Summary: Mr H complains about the Council’s recovery action for business rates on a property he had given up the lease on. And that it has not paid him the remedy it had offered in its complaint response. Our decision is we agree with the Council’s analysis of fault and remedy. We recommend it contacts Mr H again to offer the remedy.

The complaint

1. The complainant, whom I shall refer to as Mr H, says the Council pursued him for business rates he did not owe. It accepted this in a complaint response. But it has since not paid him the remedy it offered.

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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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. If we are satisfied with an organisation’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

4. As part of the investigation, we have:
• considered the complaint and the documents provided by Mr H;
• made enquiries of the Council and considered its response;
• spoken to Mr H;
• sent my draft decision to Mr H and the Council and considered their responses.

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What I found

Legal and administrative background

Business rates

5. Business rates is the local tax on business premises. The primary legislation for non-domestic rates is the Local Government Finance Act 1988.
6. Before anyone can be pursued for business rates, a local authority must issue a demand with the ratepayer’s name on. They must issue at least one reminder before issuing a summons for a liability hearing at the magistrates’ court.

Land Registry

7. HM Land Registry is a government department that registers the ownership of land and property in England and Wales. Anyone buying or selling land, property or long leasehold must register any new interest. The Registry’s record is available for the public to search.

What happened

8. Mr H used to hold the lease on a business property. In the early part of 2019 he advised his landlord he wanted to surrender the lease.
9. In September, the Council’s files note the account was transferred to the property’s owner. But it issued a business rates demand to Mr H. In November it checked the Land Registry’s records. These said Mr H was the leaseholder. So it issued a bill for the property to Mr H. The Council then took recovery action, resulting in a liability order at the beginning of 2020. It referred the account to its enforcement agents.
10. At the beginning of March Mr H wrote to the Council – he says this was after he received a business rate notification. He advised he had surrendered the lease.
11. In April the Council checked the Land Registry. This record said Mr H was still the leaseholder. The Council wrote to Mr H, using the address he had given in his letter, advising it needed some documents from him confirming he had surrendered the lease. The Council has no record of a reply.
12. In early 2021 a new leaseholder contacted the Council, attaching a tenancy agreement which started in June 2020. The Council amended Mr H’s business rates account and issued a revised bill for a reduced amount.
13. The Council’s next recovery action was to refer Mr H’s business rates account to its enforcement agents in October 2022. The Council spoke to somebody acting on behalf of Mr H (whom I shall refer to as Mr J).
14. In January 2023 the Council received an email about Mr H’s business rates liability. It carried out a new Land Registry search the following day. It emailed Mr H and the landlord of the property asking for further information to confirm the change in liability.
15. A few days later enforcement agents acting for the Council clamped Mr H’s car. Mr H paid the outstanding business rates balance to the enforcement agents.
16. Shortly after, the landlord emailed the Council, advising Mr H had surrendered the lease in May 2019. The landlord attached documents relating to this. The Council responded asking for more information.
17. In April Mr H complained. The Council’s responses noted its confusion about liability at the property. It asked Mr H to accept its apologies for its error and for any inconvenience this had caused. It asked Mr H to send it his bank account details so it could process a refund.
18. The Council says, shortly after this, its enforcement agent refunded its costs to Mr J’s bank account.
19. In June Mr H complained at the second stage of the Council’s procedure. He asked for an immediate refund and compensation. The Council’s responded initially to advise it had not been able to process the refund as it did not have Mr H’s bank account details.
20. The Council’s response at the second stage of its complaints procedure acknowledged a delay responded to the documents that were sent to it in January 2023. It offered Mr H £500 in recognition of the unnecessary stress and anxiety the delay had led to. It also advised of changes it had made to its processes and training of staff to deal with the faults his complaints had identified.
21. In July, after the response, Mr H provided bank details of a third party. The Council’s business rates team said it could not pay the refund to a third party. Mr H sent his bank details, which the Council acknowledged receipt of.
22. In November Mr H complained to the Ombudsman. Part of his complaint was the Council had not paid the remedy it had offered.
23. The Council’s records show it did not make the refund to Mr H’s business rates account until December 2023. It also noted it had not sent Mr H the payment it had offered.
24. In response to my enquiries the Council advised it contacted Mr H in January 2024 advising it needed recent bank account details (the details he sent were not current). Alternatively it could send Mr H a cheque if he provided with a postal address. It noted Mr H had not responded to that email.

Analysis

25. The Council has recognised fault in the complaint, starting from January 2023, when it delayed responding following being provided with information.
26. Before that, I can see from its records that the Land Registry searches the Council made showed Mr H still as the leaseholder. So I cannot criticise the Council for wanting documentary evidence to show that information was incorrect. I can see it emailed Mr H April 2021. Unfortunately it did not receive a response to that email. So my decision is I agree the fault by the Council starts in January 2023, and not earlier.
27. Given the above analysis, my decision is the symbolic payment the Council has offered Mr H is in line with the Ombudsman’s Guidance on Remedies. So I am not making any recommendations for a further personal remedy.

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Agreed action

28. I can see on the Council’s file that it did send Mr HH the January 2024 email. It says it has received no response. I ask the Council to, within one month of my final decision, to email Mr H again setting out his options for it paying him. The Council has agreed to do this.

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Final decision

29. I uphold the complaint, as there was fault by the Council. But I have not recommended a remedy, as my decision is the what the Council has already offered is suitable.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman