Summary: Mr C complains about the way the Council billed and sought to recover business rates including a delay in the refund process which he says caused him unnecessary time, trouble and distress. The Ombudsman has found fault by the Council but considers the agreed actions of £300 and some service improvements are enough to provide a suitably remedy.

The complaint

1. The complainant, whom I shall refer to as Mr C, complains about the way the Council billed and sought to recover business rates including issuing summonses and a delay in the refund process for the period from 2015. Mr C says because of the Council's fault he has suffered unnecessary time, trouble and distress.

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The Ombudsman’s role and powers

2. 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)
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)
4. The law says we cannot normally investigate a complaint when someone can appeal to a tribunal. However, we may decide to investigate if we consider it would be unreasonable to expect the person to appeal. (Local Government Act 1974, section 26(6)(a), as amended)
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. I read the papers provided by Mr C and discussed the complaint with him. I have considered some information from the Council and provided a copy of this to Mr C. I have explained my draft decision to Mr C and the Council and considered the comments received before reaching my final decision.

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What I found

Background

7. Non-domestic rates or business rates is the local tax on business premises. The primary legislation for non-domestic rates is the Local Government Finance Act 1988. The main secondary legislation concerned with collection and recovery is The Non-Domestic Rates (Collection and Enforcement) (Local Lists) Regulations 1989 and as amended.
8. The Valuation Office Agency (VOA) keeps the business rating list. The VOA decides if a property should be rated, the rateable value and the date each property enters and leaves the list.  If someone wants to challenge the VOA’s decisions, they have the right of appeal to the Valuation Tribunal.
9. The question of liability is decided in the magistrates’ court, as a defence against the grant of a liability order. Once the existence of a debt has been decided by the court, this is not a matter the Ombudsman can investigate for the reason set out at paragraph 3 above.

Key events

10. The Council has provided a detailed chronology of its billing and recovery actions in relation to three accounts for Mr C during the period 2015 to 2018. The Council has also provided a copy of the bills, reminders, summonses and credit notices issued.

Account 1

11. The Council sent a bill dated 20 April 2015 to Mr C for £3,528.09. This was addressed to a unit at the property which was the subject of the business rates.
12. The Council sent a bill dated 10 March 2016 to Mr C at the same address for £2,250.60.
13. The Council sent bills dated 2 and 15 December 2016 for £4,245.89 and £2,296.26 to a new address for Mr C. This was the registered address held at Companies House until November 2017 for Mr C’s business.
14. The Council sent a reminder notice to Mr C at the new address dated 13 February 2017 for £2,296.26.
15. Mr C was sent summonses dated 9 June, 8 and 19 September 2017 for £2,296.26 plus costs. The Council says a liability order was granted on 4 May 2018.
16. The Council sent a copy bill dated 8 June 2018 to Mr C. The Council sent a reminder notice dated 11 June 2018 for £2,296.26.
17. The Council sent a revised bill dated 21 June showing a credit on the account. The Council issued a credit notice and refund form to Mr C on 4 July 2018 for £225.60. These were sent to Mr C’s old address.

Account 2

18. The Council sent a bill dated 20 April 2015 to Mr C for £2,693.49. This was addressed to a unit at the property which was the subject of the business rates.
19. The Council sent a bill dated 10 March 2016 to Mr C at the same address for £1,718.20.
20. The Council sent bills dated 2 and 15 December 2016 for £3,243.52 and £1,755.09 to a new address for Mr C. This was the registered address held at Companies House until November 2017 for Mr C’s business.
21. The Council sent a reminder notice to Mr C at the new address dated 13 February 2017 for £1,755.09.
22. Mr C was sent summonses dated 9 June, 8 and 19 September 2017 for £1,755.09 plus costs. The Council says a liability order was granted on 4 May 2018.
23. The Council sent a copy bill dated 8 June 2018 to Mr C. The Council sent a reminder notice dated 11 June 2018 for £1,755.09.
24. The Council sent a revised bill dated 21 June showing a credit on the account of £161.04. This was sent to Mr C’s old address.

Account 3

25. The Council sent a bill dated 20 April 2015 to Mr C for £1,441.58. This was addressed to a unit at the property which was the subject of the business rates.
26. The Council sent a copy bill dated 21 October 2015 to Mr C at the same address for the same amount.
27. The Council sent a bill dated 10 March 2016 to Mr C at the same address for £919.60.
28. The Council sent bills dated 2 and 15 December 2016 for £1,735.46 and £938.83 to a new address for Mr C. This was the registered address held at Companies House until November 2017 for Mr C’s business.
29. The Council sent a reminder notice to Mr C at the new address dated 13 February 2017 for £938.83.
30. Mr C was sent summonses dated 9 June, 7 July, 8 and 19 September 2017 for £938.83 plus costs. The Council says a liability order was granted on 4 May 2018.
31. The Council sent a copy bill dated 8 June 2018 to Mr C.
32. The Council sent a revised bill dated 21 June showing a credit on the account of £86.70. This was sent to Mr C’s old address

Mr C’s contact

33. Mr C disputed his liability for business rates in April 2015 and advised the Council the properties were tenanted. The Council sought a copy of the relevant lease agreements in May. Mr C provided a copy of the Licences to Occupy to the Council in May.
34. The Council sought clarification about the numbering of the units from Mr C in June. Mr C provided an annotated plan of the building setting out the numbering of the units and their location and occupancy.
35. Mr C contacted the Council in April 2016 to say he had paid the first instalment for all three accounts in good faith but that future bills should be addressed to the respective companies as per the licences previously provided. Mr C suggested the Council should also apply Small Business Rate Relief and issue updated invoices. Applications for Small Business Rate Relief were made by the occupiers through Mr C’s firm.
36. Mr C contacted the Council in May to confirm his understanding from the case officer that no reminders would be sent on the accounts as they were on hold.
37. Mr C contacted the Council in October 2016 to say he had vacated the premises at the end of August and provided the new owner’s details. Mr C sought the final accounts with Small Business Rate Relief applied as appropriate. Mr C sought a refund of the payments he had made and provided his new address.
38. The Council responded to Mr C in December and apologised for the delay. The Council said it would send revised bills to his new address and explained why it could not apply Small Business Rate Relief. The Council subsequently sent a detailed breakdown to Mr C in December for the three accounts and the amounts outstanding. Mr C disputed the rateable values used in December.
39. Mr C contacted the Council in February 2017 to explain he had previously provided the information now being requested. The Council responded in March to say it had not received the licences for the relevant periods and to say it would be seeking liability orders.
40. Mr C contacted the Council in June and highlighted his previous correspondence including the licence agreements he had previously provided. He sought a cancellation of the hearing due at the magistrates’ court.
41. The Council withdrew the summonses due to be heard on 29 June and waived the costs. The Council sought a copy of licenses to occupy for a particular company and it would then amend the accounts as necessary.
42. Mr C contacted the Council in July with the requested licences and sought a refund. Mr C contacted the Council again in July as it had reissued a new summons.
43. The Council wrote to Mr C in September to say it would process any refund due after receipt of the licenses. Mr C replied the same day and provided a copy of his earlier emails in July providing the information.
44. The Council sought further information from Mr C in October which he provided.
45. The Council contacted Mr C in March 2018 and apologised for the delay. The Council explained the licences provided for one company did not show a registered address and the Council had been unable to locate such a company. The Council sought contact details and proof of rental income. The Council wrote to Mr C in June 2018 to apologise for the delay in dealing with his queries and to confirm it had put the accounts on hold.
46. Mr C complained to the Council in October. The Council responded in October to confirm there was now a credit amount for each of the three accounts and that it had sent him credit notices but he had not responded. The Council sought his bank details to make the payment. Mr C provided his details. Mr C sent a further email in October chasing the expected refund. The Council confirmed on 5 November it was processing the refund.

Analysis

47. As set out above, the question of liability is decided in the magistrates’ court, as a defence against the grant of a liability order. The Ombudsman would not normally investigate complaints where liability is disputed and there has been no court hearing. If a person has paid the debt to stop court action, they have accepted liability and deprived themselves of the opportunity to argue their case at court. If a court has made a liability order at a hearing where the person was present (or not present but aware of the proceedings) and the person continues to dispute liability, this would be caught by the restriction at paragraph 3 above.
48. In this case the Council has accepted Mr C is not liable for the business rates and has now refunded the initial payment he made to each of the three accounts. It is not clear from the chronology and documents provided why it took the Council so long to reach this decision. The correspondence provided would suggest several delays by the Council in responding to Mr C’s queries and progressing the matter and that it sought information he had previously provided. This is fault.
49. The Council sent two credit demand notices to Mr C on 21 June 2018 for two of the accounts and on 4 July 2018 for the third account. Mr C did not receive the notices. The Council has explained that its system automatically produces a refund form when a credit notice is generated. The Council has confirmed the address used was entered on its business rates system on 21 June 2018 with an entry stating it was the address of the registered office for the business. The Council completed a review of the information held on Companies House during its consideration of Mr C’s complaint and found this was not the case and the address had been changed in November 2017. The Council in its complaint response to Mr C in February 2019 accepted this was a regrettable error on its part and that the issue should have been identified when Mr C contacted it in October 2018. The Council apologised to Mr C and offered £150.
50. The Council’s actions of a refund of the amounts paid by Mr C, apology and offer of £150 go some way in providing a remedy. However, I consider a further remedy is needed given the avoidable and significant delay involved and the amount of time and trouble Mr C has spent in trying to resolve the matter.

Agreed action

51. The Council will:
1. pay Mr C £300 within one month of my final decision in recognition of his time and trouble and distress in pursuing the matter;
2. review its procedures and report back to the Ombudsman within three months of my final decision to ensure information provided in future liability disputes is accurately recorded; and
3. review its procedures and report back to the Ombudsman within three months of my final decision to ensure future cases are progressed in a timely manner.

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Final decision

52. I have completed my investigation as I have found fault by the Council but consider the agreed action above is enough to provide a suitable remedy to Mr C.

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Investigator's decision on behalf of the Ombudsman