Summary: Mr and Mrs X complained about the Council’s management of their business rates accounts, resulting in it taking payments from the wrong bank accounts. This caused them significant frustration, distress and inconvenience. We decided the Council’s symbolic payment offer as sufficient to recognise their injustice. The Council has agreed to formally apologise to Mr and Mrs X to recognise their remaining injustice.

The complaint

1. Mr and Mrs X ran two businesses, and they complain the Council wrongly took payments from one business to cover rates it said were owed by the other. They say the Council handled the matter poorly with its communication and other administrative actions which caused further unnecessary confusion. The Council offered £100 for their time and trouble. Mr and Mrs X are dissatisfied with this as they said the Council’s actions caused significant distress, frustration and inconvenience, along with extra services of their accountant.

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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, 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(1), as amended)

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What I have and have not investigated

4. I have not investigated the specific events referred to in Paragraph 10. For proportionality, I do not consider this part warrants further investigation. Mr and Mrs X accepted the remedy the Council offered for the fault and injustice here. These details are for background context, as it then led to the main matters of the complaint which I am considering.

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How I considered this complaint

5. I discussed the complaint with Mr and Mrs X and considered their views.
6. I made enquiries of the Council and considered its written responses and information it provided.
7. Mr and Mrs X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Background

8. Mr and Mrs X ran two businesses. I refer to these as Business 1 and Business 2.
9. Prior to the events complained of, Mr and Mrs X held 1 business rates account, with two separate property references under this for each Business. Each had its own separate bank account and a direct debit set up for the Council to take the relevant rates for each Business.
10. In early 2025, the Council contacted Mr and Mrs X. After a review, it found it mistakenly gave them small Business Rates Relief (SBRR) on Business 2. It explained its position and sent several revised bills with backdated charges. Mr and Mrs X queried these. They later raised a complaint as the Council delayed responding. The Council apologised for its lack of communication and offered a symbolic payment for its failure to remove the SBRR sooner.

What happened – summary of key relevant events I am considering

11. At the start of April 2025, the Council (through direct debit) took three payments from the bank account of Business 1: the backdated rates for Business 2, to cover 2023/2024 and 2024/2025. It also took the first monthly instalment for 2025/2026 from that account.
12. In late April 2025, the Council responded to concerns raised by Mr X. As the two Businesses were under one account, this caused confusion which led it to overlook the SBRR liability previously. At the start of the month, it split the records of the two Businesses, so each had their own business rate account to make it clearer for the future. It confirmed it received payments for all the previous billing periods under the account for Business 2.
13. In May 2025, Mr X contacted the Council. He said it took all three payments from Business 1’s bank account, but from the Council’s statement, it showed up as payments received under Business 2’s business rates account.
14. In June 2025, the Council emailed Mr X. It said the monthly payment taken covered both Businesses and a further payment taken since was for Business 2 only. This meant there was an overdue payment for Business 1. It proposed to allocate part of the first monthly payment towards the outstanding balance of Business 1.
15. Mrs X asked the Council to take immediate action to do this and to reissue revised bills. It was the Council’s mistake by misallocating payments from the wrong business. It took payments from each business by direct debit from their separate accounts for years, up until now. She wanted it to sort out its errors. She rang the Business Rates line and asked for a partial credit to be transferred from Business 2’s account to Business 1, to balance the accounts out.
16. In July 2025, Mr X formally complained. He said the Council took a further payment for Business 2 rates, but again, from Business 1’s bank account. He also said the Business Rates call taker did not do as they said they would. He asked to check they applied the credit correctly and for current revised statements.
17. Days later, the Council responded. It directed it as a service request to the Business Rates team for a quicker response.
18. A few days later, a Senior staff member responded to Mr X. They summarised the payments showing against both accounts. They confirmed the call taker acted with the credit transfer to Business 1. They apologised for taking so long to provide the details around their business rates account.
19. The next week, Mr X emailed the Council. He repeated all payments had been taken from Business 1’s bank account, even if correctly allocated for Business 2.
20. The Senior staff member sent a follow up email after a call with Mrs X. They confirmed it now linked each Business to the correct bank accounts. They would send details of instalments that would be taken in future. They offered £100 for Mr and Mrs X’s time and trouble.
21. In August 2025, Mr X complained. He did not feel £100 reflected the severity of the case and impact. The Council took rates for one business, out of the bank account of another separate business. He outlined his wife’s time spent on the matter, with significant stress to them both. He referred to poor communication and the time taken for the Senior staff member to review the situation.
22. In September 2025, the Complaints team responded to Mr X. It was satisfied Business Rates had investigated and offered an appropriate remedy. It was unlikely to provide a different outcome. It signposted him to us.

Analysis

23. The Council did not offer Mr and Mrs X an explanation of what went wrong here. In my view, it likely linked to the Council’s changes to separate Mr and Mrs X’s business rates accounts. I recognise the Council’s good intentions, and it was entitled to do this. But it appears this led to issues with the direct debit bank account details originally recorded for each Business on its system. It is not clear how the error was made, but this is fault. I also cannot see the Council explained to Mr and Mrs X it was doing this separation before it did it, or at the time, or why. This is fault with communication.
24. The Council did generally answer Mr and Mrs X’s concerns where it could. The Council reviewed the transactions and sent individual breakdowns of payment amounts received and allocated under each Business. But this was not at the heart of Mr and Mrs X’s concerns. These statements may have been correct on the surface, but it did not directly address the payments being physically taken wrongly from one business account to pay for the other. It took around three months for the Council to correct its records.
25. The Council’s faults caused injustice to Mr and Mrs X with confusion, inconvenience, distress and uncertainty about the Council’s administrative management of their business rates accounts.
26. The Council offered £100 for Mr and Mrs X’s time and trouble, which is a positive offer. I appreciate they do not feel it goes far enough to reflect their injustice. I recognise their view, and they said it involved the extra services of their accountant to look through it too. But, on balance, I consider it is in line with our guidance on remedies, and financial payments are intended to be symbolic. It is open for Mr and Mrs X to contact the Council to accept this payment.
27. But I cannot see the Council directly apologised to Mr and Mrs X about the overall situation. It accepted shortcomings in the time taken and some communication but not for its actions which led to the business rates account issues. It is evident mistakes were made somewhere, which impacted Mr and Mrs X. But in my view, the Council has not evidenced considered responsibility for it in the form of an apology to them.

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Agreed Action

28. To remedy the remaining personal injustice set out above, the Council has agreed to formally apologise in writing to Mr and Mrs X (in line with our guidance on making an effective apology) for the injustice caused by the faults identified.
29. The Council should provide us with evidence it has complied with the above actions within one month of the final decision.

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Decision

30. I find fault causing injustice. The Council has agreed to my recommendation to remedy the remaining injustice.

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Investigator's decision on behalf of the Ombudsman