Summary: We have discontinued our investigation of this complaint, about the Council’s handling of a business’s liability for rates, relief and a COVID-19 support grant. This is because there is an ongoing appeal to the magistrates’ court by a different business, the outcome of which will also affect this business’s situation.

The complaint

1. I will refer to the complainant as Mr C.
2. Mr C complains the Council has decided his business – Business B – is not liable for business rates on its premises. This means Business B was not eligible to receive a COVID-19 small business grant (SBG).

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The Ombudsman’s role and powers

3. We cannot investigate a complaint about the start of court action or what happened in court. (Local Government Act 1974, Schedule 5/5A, paragraph 1/3, as amended)

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How I considered this complaint

4. I reviewed Mr C’s correspondence with the Council, and notes provided by the Council in response to my enquiries.

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What I found

5. Mr C says Business B occupies part of a shared industrial unit, alongside another business, Business A, each with their own separate liability for business rates. However, the Council does not accept this, and considers Business A is liable for the business rates across the whole unit.
6. This means Business B does not have a business rates liability, and therefore is not eligible for Small Business Rates Relief (SBRR). And this, in turn, meant Business B was not eligible for the SBG scheme, because receipt of SBRR was one of the qualifying criteria.

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Legislative background

7. In March 2020, the government created schemes for councils to pay grants to small businesses and retail, hospitality and leisure businesses. This was because the COVID-19 restrictions affected so many of them.
8. A business’ right to a grant depends on its rateable value on the business rating list and its eligibility for certain business rate reliefs on 11 March 2020. Government guidance states later changes to the rating list, even if they are backdated to 11 March 2020, do not entitle a business to a grant. A council can make an exception if, on 11 March 2020, it already had good reason to believe the rating list was inaccurate for a particular address or business.
9. The Valuation Office Agency (VOA), not the Council, compiles the rating list and decides on liability for business rates and rateable values.  
10. Not every business appears on the rating list as not all of them have to pay business rates.

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Analysis

11. I am aware Business A has challenged the Council’s decision on its business rates liability to the magistrates’ court. The court will decide which part of the industrial unit Business A should be liable for.
12. Although Business B is not party to these proceedings, the outcome has a direct impact on Mr C’s complaint. If the court decides Business A is correctly liable for the whole unit, this will inevitably mean Business B cannot be liable for any part of it. Consequently, there would be no fault by the Council in deciding it was not eligible for the SBG scheme.
13. If this happens, I acknowledge Mr C might also disagree with the court’s decision. However, the Ombudsman must respect the court’s decision, and we could not overturn it or instruct the Council to disregard its findings.
14. Alternatively, if the court finds in Business A’s favour, this will leave Business B’s situation unresolved. I am conscious that a decision by the court that Business A is not liable for the whole unit would not automatically then mean Business B was liable for part of it. But, under such circumstances, we would expect the Council to consider whether it should revisit Business B’s case, with a mind to potentially accepting its liability, and retrospectively granting SBRR and the SBG.
15. Either way, I am satisfied now is not the right time for the Ombudsman to become involved in this matter. Any decision I could make under the current circumstances would necessarily be conditional on the outcome of Business A’s appeal. For this reason, I will discontinue my investigation.

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Final decision

16. I have discontinued my investigation.

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Investigator's decision on behalf of the Ombudsman