Summary: Mr X was liable for business rates from June 2019 to March 2021 but the Council delayed and did not bill Mr X until November 2021. There was fault by the Council in failing to contact Mr X directly after receiving his contact details but there is no evidence Mr X ever contacted the Council himself and so the injustice claimed was not as a direct result of the Council’s fault.

The complaint

1. The Council’s delay in making Mr X liable for business rates meant he missed out on the £25,000 COVID-19 business grant and he was unable to claim rate relief.
2. Mr X says he is being pursued for a debt of £18,000 which he cannot afford to pay.

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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. 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. 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

6. Mr X bought a business in June 2019 and says he informed the Council of the change and sent a copy of the lease. He says the Council failed to take action and update its records.
7. On 20 November 2019 the Council received information from Mr B, the property landlord, that there is a new tenant, Mr X. Mr B provided details of Mr X’s name, address and telephone number. The Council responded to Mr B saying it was unable to verify the tenant and asked for a copy of the lease, proof of rent and copy of Mr X’s identification.
8. In January the Council wrote to Mr B saying that as he has not provided the documents requested, it has made Mr B liable for business rates from 1 April 2019. Mr B replies saying that the former tenant, Mr Y, left the premises on 3 June 2019.
9. The Council wrote saying this information conflicts with its records and notes the information previously requested has not been provided. It requests evidence to show Mr Y left on 3 June and requests the information about Mr X which it previously requested. There is no evidence to suggest Mr B responded to this request for information.
10. As the business rates were not paid, the Council commenced recovery action against the landlord, Mr B. He instructed a solicitor, Mr Z, to act on his behalf. Mr Z attended court on behalf of Mr B in July 2021. In August, following the court hearing, the Council wrote to Mr Z asking him to provide documentary evidence in respect of Mr B’s liability for business rates at the premises.
11. Correspondence between the Council and Mr Z about what evidence is required continued. Mr Z told the Council he was struggling to get the necessary information and had submitted an appeal to the valuation office and asked the Council to postpone the action until the outcome is known. The Council said it had been requesting the information since December 2019 and so would not postpone the court hearing.
12. The Council wrote to Mr Z on 8 October 2021. It said the Court had granted liability orders at the hearing on 22 September and agreed it would not take enforcement action if it received information about Mr B’s occupation of the premises within seven days.
13. On 14 October 2021 Mr Z sent a copy of the lease for Mr X. He also provided another lease dated 8 July 2021 naming a new tenant, Mr W. The Council contacted Mr Z saying that it had amended the business rate liability to show Mr W as liable but cannot amend the liability in respect of Mr X until the previously requested information is provided. Mr Z contacted the Council saying Mr X accepts liability for the business rates and will send further information soon.
14. In November 2021 Mr Z wrote to the Council with Mr X’s contact details and said his liability for business rates at the premises is from 3 June 2019 to 31 March 2021. He also provided a copy of a council tax bill for Mr X and a copy of Mr X’s driving licence. The Council responded asking for information to show Mr X was trading at the premises during the stated period.
15. On 8 November 2021 the Council wrote to Mr X detailing his liability for business rates at the property for the period 3 June 2019 to 31 March 2021 and that he owed £16,721.62. On the same day the Council wrote to Mr Z saying that Mr X had now been made liable instead of Mr B.

Analysis

16. The information provided indicates that Mr X held a lease for business premises from 3 June 2019 to 31 March 2021. Although Mr X claims he notified the Council of this, I have not seen any information to support this claim. There is evidence the property landlord, Mr B, contacted the Council in November 2019 to say Mr X should be made liable but no evidence of any direct contact from Mr X.
17. The Council was provided with contact details for Mr X by the landlord, Mr B. However, the Council chose to correspond only with Mr B about the liability for the business rates at the premises. It made no efforts to contact Mr X even though it had contact details for him. In response to my enquiries, the Council says it sought verification from the landlord because it was the landlord who contacted it. It has not provided a direct response to say why it did not make contact with Mr X when information was not provided by Mr B. It says the home address provided for Mr X was not registered for council tax purposes and so the information could not be verified in the normal manner.
18. I consider there was a lack of professional curiosity by the Council between December 2019 and 23 April 2020, when the first COVID-19 lockdown happened. The Council had contact information for Mr X but chose not to use it even when Mr B did not provide the information requested. It also chose not to visit the premises to establish who was trading from there. This lack of professional curiosity by the Council is fault.
19. However, I also have to consider the actions of Mr X. He argues the Council’s failure to act when Mr B contacted it has resulted in him missing out on COVID-19 grants and rate relief. I am not persuaded by this argument. When Mr X took over the lease in June 2019 it was his responsibility to notify the Council he was operating a business from the premises and ensure the correct business rates were being paid. The information provided shows that Mr X did not make any contact with the Council during the period he held the lease. Mr X is now relying on the actions of Mr B to argue he missed out on rate relief and grants. Mr X could have resolved this situation himself by contacting the Council. He was not reliant on Mr B to take action.
20. Even though I have found fault, I am not persuaded the injustice claimed by Mr X, the loss of rate relief and a COVID-19 business grant, was a direct result of the Council’s fault. If Mr X had contacted the Council directly himself anytime before he ended the lease in March 2021, then it is likely the outcome would have been different. Mr X needed to take the action to apply for rate relief and/or COVID-19 grants and there is nothing to suggest he made any enquiries or sought to do this while operating the business.
21. I am aware the Council took until November 2021 to bill Mr X and so I consider it should give consideration to allowing Mr X time to pay off the arrears if he makes a request.

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Final decision

22. I will now complete my investigation as there is no evidence of fault causing a significant injustice in this case.

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Investigator's decision on behalf of the Ombudsman