19 not £0.19 as suggested by Ms X.

d) Request for payment of outstanding balance

32. Ms X says she received a letter from the Council dated 21 September 2022 asking her to make an immediate payment of £126.50 for council tax owing for the tax year 2021/2022 even though she did not owe any council tax and was due a refund. She says she subsequently received correspondence from the Council asking her to pay the revised amount of £85.45.
33. As at 21 September the outstanding balance on Ms X’s 2021/2022 account was £126.50. As explained in paragraph 31 above, the original balance due was £80.19, however this increased to £126.50 following a CTR adjustment on 29 September 2022. Further CTR adjustments were made later in September and in October 2022 which reduced the outstanding balance to £112.57. The Council then applied a discretionary energy rebate of £27.12 in November 2022 reducing the balance on the account to £85.45.
34. The Council issued a final reminder notice for £85.45 outstanding for 2021/2022 in May 2023. I am satisfied this amount is correct. So, there are no grounds to criticise the Council for seeking to enforce payment of this sum. The Council has confirmed that it is prepared to offer Ms X a payment arrangement to enable her to repay it in instalments.

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Final decision

35. For the reasons set out above, I do not uphold Ms X’s complaints.
36. I have completed my investigation on the basis that I am satisfied with the Council’s actions.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman