Summary: Mr X complains about the Council’s decision that he was not entitled to small business rate relief. The Council is at fault as it did not consider Mr X’s utility bills as evidence he was occupying a business unit at the time he submitted the bills. This fault did not cause injustice to Mr X as the Council has now considered the bills and it would not have made a different decision if it had considered the bills earlier. The Council delayed in responding to Mr X’s complaint at stage two of its complaints procedure which will have caused frustration to Mr X. The Council apologised to Mr X for the delay in responding to his complaint which is an appropriate and proportionate remedy for the frustration caused to Mr X.

The complaint

1. Mr X complains that the Council wrongly refused his application for small business rate relief for his property for the period 1 September to 14 September 2017 and has wrongly taken recovery action for the business rates during that period.

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The Ombudsman’s role and powers

2. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. 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)
3. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. We provide a free service, but must use public money carefully. We may decide not to start or continue with an investigation if we believe:

• it is unlikely we would find fault, or
• the fault has not caused injustice to the person who complained, or
• the injustice is not significant enough to justify our involvement.

(Local Government Act 1974, section 24A(6), as amended)

4. 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

5. I have:
• Considered the complaint and the information provided by Mr X;
• Made enquiries of the Council and considered the information provided;
• Invited Mr X and the Council to comment on the draft decision. I considered any comments received before making a final decision.

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What I found

6. Mr X owns a business premises. In May 2017 Mr X’s tenant notified the Council that they would be leaving the premises at the end of May and handing the premises back to Mr X as the landlord. This meant Mr X would be liable to pay business rates on the property. In accordance with its policy, the Council granted an empty property exemption for Mr X’s property for three months. This was due to expire on 31 August 2017 so the Council would charge business rates from 1 September 2017.
7. In August 2017 Mr X made an application for small business rates relief. The Council’s policy is to grant 100% rate relief for properties with a rateable value up to £12,000. Mr X requested the relief to start on 1 August 2017. In September 2017 the Council wrote to Mr X advising he was getting empty rates and asking him to confirm the date he moved in. Mr X did not respond to this letter. The Council notified Mr X in early October 2017 that it had rejected his application for small business rates relief. The Council said this was because the property was unoccupied so not eligible for small business rates relief.
8. The Council issued a summons and, in January 2018, obtained a liability order for the outstanding business rates. It then passed the debt to enforcement agents to collect.
9. Mr X completed an online move out form in late February 2018. On the form he said he vacated the property on 1 September 2017. The Council also received an application for small business rate relief from Mr X’s new tenant from 15 September 2017. The Council issued a new bill reflecting Mr X’s tenant’s occupation from 15 September 2017.
10. In March 2018 the Council wrote to Mr X stating its records showed his property had been empty since June 2017 and asking him to confirm he had sold the property or if he had reoccupied it and the date of occupation. Mr X wrote to the Council in late March 2018. He said the property had an empty exemption between 1 June to 31 August 2017. He also said he made an online small business rates relief application to commence on 1 September 2017. In addition, Mr X advised a new tenant occupied the property from 15 September 2017.
11. The Council sent a further letter to Mr X asking him to confirm whether the property was empty between 1 June and 31 July 2017 and whether he occupied the property after 1 August 2017. The Council also asked Mr X to confirm if he vacated the property on 1 September 2017 and it became empty. Mr X told the Council he had answered these questions in his letter of March 2018.
12. The Council notified Mr X that his account ran from 1 June to 14 September 2017 when Mr X new tenant occupied the property. Mr X’s outstanding balance was £254.13. This included the court costs as Mr X did not make any payments against the original bill.
13. Mr X wrote to the Council again to dispute his liability for the bill. The Council replied and advised Mr X’s property was empty from September 2016. This was incorrect. The Council advised it could only award small business rates relief on occupied properties.
14. The Council chased payment of the sum of £254.13 and warned it would pass Mr X’s account to enforcement agents to collect if he did not make payment within seven days. Mr X did not make a payment but he made a complaint in February 2019. The Council responded to Mr X at stage one of its two stage complaints procedure. The Council did not uphold his complaint. It asked Mr X to confirm the dates he occupied the property and provide a utility bill showing he was in occupation.
15. Mr X made an appeal to the valuation tribunal which I understand did not proceed as the valuation tribunal does not consider appeals against business rates liability. In his appeal Mr X said he provided a copy of his utility bill to the Council.
16. In April 2019 Mr X escalated his complaint to stage two and provided a copies of an electricity bill and a water bill. The Council did not consider these bills. It responded in August 2019 but did not uphold his complaint although it apologised for the delay in responding to him.
17. In response to my enquiries the Council has said it considers applications for small business rate relief on their merits using the information provided by the applicant. To satisfy the Council’s audit requirements it may require photographic evidence alongside utility bills to confirm occupation of the property.
18. The Council has said it did not grant small business rates relief as Mr X did not respond to its letter of September 2017 seeking information on the date of occupation. Mr X’s online move on form which he submitted in February 2018 stated the property was empty from 1 September 2017. Mr X has said he stated this date in error.
19. I asked the Council to consider Mr X’s utility bills which it has now done. The Council has said it would have disregarded the electricity bill as it is for the period 30 September 2017 to January 2018 which is after Mr X vacated the property. It also considers the water bill does not show Mr X occupied the property for the period in question as the bill does not show usage.

My assessment

20. It is not my role to decide if Mr X is eligible for small business rates relief for the period 1 to 14 September 2017. My role is to examine how the Council considered Mr X’s application and reached its decision not to grant the rate relief.
21. There is no evidence of fault in the Council’s decision not to grant small business rate relief in October 2017. Mr X applied for small business rates relief from 1 August 2017 and at this time he was in receipt of empty property relief. So, the Council was not at fault in seeking further information from Mr X to determine if and when he was in occupation of the property as it cannot grant small business rate relief if the property is empty. There is no evidence to show Mr X responded to the Council’s letter of September 2017 seeking further information. The Council notified Mr X in writing of its decision in October 2017 and there is no evidence of further contact from Mr X at this time. So, the Council was entitled to recover the outstanding business rates based on the information it had at that time.
22. Mr X has said the Council has wrongly charged him £130 court costs for the cost of the summons and liability order when it should have charged £103 and the Council was wrong to pass the debt to the enforcement agents to collect. I note the Council said it charged court costs of £103 to Mr X in its letter of 31 May 2018. The court costs would not have had a bearing on the Council’s decision to pass Mr X’s account to the enforcement agents as it did this to recover the outstanding business rates. But the Council should check it has charged the correct court costs to Mr X.
23. Mr X submitted a move on form in February 2018. In this form he said he moved out of the property on 1 September 2017. However, Mr X sought small business rate relief from 1 August 2017 when he made his application in August 2017. Given the conflicting information, the Council was not at fault in seeking further information from Mr X to establish when he occupied the property and determine if he was eligible for small business rate relief.
24. Mr X provided a copy of his utility bills in April 2019 when escalating his complaint to stage two. The Council did not consider these bills. The Council has said this was because Mr X did not send them to the business rates department. But the Council should have passed the bills to its business rates department to consider. It is at fault for not doing so and for failing to consider the utility bills when Mr X submitted them in April 2019. It would have also been better if the Council had sought documentary evidence of Mr X’s occupation before March 2018.
25. However, the failure to consider the utility bills in April 2019 did not cause significant injustice to Mr X to warrant a remedy. The Council has now considered the utility bills and does not consider them to show Mr X’s occupation for the period in question. So, on balance, I do not consider the Council would have made a different decision had it considered the bills in April 2019. So, I am satisfied the outcome would have been the same for Mr X.
26. Mr X has said the Council’s late decision on his utility bills prevented him from gathering further evidence of his occupation. He has said he could not take photographs of his office in situ and provide evidence from local traders. The fault by the Council did not prevent Mr X from gathering such evidence. Mr X did not respond to the Council’s letter of September 2017 seeking more information for his application. Mr X did not contact the Council again until February 2018 by which time he had moved from the property. So, I cannot conclude the fault by the Council prevented Mr X from providing evidence to support his application. Furthermore, it is still open to Mr X to provide evidence of his occupation to the Council.
27. Mr X may disagree with the Council’s decision that the utility bills do not show occupation. There is no fault as the Council has considered the bills and explained its reasons for its decision. I therefore do not have grounds to question its decision that the utility bills do not show Mr X’s occupation of the property between 1 and 14 September 2017. But the Council should consider any further evidence of occupation Mr X may provide.
28. Mr X has provided a statement from a subsequent tenant of his property. The tenant states he made a rate relief application without having to provide evidence. I do not know the facts of the tenant’s application but I will not pursue this matter further. The Council is entitled to seek evidence of an applicant’s eligibility for small business rate relief. There were discrepancies in Mr X’s application so it is not at fault for seeking evidence of his occupation.
29. The Council took nearly four months to respond to Mr X’s stage two complaint. In accordance with its complaints procedure, the Council should have responded within 20 working days. So, the delay is fault which will have caused some frustration to Mr X. The Council apologised for the delay in the stage two response which is a sufficient and proportionate remedy for the delay.

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Final decision

30. The Council is at fault as it did not consider Mr X’s utility bills as evidence he was occupying a business unit at the time he submitted the bills. This fault did not cause injustice to Mr X as the Council has now considered the bills and it would not have made a different decision if it had considered the bills earlier. The Council delayed in responding to Mr X’s complaint at stage two of its complaints procedure which will have caused frustration to Mr X. The Council apologised to Mr X for the delay in responding to his complaint which is an appropriate and proportionate remedy for the frustration caused to Mr X.

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Investigator's decision on behalf of the Ombudsman