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Kirklees Metropolitan Borough Council (20 009 274)

Category : Benefits and tax > COVID-19

Decision : Not upheld

Decision date : 14 Jun 2021

The Ombudsman's final decision:

Summary: Mr X complained the Council wrongly refused COVID-19 related business grants for his two businesses. As one business is a dental practice it was not eligible for the Retail, Hospitality and Leisure Grant and so the refusal was not fault. Mr X did not provide evidence requested regarding the retail use of his other business and there is no fault in the Council not reviewing its decision.

The complaint

  1. Mr X complained the Council wrongly refused COVID-19 related business grants for his two businesses.
  2. Mr X says his businesses are struggling financially because of the refusal of the grants.

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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. 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

Business grants

  1. In response to the COVID-19 pandemic the Government introduced two grant schemes to support businesses. The Department for Business, Energy and Industrial Strategy published guidance for councils on how to apply these: “Grant Funding Schemes” (March 2020).
  2. Businesses which, on 11 March 2020, received Small Business Rates Relief (“SBRR”) were eligible for a Small Business Grant of £10,000.
  3. Businesses which, on 11 March 2020, would have received the Expanded Retail Discount, were eligible for a Retail, Hospitality and Leisure Grant (“RHL Grant”) of up to £25,000.
  4. The guidance states that any changes to the ratings list after 11 March 2020 should be ignored for the purposes of eligibility. In cases where it was factually clear to the local authority the rating list was inaccurate on that date, it may withhold the grant and/or award the grant based on their view of who would have been entitled to the grant had the list been accurate. This is entirely at the discretion of the local authority.

Expanded Retail Discount (the “Discount”)

  1. In April 2020 MHCLG published “Business Rates, Expanded Retail Discount 2020/21: Coronavirus Response Local Authority Guidance”.
  2. The Discount was available to premises wholly or mainly used for retail, hospitality or leisure.
  3. The guidance listed the types of businesses that were eligible. However, it was for councils to decide if a business was broadly similar in nature to those listed and so eligible.
  4. The guidance also listed the types of businesses not eligible. This included premises used for:
    • Financial services e.g banks
    • Medical services e.g dentists
    • Professional services e.g solicitors
    • Post office sorting offices and;
    • Premises not reasonably accessible to visiting members of the public.

Key facts

  1. Mr X is a dentist and has been liable for business rates at his dental surgery since May 2011. The rateable value for the premises in March 2020 was £18,500.
  2. On 16 April 2020, Mr X submitted a grant application stating the premises were used for dentistry. Mr X also stated on the form that he was in receipt of small business rate relief (SBRR). Mr X was not n receipt of SBRR as this is only payable to businesses with a rateable value of under £15,000.
  3. The Council wrote to Mr X on 22 April refusing the grant application. It explained Mr X was ineligible for a RHL Grant as the scheme specifically excluded medical services such as dentists.
  4. Mr X wrote to the Council on 4 May disagreeing with the Council’s decision. He said he did not provide any NHS services and there is a component of retail at the premises. He said he had made a planning application in June 2018 to add retail to the planning usage. He urged the Council to reconsider its decision saying activities at the premises include provision of dental services, sale of dental products, provision of cosmetic treatments, sale of cosmetic products and equipment and sale of other goods and equipment.
  5. The Council wrote to Mr X saying that it had looked again at the decision to refuse his application for a RHL Grant but was unable to revise it. It said that while Mr X may have a display area selling products related to his dental business, it did not consider that retail was the main part of the premises.
  6. Mr X wrote to the Council again about its decision to refuse his grant application. He said the premises are so large it is unlikely one business would occupy it all. He said the space allocated to retail on the ground floor exceeds the area used by the dental practice. Mr X explained the retail element of the business was not just selling toothbrushes and dental trinkets. He said most of his selling is online via eBay and includes a variety of products such as watches, laserdisc movies and kitchen doors. He said the premises are used to physically meet online customers for inspection, demonstration or click and collect. Mr X said it would be grossly unfair to exclude a retail business because it did not occupy the whole building and that he really needed the grant.
  7. The next day Mr X wrote to the Valuation Office to amend the classification of his business premises to include retail. On 17 August, Mr X contacted the Council again saying the Valuation Office had re-classified the premises into two separate listings. There was a shop with the rateable value of £5,300 and offices with a rateable value of £14,000.
  8. The Council wrote to Mr X on 23 September responding to the splitting of his premises. It said that due to the rateable value of each of the premises, he was not entitled to the Small Business Rates Grant. It also explained that while one part is deemed to be a shop this did not automatically entitle him to the RHL Grant. It said Mr X mentioned previously the shop space is mostly used for meeting customers purchasing items from his eBay page. It said that to be eligible for the grant he must be able to prove the premises is trading as a fully functioning shop. It said Mr X would need to prove the premises has an “over the counter” shop element where customers can come in and buy good within the shop. It said this trading must have been taking place on 11 March 2020. The Council said that proof could include, but is not limited to, copies of receipts, invoices for goods purchased for the shop, photos of the shop including layout pre 11 March 2020, any signage outside the shop and any advertising for the shop and goods sold.
  9. I have not seen any evidence to show Mr X provided any further evidence to the Council regarding the retail part of his premises. When I discussed the complaint with Mr X he told me that he wanted to provide evidence to the Council but it had not provided him with the opportunity to do this. Mr X said he wanted to provide the information in person because of a previous identity theft.
  10. On 10 October the Council wrote to Mr X with a final decision on his case. It explained it had set up a new account for the shop element of the premises and this had been set up in his name. It said that if someone else was tenanting the unit then he should provide proof of occupation such as lease agreement or rent payments so it could change the occupant. It said it had no option but to refuse his grant appeal because he had not provided sufficient proof regarding usage as a shop and the rateable value of the two premises was combined in his name and so he is not eligible for small business rate relief or the small business rates grant.
  11. Dissatisfied with the Council’s decision, Mr X complained to the Ombudsman.


  1. Mr X complains the Council has wrongly refused COVID-19 related business grants to his two businesses. He considers the splitting of the premises by the Valuation Office into two separate units should have entitled him to the grants.
  2. On the application form originally submitted by Mr X he described the business as dentistry. There was no mention of retail. The Council refused the application for the RHL Grant because medical uses including dentistry were explicitly excluded. There is nothing to suggest any fault in how the Council reached this decision.
  3. Mr X then made further representations on the basis that part of the premises were used for retail. The Council reconsidered its decision to refuse a grant after the premises was split and two separate listings appeared on the ratings list. One listing continued to be a dentist practice and so was not reconsidered. However, the Council did consider if the retail part of the premises could be eligible for a grant.
  4. The Council wrote to Mr X explaining that based on information he had previously provided about the nature of his retail business, it did not consider he was eligible. However, it also clearly explained the further evidence it required in order to re-consider this decision.
  5. To be eligible for the grant, government guidance states the premises must be wholly or mainly used as a shop for the sale of goods to visiting members of the public. This is a test of use rather than just occupation. Therefore, I find no fault in the Council seeking further evidence to show the retail usage on 11 March 2020. Mr X has not provided any further evidence to the Council and so it has not reviewed the decision. I am satisfied the Council was willing to reconsider its decision to refuse the grants even though it had no obligation to do this because this was a decision based on a change to the rating list after 11 March 2020. However, Mr X did not provide further evidence, so I find no fault by the Council.

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Final decision

  1. I will now complete my investigation as there is no evidence of fault.

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Investigator's decision on behalf of the Ombudsman

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