Summary: Mr X complained about the business rates charges for a shop premises and that the Council did not award the Expanded Retail Discount (ERD). The Council properly considered entitlement to the ERD and took the view the premises were not eligible. There is no evidence of fault in the decision-making process.

The complaint

1. Mr X complained the Council has wrongly treated his premises as empty for business rates charges as the property is not empty. He also complains it should have awarded the expanded retail discount.
2. Mr X says this decision has caused financial difficulties for his business.

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The Ombudsman’s role and powers

3. 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)
4. 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”.
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. 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

Expanded Retail Discount (ERD)

7. In April 2020 MHCLG published “Business Rates, Expanded Retail Discount 2020/21: Coronavirus Response Local Authority Guidance”.
8. The guidance stated that properties that will benefit from the ERD in the year 2020/21 will be occupied hereditaments that are wholly or mainly used for retail, hospitality or leisure.
9. The guidance also stated it considers shops to mean hereditaments that are being used for the sale of goods to visiting members of the public.

Key facts

10. Mr X works for a company which runs a number of convenience stores that sell both general food items and fresh, takeaway food items. The Council took the view the property was empty from March 2020 and so applied a three month empty property exemption and then it charged the company the full business rate charge.
11. Mr X corresponded with the Council about the use of the shop. In August 2020, the Council said it had conflicting evidence about when the shop was open and asked Mr X to provide evidence. The Council asked Mr X to provide details of the exact dates the shop was trading, utility bills, daily transaction records, business bank statement, salary payments to staff, photographs of the shop and the link to any website or Facebook page. Mr X explained the original concept for the shop was not successful in that location and so it closed. He then re-opened it as a discount store and changed its name. Mr X says he tried to sell the lease while still operating the shop. The discount store sold food items. Mr X told the Council he had closed the store in March 2020 due to lockdown and to consider future options.
12. In September 2020, the Council reviewed the evidence provided by Mr X regarding deliveries in October, November and December 2019. The Council applied an occupied charge from 30 October 2019 to 17 January 2020.
13. Mr X continued to correspond with the Council. He said that the shop was only opening at weekends and it was running down the stock. Mr X made a formal complaint in October 2020 about the time taken to resolve the business rates issue. Mr X said that he had provided adequate information to show the premises was operating as a shop.
14. The Council responded to Mr X on 4 May 2021 saying it had now updated its records to show the last day of trading at the shop was 22 March 2020. It said it had awarded a three month empty property exemption and that after this the property rates are due and payable. It said that Mr X had not provided evidence to show any trading from the premises since 22 March 2020.
15. Mr X replied to the Council saying that he was forced to close on 23 March due to the national lockdown. He argued that the premises should be awarded the expanded retail discount.
16. On 18 May 2021 the Council wrote to Mr X saying it considered the property had been closed since the weekend of 21/22 March and had not re-opened. It said it could not award the ERD as it did not consider the shop was temporarily closed. It said the shutters had been down since 22 March and it was advertised as available to let. It said that internet searches on the company website stated the store was permanently closed. The Council said the shop had not re-opened even though food shops were allowed to remain open throughout the lockdown.
17. The Council maintains its position that the premises are not entitled to ERD and that the business rates remain due and payable.

Analysis

18. Mr X believes the premises should be entitled to ERD because the shop only stopped trading due to the lockdown. He is not convinced the premises should be considered an essential retailer. He feels the Council is being unreasonable in taking the view the shop is permanently closed as he says it might re-open at some point. Mr X says that the shop was opening at weekends until the lockdown forced him to close and denies that a decision to close had been taken before that happened.
19. The ERD was introduced for the tax year 2020/21 and so was applicable from April 2020. The government guidance for the ERD states it will benefit properties that are occupied and wholly or mainly used as shops. It goes on to say that it considers a shop to be a hereditament used for the sale of goods to visiting members of the public.
20. I am satisfied the Council has properly considered the circumstances in this case. When presented with information about trading from October 2019, it amended its decision regarding business rate charges. It later amended the business rate account again when Mr X provided further evidence. The Council says that Mr X is not entitled to the ERD because the business was not trading in the year 2020/21 and so did not meet the eligibility criteria. In reaching this decision, it has considered a variety of information including Mr X’s acknowledgement that the shop has not been open since 22 March 2020; the company website page stating the shop is permanently closed and that the shutters are down and there is a for sale sign on the premises.
21. While I appreciate Mr X disagrees with the Council’s decision, I am satisfied this is a decision the Council is entitled to take and as I have not found any fault in the process leading to that decision, I cannot criticise it.

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Final decision

22. 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