Summary: Ms X complained on behalf of Company Y. She complained the Council wrongly pursued Company Y for unpaid business rates for an office it occupies. She also complained about poor communication from the Council. We found fault by the Council on both matters. The Council agreed to apologise, refund the money paid by Company Y and make a symbolic payment in recognition of the injustice caused to Ms X in pursuing this matter.

The complaint

1. Ms X complained on behalf of Company Y. She complained the Council wrongly pursued Company Y for unpaid business rates for an office the business occupies. Ms X states the unpaid business rates are for a period prior to Company Y occupying the premises. Company Y paid the debt when pursued by the Council’s enforcement agents and Ms X would like the money refunded. Ms X also complained about poor communication from the Council on this matter.

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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. I considered evidence provided by Ms X and the Council as well as relevant law, policy and guidance.
5. Ms X and the Council had an opportunity to comment on my draft decision. I considered any comments before making a final decision.

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What I found

6. Regulations set out how councils must collect payments of business rates and how they can recover any debt. (Non-Domestic Rates [Collection and Enforcement] [Local Lists] Regulations 1989)
7. The law also controls how enforcement agents are allowed to recover debts. (Tribunals, Courts and Enforcement Act 2007)
8. The business rates bill for the year is due on 1 April. A council will usually collect this in monthly instalments. If the ratepayer misses paying an instalment, the council will send them a reminder. If the ratepayer does not pay, or misses a second payment, it can ask them to pay the entire outstanding balance (that is the full amount for the rest of the year).
9. To recover unpaid business rates, a council must ask the magistrate’s court for a liability order against those it thinks owe it the money. Once a council has got a liability order from the court, it can take action to recover the money and any court costs owed.
10. A liability order means it can:

• use enforcement agents;
• apply to make someone bankrupt; or
• ask a court to consider sending the person who owes money to prison because they have not paid.

What happened

11. Company Y occupied offices 2,3,5, and 6 in building Q.
12. In August 2023 Company Y began to occupy office 1. Ms X told the Council.
13. In May 2024 Company Y began to occupy office 4. Ms X told the Council. Company Y now occupied all the offices in building Q.
14. In July Ms X asked the Council to confirm there were no summons or court action pending for any of Company Y’s business rate accounts for offices in building Q. The Council did not inform Ms X of any summons or court action.
15. On 30 July Ms X told the Council Company Y had received two bailiff letters for unpaid business rates for offices 1 and 3. She said the Council’s enforcement agents attended the company’s premises and the company paid £928.95 for unpaid business rates for office 1. The company did so to prevent the enforcement agents damaging its reputation in front of staff. During the visit the enforcement agents said the debt for office 3 had been closed.
16. Ms X also asked the Council to merge the accounts for the offices in building Q into one account as Company Y now occupied all the offices in the building.
17. The Council did not reply and so in August Ms X made a stage one complaint.
18. The Council replied later that month. It said there was no summons or court action on any of Company Y’s business rates accounts. It asked Ms X for information about when Company Y began to occupy offices 1 and 4. It also told her she would need to contact the Valuation Office to merge all the offices into one business rates account.
19. Ms X replied. She told the Council Company Y paid £928.95 for business rates debt for office 1. She also said a business rate debt for £1627.55 for office 3 was cancelled. She asked the Council why its reply to her complaint did not address her concerns about poor communication. Ms X did not receive a reply.
20. In September Ms X asked the Council to escalate her complaint to stage two.
21. In late September the Council replied. It apologised for the delay in replying to Ms X. It said it could not find a business rates account for office 3 in Company Y’s name. It asked Ms X to provide further details of the debt it paid. It also advised Ms X on how to request the Valuation Office merge Company Y’s business rates accounts or it suggested a council inspector could visit and then contact the Valuation Office.
22. On 1 October Ms X told the Council the name and account number for the business rate debt it paid for office 1.
23. On 15 October Ms X chased up a reply from the Council.
24. On 1 November the Council replied to Ms X. It apologised for the delay and explained it was waiting for information from its enforcement agents. It said Company Y paid £310 to its enforcement agents for the debt relating to office 1.
25. On 5 November Ms X told the Council it was wrong, and Company Y had paid £928.95.
26. On 12 November Ms X asked for confirmation that her complaint would be considered at stage 2.
27. On 19 November Ms X chased the Council for a reply.
28. On 22 November the Council replied. It said it agreed Company Y paid £928.95. It said the amount was made up of £523.92 for the business rates debt, £95 court costs and £310 for enforcement agent fees. It told Ms X it would refund the cost of the enforcement agent fees.
29. On 26 November Ms X told the Council the debt related to a different tenant of office 1 and so Company Y should receive a full refund. The Council did not reply.
30. Unhappy Ms X complained to the Ombudsman.
31. We made enquiries of the Council. It told us:
• the business rate accounts for office 1 and office 4 are not in Company Y’s name.
• the bill paid by Company Y was for office 1. Company Y was not the liable business. The debt related to business rates from 1 April 2024.
• a Liability Order was granted to it for unpaid business rates for office 6. The Liability Order was in the name of Company Y.

Finding

32. Company Y moved into office 1 in August 2023. Ms X told the Council however it did not update its records. This is fault.
33. The Council does not have Company Y recorded as liable for business rates for office 1. A liability order for unpaid business rates for office 1 has not been issued to Company Y. However its enforcement agents pursued Company Y for unpaid business rates. This is fault.
34. As a result Company Y paid £928.95 to the Council’s enforcement agents. Its enforcement agents also attended Company Y’s premises to recover the debt. This has caused financial disadvantage and distress. This is injustice.
35. Ms X has been in contact with the Council since Company Y paid its enforcement agents seeking a refund of the payment made. The Council has not refunded Company Y despite it not being recorded as liable for business rates. This is fault by the Council.
36. I note Ms X states Company Y moved into office 1 in August 2023. Therefore the Council may consider that Company Y is liable for business rates for office 1 from that date. However it is not for the Ombudsman to determine who is liable for business rates. If the Council thinks Company Y is liable it should issue it with a bill and follow the correct process to recover any monies it thinks is owed.
37. I am also concerned that despite prolonged correspondence about this matter the Council does not appear to have updated its records and still has another person recorded as liable for business rates for office 1. This is further faut by the Council which is causing continued frustration for Ms X.
38. Ms X also complained the Council’s communication with her has been poor. I agree. The Council did not act on Ms X’s reports Company Y had moved into offices 1 and 4. Evidence provided by Ms X also shows she had to repeatedly chase up replies to her correspondence about Company Y’s business rates accounts. It also did not properly reply to her stage two complaint. This is fault. As a result Ms X has been put to avoidable time and trouble in pursuing this matter and caused frustration. This is injustice.
39. Ms X has asked for the business rate accounts for all six offices in building Q to be merged. This is a matter for the Valuation Office. Correspondence between Ms X and the Council shows it advised her of the correct process for merging the accounts.

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Agreed Action

40. Within one months of final decision the Council should:
• Apologise to Company Y for the frustration, distress and financial disadvantaged caused to it by the identified fault. We publish guidance on remedies which sets out our expectations for how organisations should apologise effectively to remedy injustice. The organisation should consider this guidance in making the apology I have recommended in my findings.
• Refund Company Y the £928.85 paid to its enforcement agents
• Update its business rates records to reflect the dates Company Y moved into offices 1 and 4. It should confirm it has done so in writing and tell Company Y about any business rates it thinks it is liable for in relation to offices 1 and 4.
• Pay Company Y £100 in recognition of the distress caused by the Council’s enforcement agents attending her business premises.
• Pay Company Y £100 in recognition of the avoidable time and trouble caused by pursuing the matters complained about.
41. The Council should provide us with evidence it has complied with the above actions.

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Decision

42. I have completed my investigation and found fault by the Council. The Council has agreed to remedy the injustice caused by the fault.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman