Summary: Mr X complained about the way the Council dealt with his empty property exemption. We found fault with the Council. This fault did not cause injustice to Mr X.

The complaint

1. Mr X complains the Council failed by withdrawing a six-month exemption to his business rates account a few months after applying it. Mr X says this has impacted him financially as, had he known the exemption would only apply for three months, he would have rented out his commercial property sooner.

Back to top

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. When considering complaints we make findings based on the balance of probabilities. This means that we look at the available relevant evidence and decide what was more likely to have happened.
4. 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(1), as amended)

Back to top

How I considered this complaint

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

Back to top

What I found

The government information on empty property relief

7. If you get empty property relief, you do not have to pay business rates on your empty property for three months. The relief starts from when the property becomes empty. After this time, most businesses must pay full business rates.
8. Industrial premises (for example warehouses) can get empty property relief extended for a further three months.
9. To get empty property relief you should contact your local council to:
• let them know when your property becomes vacant;
• check if you can get extended empty property relief;
• find out more about how empty property relief works in your area.

The Council’s information on business rates

10. Business rates will not be payable in the first three months that a property is empty. This is extended to six months in the case of certain industrial properties. After this period rates are payable in full.

What happened

Background

11. Mr X owns two companies – Company 1 and Company 2. At the end of June 2023 Company 2 bought a property (the Property).
12. In mid-November 2023 Mr X told the Council:
• at the end of June 2023 his company took ownership of the Property;
• the Property remained vacant for three months from the end of June 2023;
• from the beginning of October 2023 Company 1 occupied the Property on a temporary basis but would vacate it by mid-November 2023 to enable the Property to be subdivided and refurbished before letting it out.
13. At the end of February 2024 the Council sent business rates invoice to Company 1 for the period from the beginning of October 2023 to the end of March 2024. The Council indicated that from mid-November 2023 to the end of March 2024 the Property would be under the empty property exemption.
14. At the end of April the Council sent another business rates invoice to Company 1. This was for the tax year 2024 to 2025. The Council exempted the Property from business rates until mid-May 2024. During a telephone call with the Council Mr X confirmed the landlord (Company 2) took the Property back and it was empty.
15. Mr X called the Council again at the beginning of May 2024. Mr X confirmed a new account was raised for the Property and the Council had applied a six-month empty property exemption. Mr X indicated the Property would be renovated soon.
16. In mid-June 2024 Mr X told the Council Company 1 moved into the Property let out by Company 2 in mid-May 2024. Subsequently the Council sent a business rates invoice to Company 2, confirming empty exemption period from mid-November 2023 to mid-May 2024.
17. At the end of August 2024 Company 1 applied for a planning permission for a development of the Property. In the application Company 1’s representative stated the Property was vacant and last used by the beginning of January 2023.
18. In mid-September 2024 Mr X told the Council that although Company 1’s tenancy in the Property was ending at this time, Company 1 moved out of the Property in mid-August 2024 and the Property had been vacant since then. Mr X also held a telephone conversation with the Council. During this conversation Mr X found out that the Property would be exempt for three months rather than six months, as previously.
19. In the third week of September, after realising the incorrect exemption was applied to the Property, the Council sent another invoice to Company 2 with the amended payment for the period from the beginning of April to mid-May 2024.
20. Mr X told us that he had based all his financial decisions about the Property on the six-month business rates exemption granted by the Council from mid-November 2023 to mid-May 2024. Because of the length of this exemption Company 2 did not let the building out on a temporary basis earlier. Mr X said that the Council’s error caused him financial loss.

Analysis

21. Our ‘Principles of good administrative Practice’ state that when exercising their functions councils should:
1. get it right by following their policies and taking reasonable, timely decisions based on relevant considerations;
2. being citizen focused by informing people who use services what they can expect and what the organization expects from them;
3. being open and accountable by taking responsibility for their actions.
22. When changing its decision to apply six-month empty property exemption to the Property a few months after this decision had been taken, the Council failed to adhere to the principles of good administrative practice. This is fault.
23. The Council’s fault did not, however, cause injustice to Mr X. This is for the following reasons:
• after receiving an empty property exemption for three months in 2023, Mr X should have queried why the Council was applying a six-month exemption for the same property from mid-November 2023. As a business owner Mr X can be expected to exercise a higher level of caution in his dealings with the Council than we would normally expect from other service users;
• the Council’s and the government’s websites state an empty property exemption would normally last three months. Whilst this exemption can be extended for certain properties, it is clear this would need specific consideration from the Council, which did not take place for the Property before February 2024, when Mr X received the business rates invoice indicating length of the exemption period;
• Mr X said he had received confirmation of the six-month exemption period during a telephone conversation with the Council’s officer. He said he had made his plans for the Property based on this conversation. There were no telephone calls between Mr X and the Council between mid-November 2023 and the end of April 2024. A three-month empty property exemption would have expired in mid-February 2024. In the late April and early May 2024 it would have been too late to make any plans for the use of the Property between mid-February and April 2024.

Back to top

Decision

24. I find fault not causing injustice.

Back to top

Investigator's decision on behalf of the Ombudsman