Summary: Mr X complained the Council failed to register his business for rates purposes, resulting in his missing out on a business grant. Mr X also complained the Council failed to give him advice on business rates prior to 2015. We will not investigate matters prior to 2015 due to the time passed. We find the Council at fault in its handling of Mr X's business rates account. We recommend it provide an apology and payment for time and trouble.

The complaint

1. Mr X complains the Council failed to register his business for rates following his requests from 2015, resulting in his missing out on a business grant in March 2020.
2. Mr X also complains the Council did not give him advice about splitting his building for rates purposes prior to 2015, meaning he paid £4000 per year in business rates which he could have avoided.

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What I have investigated

3. I have investigated the complaint at paragraph 1 above. At the end of this decision I have set out why I have not investigated other matters.

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The Ombudsman’s role and powers

4. 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).
5. 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)
6. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
7. 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”.
8. 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

9. I spoke to Mr X and I reviewed documents provided by Mr X and the council.
10. I gave Mr X and the Council an opportunity to comment on a draft decision. I considered any comments before making a final decision.

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What I found

Valuation Office Agency

11. The Valuation Office Agency (“VOA”) compiles and maintains lists detailing the rateable value (“RV”) of commercial properties for business rates (the “VOA rating list”).
12. Business rates can change if:
• you move or make changes to your premises
• the nature of your business changes
• you sublet part of your property
• you merge 2 or more properties into 1.
13. A business must report any changes to the VOA to ensure they are paying the right amount in rates.
14. Councils may also contact the VOA and ask it to reassess a property.

Business grants

15. 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).
16. Of relevance to this case, businesses which, on 11 March 2020, received Small Business Rates Relief (“SBRR”) were eligible for a Small Business Grant of £10,000. SBRR is available to properties with an RV below £15,000.
17. Funding was payable to the person recorded as the ratepayer in respect of the business on 11 March 2020. However, where a council had reason to believe the information they held about the ratepayer on 11 March was inaccurate, they could withhold or recover the grant and take reasonable steps to identify the correct ratepayer.
18. A council had to ignore any changes to the VOA rating list after 11 March, including backdated changes. However, where it was factually clear to a council on 11 March that the rating list was inaccurate on that date, it could 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 was entirely at the discretion of the council and only intended to prevent manifest errors.

What happened

19. The Council issued Mr X’s company one business rates bill for a property named Floors 1 to 3 at Address A.
20. In December 2014 Mr X told the Council he leased each of the four floors at Address A. He gave the Council details of the businesses occupying each floor and confirmed he occupied the ground floor.
21. In February 2015 the Council told Mr X it would inspect the building to see if it should send a report to the VOA for it to create a separate rates assessment for each floor. It confirmed it could only issue individually rated bills if the VOA reassessed the property.
22. The Council has provided a copy of inspection request. This includes an extract from Mr X’s email explaining various businesses occupied the four floors at Address A.
23. The Council has also provided a copy of its request to the VOA dated 16 February 2015. This asked the VOA to rate Floors 1 to 3 at Address A separately.
24. On 22 April 2015 the Council updated Mr X that the VOA had created three new assessments for Floors 1-3 and it would now bill each tenant for the floor they occupied. Further that he could contact the VOA directly if he was unhappy with its assessments.
25. The Council says Mr X contacted it by phone on 21 May 2020. He was unhappy he missed out on a business grant because the Council had not billed him as ratepayer for the ground floor at Address A years ago. Mr X sent an email on the same day enclosing correspondence to show he had tried to resolve this in 2015.
26. The Council responded on 19 June 2020. It explained the ground floor was not included in the VOA assessment in 2015 and so it was not rated at that time. As the ground floor was not on the VOA rating list it could not consider providing the grant. However, Mr X could now provide relevant information and it would ask the VOA to assess the ground floor. It also suggested he could apply for a discretionary grant.
27. Mr X complained as he reported all four floors to the Council in 2015 and it was not his fault the ground floor was not on the rating list.
28. The Council explained it sent a report to the VOA in February 2015 for it to split Floors 1 to 3. It told Mr X of the VOA decision to assess these floors individually and that he could contact the VOA if he was unhappy. Mr X did not contact the business rates team again. The Council accepted there was an error in the ground floor not being entered onto the rating list in 2015. However, it said Mr X knew he was not being billed for rates for the ground floor but did not contact the Council to rectify this. The ground floor was not on the rating list and so he was not eligible for a grant. It had no discretion as regulations were set by the Government.
29. Mr X acknowledged the Council updated him on the assessment for three floors but said he had no reason to think the ground floor would not be duly assessed. He said he had queried the arrangement with the Council since 2003. When the Council inspected his property in 2015 he explained the set up, including that his own two companies occupied the ground floor. When he found floors 1 to 3 were reassessed he did speak to someone about the ground floor but did not get anywhere. He assumed it would qualify for SBRR due to its size in any event and so did not pursue this. However, when he applied for a grant in March 2020 he realised his business was still not registered for rates. He asked to apply for a grant as it was not his fault the Council made a mistake in 2015.
30. The Council explained for many years the property was entered on the VOA rating list as Floors 1-3 and it issued bills accordingly. In 2015 the VOA split the entry into three separate entries and billed each tenant individually. The Council then billed each tenant. It also updated Mr X and told him to contact the VOA if he was unhappy. In 2017 Mr X called the Council querying the rates and was told to call the business rates team. However, it has no record he then spoke to anyone. On 21 May 2020 he contacted the Council to say he was missing out on the grant for his business occupying the ground floor. However, the ground floor was not on the rating list and so was not eligible for a grant. It could not overcome this; the property was not listed and so had no rateable value against which to award a grant. It had no discretionary powers. It could not say with any degree of certainty where ‘blame’ lay for the current scenario. It could not say the Council had advised him incorrectly and so could not uphold his complaint.
31. Mr X then contacted the Ombudsman.
32. As part of my enquiries I asked the Council to comment on its discretionary powers in such cases where it knew the rating list was inaccurate (see paragraph 18).
33. The Council said:
• If the ground floor was on the rating list and had an RV below £15,000 Mr X may have qualified for a Small Business Grant (“SBG”) however; he did not provide any evidence that would have allowed it to make a favourable discretionary decision.
• Even if a business is ratings-listed, there were still other qualifying criteria for the scheme(s) which had to be satisfied, to enable the Council to claim any award back from the government as ‘legitimate’.
• It urged Mr X to apply for a discretionary award. Had he done so it may have awarded an amount equal to the SBG.
• It accepted the Council knew of the existence of the Ground Floor unit, albeit not registered. It was also reasonable to conclude there was some fault on the part of the Council in making the report to the VOA. However, to make a discretionary award, it needed to be certain the potential RV would fall below the threshold, which it was not.
• Mr X has avoided paying rates since 2015 which could have amounted to around £12,000. So overall he has benefitted.
• The Ground Floor unit was brought into the Rating list in January 2021, and back dated to January 2020.

Findings

34. Mr X’s complaint that the Council failed to register his business for rates in 2015 arose more than 12 months ago and he could have complained to the Ombudsman at the time. However, there is potentially continuing fault and injustice and there appear to be enough records to investigate and achieve a meaningful remedy. Therefore, I consider there are good reasons to exercise my discretion to investigate this complaint.
35. In 2015 the Council offered to file a report with the VOA for it to reassess Mr X’s property. In view of the correspondence exchanged, I consider Mr X reasonably expected this to include the ground floor which was not yet registered for rates. However, the Council made no mention of the ground floor to the VOA. This is fault. As a result the VOA did not assess the ground floor or enter it onto the rating list at that time.
36. Where I find the Council at fault I must consider whether this fault directly caused Mr X an injustice. I must also consider whether Mr X could have avoided any injustice suffered. On the documents provided, I am satisfied Mr X knew the VOA had not registered the ground floor for business rates. And, as Mr X did not receive any business rates bills for the ground floor, he knew the Council had not set up a business rates account for it. Mr X therefore could have avoided any injustice arising from the Council’s fault by contacting the VOA himself or by making further efforts to contact the Council between 2015 and 2020. I therefore make no remedy recommendations to the Council on this point.
37. When Mr X applied for a business grant, the Council refused as his business was not on the rating list. However, it knew the list was factually inaccurate at that time. Therefore, the Council should have considered whether to exercise its discretion to award the grant based on its view as to whether Mr X would have been entitled to it. Instead, the Council told Mr X it had no discretion. That was incorrect and amounts to fault. Mr X was put to time and trouble complaining to the Ombudsman as he felt the Council had ignored the circumstances of his case.
38. The Council has since considered its discretionary powers. Of relevance to my decision, it points out that it could not know what RV the VOA would give to the ground floor and so could not have decided on Mr X’s grant eligibility in any event. I accept that was the case. The Council did not know what RV the VOA would attribute to the businesses on the ground floor and it could not decide on rates relief or a grant without this information. I therefore find the Council’s fault did not affect the outcome of Mr X’s grant application.

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Agreed action

39. To remedy the injustice set out above I recommend the Council take the following actions within one month of the date of my decision:
• Provide Mr X with a written apology;
• Pay Mr X £100 for the time and trouble in bringing his complaint to the Ombudsman.
40. The Council has accepted my recommendations.

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Final decision

41. I find the Council at fault in its handling of Mr X’s business rates account and in its decision making on a business grant. The Council has accepted my recommendations and I have completed my investigation.

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Parts of the complaint that I did not investigate

42. Mr X complains the Council gave him poor advice prior to 2015. He says he paid business rates for the whole building, rather than ensuring each property was split into smaller units and so entitled to rates relief.
43. I did not investigate this complaint. This is because the complaint arose more than 12 months ago and Mr X could have complained to us sooner; it is unlikely there would be adequate evidence for me to reach any findings given the time passed and; it is unlikely I could find the Council responsible for any injustice, given Mr X could have contacted the VOA himself and/or sought business rates’ advice privately.

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Investigator's decision on behalf of the Ombudsman