Summary: There was no fault in how the Council decided whether the complainant’s business was eligible for the business rates expanded retail discount. We have therefore completed our investigation.

The complaint

1. I will refer to the complainant as Mr J. Mr J represents a business which provides sports holidays to paying members.
2. Mr J complains the Council refused to provide the business with the expanded retail discount (ERD) for tax years 2020/21 and 2021/22.

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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 consider whether there was fault in the way an organisation made its decision. If there was no fault in the decision making, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
4. 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

5. I reviewed the Council’s correspondence with the business.
6. I also shared a draft copy of this decision with each party for their comments.

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What I found

7. There has been a significant volume of correspondence between the Council and business about this matter, which culminated in the business making a formal complaint to the Council and then referring it to the Ombudsman in April 2022. In the interests of clarity I will not reproduce or detail the full series of correspondence here, but instead will simply set out the key points of each party’s position.
8. The business’s claim to be eligible for the ERD is based on the fact its business premises was open for members of the public to visit, to open memberships and to book holidays. It says that, although it conducts most of its business by phone, this is something common to all similar firms; and it had rooms and staff members in the office dedicated to dealing with visiting customers. It has also explained customers did not need an appointment to visit and could do so simply by using the entry phone for the building.
9. The Council’s position is that the business’s premises are not “wholly or mainly” used for the sale of goods or services to visiting members of the public, which is the qualifying criterion for the ERD. Rather, it said the business was using its premises as an office, with an ancillary function to serve visiting members of the public. In doing so, it reviewed photographs the business submitted and said it was satisfied these demonstrated the premises’ use was primarily as an office.
10. The Council highlighted that the building in question is listed as an office by the Valuation Office Agency, and that the business’s lease for the premises also describes it this way. The Council also commented that no other business based in the same building has qualified for the ERD.

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Legislative background

Expanded retail discount

11. 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.
12. 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. 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.”

14. The Government implemented a similar scheme for the tax year 2021/22, with the same qualifying criteria.

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Analysis

15. The Ombudsman’s role is to identify and address administrative fault in how councils have made their decisions. We may criticise a council if, for example, it has not followed an appropriate procedure, not taken account of relevant information, or failed to properly explain a decision. Where this has happened, we can consider the consequences of the fault and ask the council to take steps to put it right.
16. However, we do not provide a right of appeal against council decisions. We cannot overturn their decisions, and nor can we direct councils to act against their own professional judgement. We cannot uphold a complaint just because somebody disagrees with a council’s decision.
17. In its correspondence with the Council, the business has set out clearly why it considers it should be eligible for the ERD. However, I am equally satisfied the Council has explained why it does not agree, with reference to the Government’s published guidance – the critical point being that the business does not use its premises wholly or mainly to serve visiting members of the public, but rather as an office, with an ancillary function serving members of the public. This is a decision the Council was entitled to make, and as there is no evidence of administrative fault in how it has done so, I have no grounds to criticise it.
18. I do note part of the Council’s case was that an officer visited the building in December 2021, but was turned away by the receptionist and could not access the business’s office. The Council presented this as evidence the premises was not open to visiting members of the public. However, the business responded that it had moved to a different premises in October, and had notified the Council of this at the time.
19. This was clearly an error by the Council, and so I accept this element of the Council’s evidence should be disregarded. But this was only one part of the evidence the Council relied on, and I do not consider this undermines the Council’s case as a whole. The remaining evidence put forward by the Council still carries the same weight, in spite of this.
20. I therefore find no fault in the Council’s decision about the business’s eligibility for the ERD.

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Final decision

21. I completed my investigation with a finding of no fault.

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Investigator's decision on behalf of the Ombudsman