The Ombudsman's final decision:
Summary: Mr B complained the Council wrongly set up a business rates account for an industrial unit that his business was not occupying. We find the Council was not at fault for setting up the business rates account. However, it was at fault for its communication about whether to put enforcement action on hold. It apologised for this and confirmed it had reminded officers to provide clear instructions to customers. This is a suitable remedy for the injustice caused by fault.
- Mr B complained the Council wrongly set up a business rates account for an industrial unit that his business was not occupying. He says the Council accepted at face value a message from an employee and did not act with due care and attention to verify the facts. He adds the Council failed to notice that two occupants were paying for the same unit. Finally, he says the Council failed to respond to an email about the matter and unreasonably sent enforcement agents to the premises.
- Mr B says the Council’s actions have caused enormous distress and resulted in avoidable enforcement agent fees.
The Ombudsman’s role and powers
- 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)
- 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)
How I considered this complaint
- I considered information Mr B submitted with his complaint. I made written enquiries of the Council and considered information it provided in response.
- Mr B and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.
What I found
- Business rates is a local tax on business premises. The Valuation Office Agency (VOA) keeps the business rating list and decides if a property should be rated. The VOA also decides the rateable value of the premises, and the date each premises should enter and leave the list. Local authorities are responsible for collecting business rates.
- A local authority can get a liability order from the Magistrates Court for non-payment of business rates. A liability order gives a local authority legal powers to take enforcement action to collect the money owed.
Taking Control of Goods Regulation 2013
- Local authorities may ask enforcement agents to attend the business premises and seize goods if they have a liability order from the Magistrates Court.
- The Taking Control of Goods (Fees) Regulations 2014 set out the fees enforcement agents can charge when recovering debt and the three stages they must follow:
- The Compliance Stage – an enforcement agent must issue a notice of enforcement seven clear days before they take control of the goods. The fee for this stage is £75.
- The Enforcement Stage – this stage starts once an enforcement agent has made a first visit. At this visit they can take control of the goods. Once they have done this they must give the debtor a notice. The fee for this stage is £235. If outstanding debts are more than £1500, enforcement agents can charge a further 7.5% of the amount outstanding over £1500.
- The Sale or Disposal Stage – this stage starts once an enforcement agent has taken control of the goods. They must then allow seven clear days between the removal of goods and their sale. In this time an enforcement agent must value the goods and send a copy to the debtor. The fee for this stage is £110.
- Mr B is an employee of a business (Business A) that operates from an industrial unit and pays business rates.
- The landlord’s management agent contacted the Council in May 2019 and confirmed that Business A, along with two other businesses, was operating on the same floor. However, the unit numbers were not provided.
- In June 2019, an employee of Business A contacted the Council and said it was operating from unit two. The Council therefore set up a business rates account for unit two. Business A set up a direct debit to pay the business rates for unit two.
- The Council issued a credit note for the business (Business B) that had previously been paying business rates for unit two. The Council explained to Business B that it had registered Business A as the new occupier for the assessment.
- The landlord’s management agent contacted the Council in August and September 2019 and provided a floor plan and a copy of the lease. This confirmed that Business A were the occupiers of unit one. The Council therefore opened an account for unit one and sent a bill in the post.
- The Council emailed Business A on 14 October and said it had not received any payment for unit one. Business A responded to the Council on 15 October and said it had not received the bill. It said, “can you please send them out to the address below but address them to Finance to ensure that we receive them please”. The Council did this the following week.
- As the Council did not receive payment, it called Business A and left a message. It sent a summons for non-payment in November 2019. As it still did not receive a response, it applied to the Magistrates Court for a liability order. This was issued in December 2019.
- The Council sent a notice of enforcement to Business A in January 2020. Business A called the enforcement agent’s call centre when it received the notice and asked for more information. The call operator told Business A to contact the enforcement agent directly regarding payment.
- The enforcement agent visited Business A on 14 January to collect the enforcement agent fees. Business A called the Council on the same day and said it was only liable for one assessment, and that it had been charged twice. The Council said it had sent correspondence about unit one and had not received a response. It said it would contact the enforcement agent to discuss putting enforcement action on hold. The Council did this, but the enforcement agent said it had been told it could collect its fees.
- Business A emailed the Council on 21 January and confirmed it had been paying business rates for unit two. It also said that the landlord’s management agent had previously informed the Council it was occupying unit one.
- The Council closed the account for unit two and transferred the money Business A had paid on unit two to unit one.
- The enforcement agent visited Business A on 28 January collect the rest of the outstanding debt. An employee from Business A called the Council and said she was told enforcement action would be put on hold. The Council said it could find no notes on the system to support that enforcement action would be put on hold. It also said it would respond to Business A’s email from 21 January.
- The Council responded to Business A’s email on the same day. It said:
- It opened an account for unit two because someone from Business A called and advised that it was liable for unit two.
- The landlord’s management agent advised it that Business A was liable for unit one. There was no mention in the correspondence that it was incorrectly billing business A for unit two, so an additional account for unit one was set up.
- It acted in line with legislation by sending bills and reminders for unit one. None of the bills were returned as undelivered.
- The credit from the closed account on unit two was transferred to offset the debt for unit one. There was a remaining balance for unit one that remained payable.
- Business A emailed the Council on 6 February and said it was disappointed with how it had handled the matter. It said it had received confirmation from Business B that it was as fully up to do date with its payments. Therefore, the Council had ignored that it was accepting two lots of payments for the same unit. It also said the Council told it that enforcement agents would not visit the business premises again until the matter had been resolved.
- The Council responded to Business A’s email on 28 February and said it had no reason to question the additional liability as it was raised as a direct request in the telephone call from June 2019. It also said companies can often operate from multiples site within a single property. It said it did not received payment from Business B for the same assessment and period. Finally, it said that it contacted the enforcement agent on 14 January who said it had permission to collect its fees that were due.
- Mr B complained to the Council. He said it:
- Had accepted at face value a message from an employee and had failed to verify the identity of the caller.
- Failed to notice Business B was listed as the unit two occupants.
- Ignored information from the landlord’s management agents.
- Failed to respond to an email from 15 October 2019.
- Wrongly sent the enforcement agent to the business premises on two occasions.
- The Council issued it stage one response to Mr B’s complaint. It said it had previously responded to the complaint on 28 February. Mr B escalated his complaint to stage two of the Council’s complaints procedure. He said it had failed to respond to all his complaints. He also said because of the Council’s failures, Business A was significantly out of pocket because of the enforcement agent fees it had to pay.
- The Council issued its stage two response to Mr B’s complaint. It said:
- It had no reason the question the information supplied in the telephone call from June 2019 as there was no liability for Business A at unit two as the VOA had only just split the assessments.
- The contact it received from the landlord’s management agent did not refer to unit two.
- It sent a further copy of the bill in the post after Business A’s email of 15 October 2019 and therefore no further response was required.
- Enforcement agent fees were collected correctly.
- It did not provide clear communication regarding putting enforcement action on hold. However, even if enforcement action was put on hold, the enforcement agent would have still re-attended to collect any further monies after the hold had expired. It also confirmed the enforcement agent’s re-attendance did not incur any additional fees.
- It apologised for its communication failures and confirmed it had reminded relevant officers to provide clear instructions to customers.
- Mr B remained dissatisfied with the Council’s response and referred his complaint to the Ombudsman.
- Mr B says the Council accepted a face value a message from an employee and did not act with due care and attention in verifying the facts. The Council does not have a recording of the telephone call and so I do not know exactly what was said in the call. However, there is no dispute that it was an employee of Business A that provided the Council with the information. There is no fault in the Council accepting the message from the employee because there was no liability for Business A at unit two at the time. Business A also set up a direct debit and failed to notice the bill was addressed to unit two.
- Mr B says the Council failed to notice that two occupants were paying for the same unit. However, after the Council received the telephone call in June 2019, it sent a closing bill to Business B. Therefore, it did not receive payment from two occupants for the same unit.
- The Council did receive further correspondence from the landlord’s management agents stating that Business A occupied unit one. However, there was no mention in the correspondence that the Council had been incorrectly billing Business A for unit two. The Council is also correct that companies can operate from multiple sites within the same property. Therefore, it was not obvious at the time that the Council had been given incorrect information.
- Mr B says it was inappropriate for the Council to start enforcement action when Business A had told it that it had not received its postal correspondence. He also says the Council failed to respond to an email about the matter. Business A emailed the Council on 15 October 2019 and asked it to send the bills to the same postal address but address it to the finance department. Although the Council did not send a further email, it followed Business A’s instructions by sending a further copy of the bill in the post for the attention of the finance department. The Council also called Business A on 11 November 2019 and left a voicemail for the accounts department. Business A did not return the Council’s call. Therefore, there were missed opportunities for Business A to resolve the issue.
- The Council acted in line with legislation by sending bills, reminders, and the court summons to Business A. The bills are correctly addressed, and they were not returned to the Council as undelivered. The Council has also provided postal documents from the Royal Mail to show the bills were collected from its offices. Therefore, I find it more likely than not that the Council sent the bills to Business A.
- The Council got a liability order from the Magistrates Court and therefore it was not wrong for it to send the account to the enforcement agent. Business A spoke to an operator at the enforcement agent’s call centre after it received the enforcement notice, and it was advised to make direct contact with the enforcement agent about payment. Mr B says he was told he would receive a call back. However, there is no evidence of this. Business A did not make any further contact with the enforcement agent or the Council. Therefore, the enforcement agent was not wrong to attend the business premises on 14 January 2020 to collect its fees.
- The Council was at fault for its communication with Business A about putting enforcement action on hold. The notes of the call on 14 January 2020 show that the Council told Business A it would contact the enforcement agent to discuss putting enforcement action on hold. However, the enforcement agent said it was told it could collect its fees. The Council failed to clarify this with Business A which caused unnecessary confusion.
- The Council accepted its fault in its complaint response and apologised. It also said it had reminded officers to provide clear instructions to customers about putting a hold on recovery action. This is a suitable remedy.
- I have completed my investigation. There was fault by the Council which caused injustice to Mr B. I am satisfied the Council has taken suitable action to remedy that injustice.
Investigator's decision on behalf of the Ombudsman