Summary: There was no fault in the Council’s decision the complainant’s business was not eligible to receive rates relief under the expanded retail discount. For this reason, we have completed our investigation.

The complaint

1. I will refer to the complainant as Mr V. Mr V is represented in his complaint to the Ombudsman by Mr J.
2. Mr J complains the Council has refused to grant rates relief for Mr V’s business premises under the expanded retail discount (ERD).

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The Ombudsman’s role and powers

3. This complaint involves events that occurred during the COVID-19 pandemic. The Government introduced a range of new and frequently updated rules and guidance during this time. We can consider whether the Council followed the relevant legislation, guidance and our published “Good Administrative Practice during the response to COVID-19”.
4. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
5. 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

6. I reviewed the correspondence between the Council, Mr V and Mr J, and some of the Council’s internal correspondence.
7. I also shared a draft copy of this decision with each party for their comments.

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What I found

8. There is a particular nightclub premises in the Council’s area, the leaseholder of which I will call Company A.
9. In September 2019, the previous owner of Company A informed the Council the premises had been empty since June. He invited the Council to visit and said the electricity had been disconnected. After inspecting the premises, the Council confirmed it was empty, and granted ‘empty property’ business rates relief for three months, backdated to June.
10. Also in September, the previous owner sold Company A to Mr V’s company, Company B. Neither Mr V nor the previous owner informed the Council of the change in ownership.
11. Over the next few months, the Council sought payment of the premises’ business rates for the 2019/20 year (less the three months’ relief). It first sent reminders to the previous owner’s registered business address, but was later referred to Mr V’s accountants for payment. Mr V contacted the Council in February 2020 and paid the outstanding business rates in full.
12. After the Government’s announcement of several support schemes for businesses affected by the COVID-19 lockdown, Mr V applied to the Council for a grant. However, the Council responded to say Mr V’s business was not eligible for any grant. This was because the premises’ rateable value was over the eligibility threshold, and because the Council’s records showed the premises was not trading on the qualifying date of 11 March 2020.
13. Shortly after this, Mr V emailed the Council to ask why he had received a business rates reminder for 2020/21, when there was currently a “one year rates holiday”. The Council replied to explain it was billing Mr V for full rates because the premises was empty, and that the ERD only applied to premises which had been trading.
14. There followed a long series of correspondence between Mr V, and later Mr J, and the Council, culminating in the submission of a formal complaint about the Council’s decision. For the sake of brevity, I will not document each piece of correspondence, but will instead summarise the Council’s Stage 2 complaint report of 7 January 2021, which sets out clearly each party’s respective position.
15. The Council said it had correctly pursued Company A for the premises’ business rates for 2020/21. It was the responsibility of owners and/or leaseholders to update the Council when a change to rates liability had occurred, but Mr V had not done so.
16. The Council acknowledged Mr V had paid the 2019/20 business rates from an account in Company B’s name. However, this alone did not indicate a change in liability. The information Mr V had since passed to the Council was not enough to document a change in liability and so it had requested further information.
17. The Council said it was required to process applications for the ERD under the relevant legislation, and the decision whether to grant rested with local authorities. There was no appeal process for this decision. The Council had reviewed all documentation arising as part of Mr V’s challenge and had explained the reasoning for its decision. The Council had decided the “company who leasehold [the premises]” was not entitled to the ERD.
18. The Council noted Mr V’s complaint he had not been made aware, until August 2020, the premises had been listed as empty for both 2019/20 and 2020/21. It replied that it had sent all relevant documentation to the address it held for the liable party. The previous owner was aware the premises had been listed as empty and so this information had been available to Mr V.
19. Mr V had complained there had been a “lack of timely physical correspondence” with the Council, although acknowledged the impact of the pandemic on this. The Council explained its policy was to respond to correspondence within 15 working days, although some of its departments aimed to respond in five working days where possible.
20. Mr V had also complained the Council had not updated its records to show Company B as the liable party, after he had contacted it to pay the 2019/20 business rates in February 2020. The Council explained that, in law, the liable party is held to be the one with the “most interest” in the relevant premises. In this case, as the leaseholder, the Council considered Company A was still the liable party. It said it could not accept verbal notification of a change in liability.
21. The Council acknowledged Mr V had wished to discuss the matter by phone, but said, due to nature of this particular area of work, it was necessary for changes of liability or ownership to be submitted in writing and for verification checks to be undertaken. The Council also commented that it frequently processed business rates and council tax liability updates directly through its website, without the need for phone calls.
22. Mr V had complained the Council had not responded to his final email, wherein he sought to “at least compromise sensibly regarding dates and timings”. The Council said it had made its position clear, and that the legislation underpinning the ERD did not allow for compromise.
23. The Council reiterated that it had properly considered the legislation, and made reasonable enquiries, in deciding whether to grant the ERD for the premises, and that it had explained its decision not to. It recommended Mr V provide any additional supporting evidence he had, and referred him to the Ombudsman if he wished to pursue his complaint further.
24. Mr J complained to the Ombudsman on Mr V’s behalf on 9 March.
25. The Council has provided information which shows that, since Mr V made his complaint, he has sold Company A to a third party. But, as he was the owner at the material time, I will disregard this for the purpose of my consideration of his complaint.

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Legislative background

Expanded retail discount (ERD)

26. In March 2020, the Government announced that all retail businesses would receive 100% relief from business rates for the tax year 2020/21. In April, it then published guidance for councils on how to apply this relief.
27. At paragraph 10, the guidance said:

“Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

1. as shops, restaurants, cafes, drinking establishments, cinemas and live music venues,
2. for assembly and leisure; or
3. as hotels, guest & boarding premises and self-catering accommodation.”
1. The guidance went on to specify that, for each category, the premises in question must be providing goods or services to “visiting members of the public”.
2. And at paragraph 14, it said:

“To qualify for the relief the hereditament should be wholly or mainly being used for the above qualifying purposes. In a similar way to other reliefs (such as charity relief), this is a test on use rather than occupation. Therefore, hereditaments which are occupied but not wholly or mainly used for the qualifying purpose will not qualify for the relief.”

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Analysis

30. The Council has explained it is the duty of the liable party – be it the premises owner or leaseholder – to notify it when a change of liability takes place. I note Mr V does not appear to dispute that he did not contact the Council when he took ownership of Company A, and through it, the lease on the premises, in September 2019.
31. The Council says the business rates bills it subsequently sent to Mr V explained the premises was listed as empty. Mr V has said his accountant provided him only partial copies of the bills, and that the sections he received did not include this information.
32. The Council has also explained it does not accept verbal notification of a change in liability, and so Mr V’s phone call to the Council in February 2020 was not sufficient to update its records. It has commented further that the fact Mr V paid the 2019/20 rates from an account in Company B’s name was not evidence the liability had changed, as such bills are often paid from accounts with different names from the liable party.
33. I am satisfied with the reasoning the Council has given for its decisions on these points. However, in the context of Mr V’s claim for the ERD, these matters in fact appear largely academic. Mr V owns Company A, and so, regardless of whether it or Company B was the correct ratepayer, it was not this which prevented him from benefitting from the ERD.
34. Similarly, while Mr V was unaware the Council’s records showed the premises as empty, until August 2020, it does not appear this would have made a difference to his eligibility for the ERD. This is because the Council has made clear it is not satisfied the premises had been brought back into use by the qualifying date of 11 March 2020.
35. The 2020 guidance on the ERD explains eligibility is about use, not just occupation, and that the premises in question must be “wholly or mainly” accessible to provide goods or services to visiting members of the public.
36. Mr V says the nightclub was open for business, and not empty, because it held two private events before lockdown, but the Council has explained it is not satisfied this means it was accessible to the public. In correspondence with Mr V, it pointed out there was no information online to show the premises was open to public. It also commented on the fact there was no extant licence for the premises at the time Mr V said these events were held.
37. So, even if Mr V had known the Council’s records showed the premises was empty, I cannot see what difference this would have made to the Council’s decision about the ERD. It appears it would still not have accepted the premises was in use and open to the public, as required by the eligibility criteria.
38. The Ombudsman’s role is to review how councils have made their decisions. If a council has followed the correct procedure, taken account of all relevant information, and given clear and logical reasons for their decision, we generally cannot criticise it. We do not make operational or policy decisions on councils’ behalf, or provide a right of appeal against contested decisions, and we cannot uphold a complaint simply because a person disagrees with something a council has done.
39. It is for the Council to decide whether a premises meets the eligibility criteria for the ERD. I understand Mr V’s case for why he considers it did meet the criteria, but equally, I am satisfied the Council has provided cogent reasons for its view it did not meet the criteria. That Mr V does not agree with the Council’s position is not evidence of administrative fault, and does not give me grounds to uphold his complaint.

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Final decision

40. I have completed my investigation with a finding of no fault.

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Investigator's decision on behalf of the Ombudsman