Summary: There is no evidence of fault in how the Council reached the decision that Mr X’s business was not eligible for the Expanded Retail Discount. The Council properly considered the evidence submitted by Mr X about the use of the premises and determined it was not wholly or mainly used as retail for visiting members of the public.

The complaint

1. Mr X complained the Council wrongly refused his application for the expanded retail discount on the basis his business is a warehouse when he considers it is retail.
2. Mr X says he has suffered financially.

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The Ombudsman’s role and powers

3. 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)
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 an organisation’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 invited their comments.

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What I found

Expanded Retail Discount (ERD)

7. In April 2020 the government published “Business Rates, Expanded Retail Discount 2020/21: Coronavirus Response Local Authority Guidance”.
8. The ERD was available to premises wholly or mainly used for retail, hospitality or leisure.
9. The guidance listed the types of businesses that were eligible. It said the list was not exhaustive and that there would also be mixed used. It said it was for councils to decide if a business was broadly similar in nature to those listed and so eligible.

Key facts

10. Mr X says his business is a warehouse and a shop. He says customers do visit the premises and buy items. He says often customers will visit to make the first purchase and then will call to place orders or order online.
11. Mr X has been in contact with the Council about the rateable value for the premises prior to the COVID-19 pandemic. However, any issues about the correct rateable value are matters for the Valuation Office Agency (VOA) and not the Council.
12. In April 2020 the government introduced the ERD. This meant that eligible businesses did not have to pay business rates for the year 2020/21. This discount was introduced as part of a package of help for businesses during the pandemic and lockdowns.
13. Mr X applied for the ERD. He stated it was retail business and that it was in the process of amending the business rates listing which stated it was a warehouse. Mr X attached evidence to support this including client invoices to show the business had walk-in customers. The Council refused Mr X’s application saying the business was not eligible for the ERD.
14. Mr X and an agent acting on his behalf, contacted the Council to seek a review of this decision. The Council wrote to Mr X on 24 August 2021 saying it had reviewed the decision but it remained unchanged.
15. The Council said that in order to be eligible for the ERD, the occupied hereditament should be wholly or mainly used as a shop for the sale of good to visiting members of the public. It explained the guidance specifically excluded hereditaments that were not reasonably accessible to visiting members of the public. It said the business is situated in a warehouse on an industrial estate clearly focussed primarily on online wholesale and commercial trade sales. It said the business may accept sales to individuals and it may complete sales via collections in some cases but it was not persuaded the premises were wholly or mainly a shop. It said there is no customer parking or entrance to the premises, no showroom or shopping aisles to view and select available goods and no dedicated till/payment counter which meant it could not be considered to be a shop or reasonably accessible to the public.
16. Mr X made a formal complaint to the Council in February 2022. His said his dispute was that the Council had incorrectly valued the business and classified it as a warehouse rather than a retail shop. He again attached evidence including invoices from wholesales and card payment receipts issues to customers as evidence of footfall and that the business is open to the general public.
17. The Council responded on 27 February 2022. It said the decision made on 24 August 2021 was correct. It said the government guidance for the ERD said that to quality the hereditament had to be wholly or mainly used for a use that qualified for the discount. It said these are public facing businesses wholly or mainly for the sale of goods to visiting members of the public and clearly advertised as such. It said Mr X’s business was not eligible for the ERD according to the guidance.

Analysis

18. Mr X has a number of concerns relating to the business rates and rateable value for his business premises. This complaint is concerned only with his eligibility for the ERD. Mr X argues that his business is retail and so should have been given the ERD.
19. I am satisfied the Council properly considered Mr X’s original application for the ERD. It considered the evidence Mr X provided and accepted that there may be some sales at the property to visiting individuals. However, it took the view that this was not the majority of the business and so it was not wholly or mainly a shop.
20. In response to my enquiries the Council has provided a further, more detailed explanation of how it reached its view the Mr X’s business was not eligible for the ERD. It said it had considered the VOA listed which showed the premises listed as a warehouse. It said it also considered the terms of Mr X’s lease which he copied to the Council. This stated the permitted use as warehouse with ancillary office accommodation within Class B8 of the Town and Country Planning Act. It said that Class B relates to business and industrial and the retail come under Class A uses. It said the lease stated the property could not be used for anything other than the permitted use. It was satisfied the lease allowed industrial use, specifically storage and distribution.
21. The Council also explained its consideration of whether there was a mixed use at the premises that would mean it was eligible for the ERD. It says it looked at images of the location and site and found no customer access which would make it similar to eligible properties. It says the website for the business does state customers can collect goods but it did not consider the premises were open to visiting members of the public and so it did not consider the business was mixed use in accordance with the guidance.
22. I am satisfied the Council has given proper consideration to Mr X’s eligibility for the ERD. It has explained that it does not consider Mr X meets the eligibility requirements because the business is not wholly or mainly used for the sale of goods to visiting members of the public. I appreciate Mr X disagrees with the Council’s assessment and says he has provided evidence of direct sales to visiting members of the public. The Council has considered the evidence provided by Mr X and then used its professional judgement to reach its view. I difference of opinion is not evidence of fault.
23. I note that in its response to Mr X’s formal complaint dated 27 February 2022 the Council mentioned that the business was not clearly advertised as open to visiting members of the public. There is nothing in the guidance that mentions advertising and so the Council was wrong to give this as a reason. However, this was not mentioned in the original decision dated August 2021 and I do not consider this was the primary reason why the Council did not pay Mr X the ERD.
24. I also asked the Council for details of its business rates hardship relief scheme and whether it had advised Mr X of this and provided details of how to make a claim. The Council explained it had not done this but that it was open to Mr X to make an application. It also provided details of the Covid Additional Relief Fund (CARF) which is further government funding available to hereditaments that had not received support previously. It explained its scheme was finalised in December 2021 and a flat rate relief of 14% was applied to eligible hereditaments including Mr X’s business premises. This relief was for the year 2021/22 and has now been applied to Mr X’s rates account.

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Final decision

25. I will now complete my investigation as there is no evidence of fault in the Council’s decision to refuse Mr X’s application for the ERD.

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Investigator's decision on behalf of the Ombudsman