Summary: Mr X complains a decision the Council took on business rates liability resulted in deductions from his personal pension plan by the company that manages it. There was no fault in the Council’s decision who to bill for the business rates applying to the storage units held as part of Mr X’s pension fund. It took a decision it was entitled to take. There was fault in the time the Council took to reach a settled position which caused injustice to Mr X, but the Council has already remedied this by apologising and making a payment to Mr X.

The complaint

1. Mr X complains a decision the Council took on business rates liability has resulted in deductions from his personal pension plan by the company that manages it. He blames the Council for this, as he says it went against a written assurance it made saying he is not personally liable for the bill.
2. Mr X says the Council’s actions have left him out of pocket and unable to claim business rates relief he would otherwise be entitled to because a third party has made the deductions.

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What I have investigated

3. The Ombudsman can only investigate the actions of the Council in this complaint. As the company that manages Mr X’s pension as it is not within our jurisdiction I cannot comment on its actions or hold the Council responsible for them.
4. Similarly, I cannot investigate the Land Registry or question why its records say what they do.

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The Ombudsman’s role and powers

5. 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)
6. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
7. 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)
8. The Valuation Tribunal deals with appeals against decisions by the Valuation Office Agency.

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How I considered this complaint

9. I spoke with Mr X and read his complaint to the Ombudsman. I wrote to the Council to make enquiries and reviewed the information it sent in response.
10. I have read the Valuation Tribunal’s decision on the matter subject of this complaint, although recognise that case did not directly involve the Council or Mr X.
11. I have shared my draft decision with Mr X and the Council and I invited them to comment on it.

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What I found

12. Mr X has a self-invested personal pension which is managed by a company I will refer to as Company P. Mr X’s pension holds an investment in three storage units within a larger storage facility owned by Company G. As a commercial entity the storage facility is a type of business premise.
13. The Valuation Office Agency (VOA) assesses business premises and gives them a ‘rateable value’. The business rates bill owed for the premises comes from the rateable value multiplied by an amount fixed by the government. Appeals about certain VOA decisions go to the Valuation Tribunal. Local authorities have a legal duty to collect business rates for the government.
14. In 2017, the Valuation Tribunal heard an appeal from Company G against a VOA decision. Company G said instead of the storage facility being one building for the purposes of business rates it should instead by split by the number of units. The Valuation Tribunal agreed with Company G and made an order to that effect. This meant the storage facility was split into nearly 1,900 separate units and liability for business rates passed to the person responsible of each unit.
15. The Land Registry’s records show while the owner of each unit is Company G, in some cases it has leased out units. The records show the tenant for each of the units Mr X has an investment in the following format: “Company P for the benefit of Company P pension plan – Mr X of [Company P’s address]”.
16. After the Valuation Tribunal decision, the Council at first decided to personally bill Mr X and others in the same situation for the business rates due on their units. It backdated the bills to the year 2014/15.
17. Mr X spoke to the Council in February 2018 and, because of his comments, it decided to suspend his account while it decided how to proceed. Mr X did not have to pay at this point. The Council asked Mr X for contact details for Company P and to see the Land Registry entries. Company P contacted the Council on Mr X’s behalf shortly afterwards.
18. Around six months later the Council decided to reissue the business rates bills by sending them to Company P. It addressed each bill to the tenant listed by the Land Registry. The Council wrote to Mr X in October 2018 to tell him about this.
19. Mr X complained to the Council about its decision to include his name on the bill. He felt this contradicted its earlier acceptance he was not personally liable.
20. The Council replied in May 2019 saying Company P was the “rateable occupier of the property”, but it was “necessary to include details of [Mr X] in the account description”. Mr X says this letter also makes it absolutely clear he is not personally liable for the payments.
21. The Council told the Ombudsman it addressed the letters the way it did because it matches the Land Registry entry. It also says it needed to provide a way for Company P to identify who each bill relates to as it received around 800 bills at the same time. Finally, it says addressing the bills in this way enables each investor to apply for Small Business Rates Relief, which would not be possible if it addressed the bills directly to Company P.
22. Small Business Rates Relief (SBRR) is a government initiative administered by local authorities. This removes liability for business rates in certain circumstances. In this case, where someone owns multiple business premises like storages units which have a particularly small rateable value, it applies to the main property.
23. The Council recognised in its May 2019 letter it had created uncertainty for Mr X by not reaching a settled position sooner. And it also accepted it put him to the time and trouble of having to chase it for updates. It agreed to pay him £250 for this.
24. In October 2019, Company P sent payment to the Council for the business rates bills. This included over £1,000 to settle accounts relating to Mr X’s three units. Mr X says Company P then took the same amount from his personal pension fund. The Council says the issue of whether and how Company P recovered payment for the bills from its customers is a private contractual matter between those parties.
25. Mr X also complains because of the way the Council issued the bills he cannot claim SBRR he believes he has a right to. He says Company P has to claim it on his behalf and it would be illegal for him to do so directly when he has not received a personal bill.
26. The Council points out it has already accepted Company P’s request to apply SBRR for other investors in the same situation. However, it says Mr X told it on more than one occasion he did not want SBRR applied to his account. Its records show when it raised SBRR with Company P, they discussed Mr X’s objection to it and agreed not to include him while many others had it applied. Mr X has said that there are specific reasons why he cannot claim SBRR.
27. Mr X told the Ombudsman he is unhappy about the Council’s discussions with Company P. He says the Council revealed to him it had agreed with Company P how the payments would happen. He feels the Council has concentrated on obtaining payment for the business rates bills by any means it can. Mr X suggests it included his name on the bill to ensure Company P would not object as he believes it would have if the Council billed it directly.

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Analysis

28. I read the Valuation Tribunal’s decision related to this case. I recognise how this particular ownership arrangement presented a challenge for the Council in respect of how and who to bill for the business rates due on the storage units. It is not a straightforward case and the evidence I have seen shows other local authorities across England are similarly affected.
29. The Ombudsman can normally only find fault with a decision taken by the Council if we can show it did not follow the correct process or misled itself or others. Where that has not happened that we cannot intervene, even where someone disagrees with the decision itself. This is because its staff can use their professional judgement to make decisions using their training and experience, and we are not an appeals body.
30. In this case, the Council eventually reached a position on how to issue bills for the business rates due on the storage units. This is something it is entitled to do. Mr X strongly disagrees with its stance and that is his prerogative. However, his opinion the Council is wrong does not mean it is fault.
31. I am satisfied it is not at fault for addressing bills in the way it did. The Council has provided its rationale and the basis for it. The main argument, that it addressed the bills to the legal tenant as shown on Land Registry records, is correct. The Council also considered alternatives. For example, it ruled out billing Mr X personally or Company P directly. It is clear to me from correspondence between the Council and Company P that Company P’s position is it not directly liable in its own right for the business rates.
32. Mr X feels the Council’s actions went against the letter it sent him saying he is not personally liable for the business rates. The question of who is, is not a matter for the Ombudsman. The Council has a legal duty to collect business rates. It cannot take no action and has to hold someone liable unless the Valuation Office Agency or Valuation Tribunal say otherwise. If Mr X believes his pension fund should not be liable for the business rates, he may have to take independent legal advice and should address his concerns to Company P. The exact nature of his contractual relationship with Company P will decide what happens next.
33. There is also no evidence of fault in the Council’s discussions with Company P. The Council sought payment from those pension accounts managed by Company P with a legal interest in the storage units in question. That Company P did not resist that interpretation of liability may be a matter of dispute between Mr X and it. I cannot hold the Council responsible for Company P’s decision in that regard.
34. In addition, having reviewed correspondence between the Council and Company P, I cannot see anything stopping SBRR being applied to the accounts for the three units Mr X has an investment in. Many other investors have had it applied. The Council passed on Mr X’s objections about SBRR to Company P and it chose not to ask for it to be applied to Mr X’s account. If Mr X wants SBRR applied to the accounts in his pension fund he needs to request it from the Council or Company P. I understand it can apply retrospectively.
35. While I do not uphold Mr X’s substantive complaint, there was some fault in this case. There was a period in 2018 where Mr X had to wait an unreasonable amount of time for the Council to clarify its position on who it intended to bill for the business rates. The Council recognised this in its own complaints process and sought to remedy any injustice caused to Mr X by apologising and paying him £250.
36. I consider this to be a satisfactory remedy. £250 is near the top of the range our guidance on remedies recommends for cases of uncertainty, frustration and where someone has been put to the time and trouble of complaining to achieve something that should have happened earlier. I do not recommend any further remedy for the injustice caused to Mr X.

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Final decision

37. I have completed my investigation on this complaint. There was no fault in the Council’s decision about who to bill for the business rates applying to the storage units held as part of Mr X’s pension fund. It took a decision it was entitled to take. There was fault in the time the Council took to reach a settled position, which it has already remedied this by apologising and making a payment to Mr X. This complaint is partially upheld.

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Investigator's decision on behalf of the Ombudsman