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London Borough of Croydon (19 012 423)

Category : Benefits and tax > Other

Decision : Not upheld

Decision date : 31 Mar 2020

The Ombudsman's final decision:

Summary: Mrs X disputes liability for business rates as she did not receive the summons so could not dispute the bill in court. There is no fault by the Council. It sent the bills and the summons to the address liable for business rates and so acted without fault. Mrs X could also have checked her account online or by telephoning the Council.

The complaint

  1. The complainant, who I shall refer to as Mrs X, complains the Council did not tell her of a business rate debt before the liability order went to court. She is represented Mr Y.

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The Ombudsman’s role and powers

  1. 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)
  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. 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

  1. I read the papers put in by Mrs X and discussed the complaint with her representative.
  2. I considered the Council’s comments about the complaint and any supporting documents it provided.
  3. I gave the Council and Mrs X the opportunity to comment on my draft decision.

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What I found

  1. Business rates are a tax on local business premises. The Council’s website says ‘from 1 April 2008 no business rates are payable for the first three months that a property is empty, after that most properties are liable for 100% of the basic occupied business rates. If the three month empty period has already been granted, full business rates is payable’. The Council’s website says that business owners can check their business rates balance online, 24 hours a day.
  2. The Council’s website explains there is also Small Business Rates Relief (SBRR), but this is not available on empty properties.

Key facts

  1. Mrs X rang the Council on 30 July 2018, to tell the business rates department she was the leaseholder from 18 July 2018. She wanted to use the property, which had been empty, for a nursery.
  2. The Council’s notes of this telephone conversation say ‘Mrs X has taken lease from 18 July and property is currently empty’. The Officer explained that a business could only qualify for the SBRR once the property was occupied.
  3. The Council sent the bill for business rates to the property she had leased. The Council sent a reminder in September and issued a summons on 4 October 2018. The court granted a liability order on 30 October 2018. The Council sent a business rates bill for the 2019/2020 year to the property in March 2019.
  4. The Council has notes of a number of telephone calls from Mrs X. On 7 March she was told the charge for an empty property was correct. The Officer noted that Mrs X would not give a contact address. On 8 March 2019 the Council told Mrs X again there was no discount for empty properties and she said she would contest the charge.
  5. On 16 April 2019 the business rates officer noted that ‘Mrs X wanted an email sent to her containing all bills previously sent to the property. The officer advised her that she could sign up and view the information online, but Mrs X did not want to. Mrs X would not give her home address for the service of bills and said she does not receive anything at the property address as it is empty’.
  6. The notes of the call on 17 April 2019 say ‘the property has been empty since Mrs X got it and the officer confirmed the Council told Mrs X previously that business rates are due on empty properties’.
  7. Mrs X told the Council she had ended the lease on 2 May 2019, after she did not get planning permission to use the property as a nursery. She was again told that empty properties had to pay business rates and that SBRR was only paid if the business was trading.
  8. Mr Y says that Mrs X made the telephone calls the Council refers to but ‘denies the statements made by the Council are accurate representations of those calls’.

My analysis

  1. Mrs X complains that she could not contest the business rates debt in court as she was not receive the summons. Mrs X says the Council’s correspondence about the business rates went to the flat above the shop. Mr Y told me on the telephone that Mrs X did not visit the property to pick up the post but has said that Mrs X’s spouse visited the property.
  2. I have seen copies of the bills, reminder letters and summons the Council sent to the property address. I can find no fault in the Council’s addressing of the invoices, reminder letters and summons. The Council addressed them to the property business rates were due on and Mrs X did not give the Council an alternative address. The Council’s notes of telephone conversation clearly say that Mrs X did not want to give the Council her home address. Mrs X also could have checked her account online.
  3. Mr Y said the Council sent the invoices to the correct address but they were delivered to the wrong letter box, that of the flat above the shop premises she had leased.
  4. If the Council sent the invoice and summons to the wrong address, then this would have been an error by the Council. However, this was not the case. The Council sent the invoice to the correct address.
  5. For a document to be effective it must be served on a person. Documents are served under the Local Government Act 1972 (Section 233). This says that a document may be served on a person by delivering it to them (in person), leaving it at their proper address or sending it by post to their proper address. The proper address is the last known address. There is no need to use registered or recorded post.
  6. I can find no fault in the Council’s actions. The Council sent the invoices and summons to the address the business rates were due on. The Council’s website gives details of how business rates payers can check their account online and Mrs X did not give an alternative address. There was no way the Council could have known that Mrs X was not receiving post at the address until after the liability order was granted.
  7. Mrs X says the Council had her home address, as the planning application she put in included this. However, I cannot see why the Council would have used this address as it sent the correspondence to the business address and did not know that Mrs X was not picking up the post.
  8. I understand Mr Y’s argument is that the postman delivered the letters to the wrong letterbox. Firstly, there is no independent evidence to show which letterbox the post was delivered to so there is no way to confirm what Mr Y says. Secondly, the document is legally served when it is posted to the correct address, which the Council did. And thirdly, I cannot investigate the postal service so can take no view on what happened after the Council posted the letter. So, I can find no fault by the Council on this point.
  9. I understand that Mrs X could not dispute liability for the business rates in the magistrates court. But, I cannot find fault by the Council in the process of billing and sending out the summons. So, I cannot say it was the Council’s fault that Mrs X was unable to attend court. The liability order is a matter determined in the courts and so is outside the Ombudsman’s jurisdiction.
  10. Mrs X was also correctly told the property would not qualify for an exemption from business rates or SBRR. There is no fault by the Council on these points.

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Final decision

  1. I have completed my investigation of this complaint. This complaint is not upheld as I have found no evidence of fault by the Council.

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Investigator's decision on behalf of the Ombudsman

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