Summary: We have discontinued the investigation. The complaint concerns a substantial dispute about legal entitlement to a business rates credit. We consider a court is better placed to resolve that dispute and provide an enforceable remedy. The Council has already corrected the correspondence and recovery issues, withdrawn the liability orders and paid Company A £500. Further investigation is unlikely to achieve a different outcome.

The complaint

1. Mr X complains the Council wrongly changed Company A’s business rates correspondence address to its landlord without authority, leading to missed notices, liability orders and enforcement action. He also complains the Council has refused to refund a credit of approximately £18,000 to Company A, despite it being the named ratepayer, and that it instead says the credit should be paid or transferred to the landlord.

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The Ombudsman’s role and powers

2. We investigate complaints about councils and certain other bodies. Where an individual, organisation or private company is providing services on behalf of a council, we can investigate complaints about the actions of these providers. (Local Government Act 1974, sections 24A(1)(A) and 25(7), as amended).
3. We investigate complaints about ‘maladministration’ and ‘service failure’, which we call ‘fault’. We must also consider whether any fault has had an adverse impact on the person making the complaint, which we call ‘injustice’. We provide a free service, but must use public money carefully. We do not start or continue an investigation if we decide:
• further investigation would not lead to a different outcome, or/and
• there is another body better placed to consider this complaint.

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How I considered this complaint

4. I considered evidence provided by Mr X and the Council as well as relevant law, policy and guidance.
5. Mr 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

Liability for non-domestic rates

6. Section 43 of the Local Government Finance Act 1988 says the occupier of non-domestic premises is generally liable for non-domestic rates. The Act refers to the person liable as the ratepayer.

Repayment of overpaid business rates

7. Regulation 9 of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 concerns adjustments to the amount payable by a ratepayer.
8. Where an adjustment means the amount already paid exceeds the amount properly payable, the billing authority must repay the difference if the ratepayer requires it. Otherwise, it may repay the amount or credit it against the ratepayer’s later liability.

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What happened

9. Company A occupied business premises and was the named ratepayer. Under its lease, the landlord was responsible for paying the business rates on its behalf.
10. In 2023, Company A told the Council the landlord would make the payments. The Council then changed the correspondence address on the business rates account to the landlord’s address.
11. The Council later issued bills, reminders and summonses to the landlord’s address. It obtained liability orders in December 2023, July 2024 and June 2025 after payments fell into arrears. Company A says it was unaware of these because it did not receive the correspondence.
12. Company A left the premises in March 2025. The Council says it was not told at the time and continued to treat Company A as liable. An enforcement agent visited Company A’s new premises in July 2025. Company A then contacted the Council. The Council stopped recovery action, closed the account, withdrew the liability orders and corrected the correspondence address.
13. The Council accepted it had changed the correspondence address without receiving a specific instruction to do so. It also paid Company A £500.
14. Closing the account resulted in a credit. Company A says the credit should be refunded to it because it was the named ratepayer. The Council says the principal credit arose from payments made by the landlord after Company A’s liability had ended and should instead be transferred to the landlord’s account.
15. Company A disagrees with the Council’s position. It says the credit belongs to it under the statutory business rates scheme.

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Decision to discontinue

16. Company A says regulation 9 requires the Council to refund the business rates credit to it because it was the named ratepayer and has requested repayment. It says the statutory scheme operates between the Council and the ratepayer and does not allow the Council to transfer the credit to a third party. It considers that, if the landlord believes it is entitled to the money, the landlord should pursue a separate claim against Company A.
17. The Council disputes Company A’s entitlement to the money. It says Company A’s liability ended on 28 March 2025 and the principal credit arose from payments the landlord made after that date. It says those payments were allocated to Company A’s account only because it had not yet been told Company A had left the premises. The Council does not accept the money represents an overpayment in respect of Company A’s liability and intends to transfer it to the landlord’s later rates account.
18. The parties therefore disagree about whether the credit is an overpayment in respect of Company A’s rates liability to which regulation 9 applies. Deciding that question would require consideration of the timing, source and purpose of the payments, the liability period to which they related, whether the landlord made them on Company A’s behalf or towards its own liability, and the effect of the rates-inclusive lease. The Council says the landlord made the payments, has provided evidence of this and has asked for them to be transferred to its later rates account. The landlord is not a party to this complaint. These matters go beyond checking how the Council administered the account and concern the parties’ competing legal claims to the money.
19. Mr X has referred to previous Ombudsman decisions involving Fareham Borough Council and North Somerset Council. Ombudsman decisions are based on the particular facts of each complaint and do not create binding precedents. In the Fareham case, the council accepted the refund was legally owed to the named ratepayer. In the North Somerset case, the complainant company had itself paid money towards rates for a period when it was not the recorded ratepayer. Neither decision determines the disputed question in this complaint: whether the payments made by the landlord represent overpayments of Company A’s liability or payments relating to the landlord’s own liability.
20. Company A says any court proceedings should be brought by the landlord after the Council has refunded the credit to Company A. However, recommending that outcome would first require us to decide that Company A has the better legal entitlement to the money. Mr X also says we could investigate the process the Council followed without deciding entitlement. But the main injustice claimed is the Council’s refusal to pay the credit, and the main remedy sought is payment to Company A. A process-only investigation would not resolve the underlying dispute or provide that remedy.
21. Company A may pursue court proceedings seeking recovery of the disputed sum. A court can hear evidence from the Council, Company A and, if necessary, the landlord. It can consider the statutory scheme, the payment evidence and the parties’ contractual arrangements, and make a binding and enforceable decision about entitlement. We cannot provide that final determination.
22. I have considered Mr X’s concerns about the likely cost, time and management resources involved in court proceedings. I have balanced those matters against the substantial amount in dispute, Company A’s status as a commercial organisation, the nature of the legal issues, the competing claim to the money and the fact the principal remedy sought is payment of a specific sum. Taking these factors together, I consider it reasonable for Company A to use the court remedy available to it. I have therefore decided to discontinue the investigation of this part of the complaint under section 26(6)(c) of the Local Government Act 1974.
23. The Council has accepted it changed Company A’s correspondence address without receiving a specific instruction to do so. Company A says it consequently did not receive bills, reminders, summonses or notice of the recovery action. When Company A contacted it, the Council stopped recovery, corrected the account, withdrew the liability orders and paid Company A £500. In response to the draft decision, Mr X confirmed Company A accepts the £500 as remedying the enforcement and distress element and does not seek any further remedy for it.
24. Recovery action ended shortly after Company A contacted the Council. No goods were removed, the liability orders were withdrawn and there is no continuing recovery action. Given the action already taken by the Council and Company A’s acceptance of the remedy, there is no worthwhile outcome further investigation could achieve on this part of the complaint.
25. I have decided to discontinue our investigation of the complaint as a whole.

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Decision

26. I have discontinued my investigation. The complaint concerns a substantial dispute about legal entitlement to a business rates credit. I consider it reasonable for Company A to use the court remedy available to it. The Council has corrected the correspondence and recovery issues, withdrawn the liability orders and paid Company A £500, which Company A accepts resolves that part of the complaint. Further investigation would not achieve a different or additional outcome.

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Investigator's decision on behalf of the Ombudsman