Business rates

This fact sheet is aimed primarily at anyone who is experiencing problems with some aspect of their business rates account and may be considering making a complaint to the Ombudsman.

I have a problem with my business rates. Can the Ombudsman help me?

In some cases, yes. But there are some matters we are not allowed to look at by law:

  • We cannot look at the level of business rates as this has been decided by central Government.
  • We cannot deal with complaints about the rateable value of your property as you can appeal about this to the Valuation Tribunal.
  • We do not look at councils' decisions that you are liable for the business rates. The Magistrates’ Court decides rates liability when a council applies for a liability order. The court is the body which should make the decision and we will not interfere with this. If the court has decided you are liable we cannot reconsider this.
  • We cannot consider complaints about what happened during court proceedings, from the issue of a summons for a liability order hearing to the decision of the court.

But we can consider other complaints about the way the council has dealt with your business rates.

How do I complain?

You should normally complain to the council first. Councils often have more than one stage in their complaints procedure and you will usually have to complete all stages before we will look at your complaint.

Then, if you are unhappy with the final outcome, or the council is taking too long to look into the matter – we think 12 weeks is reasonable – you can complain to us.

You should normally make your complaint to us within 12 months of realising that the council has done something wrong.

For more information on how to complain, visit our contact page or complete an online complaint form.

If you can consider my complaint what will the Ombudsman look for?

We consider whether the council has done something wrong in the way it went about dealing with your business rates account which has caused you problems. Some issues we can look at are if the council:

  • failed to give you information you should have (such as entitlement to reductions in the rates or your right of appeal to the Valuation Tribunal)
  • delayed in dealing with disputes, issuing bills or applications for discretionary rate relief
  • made mistakes in dealing with your payments such as failing to credit them to your account, or assigning them to the wrong account
  • continued to take recovery action against you when it shouldn’t, such as when you have already paid off the debt, or you are keeping to an agreed arrangement to pay the debt by standing order or direct debit
  • failed to pass on important information to the enforcement agents (bailiffs), such as that you have cleared your arrears, or
  • delayed unreasonably in dealing with business rates benefit claims.

We may also look at complaints about enforcement agents (bailiffs) acting on behalf of the council, for example if they behave unreasonably or make unreasonable charges. See our separate fact sheet about complaints about bailiffs for more details of this.

What happens if the Ombudsman finds that the council was at fault?

We cannot decide whether you are liable to pay business rates. But, if we find that a council was at fault in the way it dealt with your business rates account we can ask it to:

  • take action to put the matter right, such as correcting mistakes on business rates records and issue the right bills and demands
  • ensure that payments you have made are properly paid into your account
  • deal with your correspondence or appeal
  • withdraw a summons or enforcement agents and waive costs where appropriate, or
  • pay you a financial amount to remedy your injustice. The amount we recommend will depend on how you have been affected by what has gone wrong, for example whether you have received any unnecessary summonses, liability orders or enforcement agent visits as a result of the council’s errors.

Where we find fault with the council’s procedures we will usually recommend that the council makes changes so that the same problem does not occur again in the future.

Examples of some complaints we have considered

Ms T ran a company and rented Unit 1 for the company. She received Small Business Rate Relief (SBRR) on this unit. A year later she brought a new home and rented Unit 2 to store her personal belongings while she renovated her home. The landlord told the council about this, but their contact with the council was confusing. Because of this the council at first thought Ms T had moved from one unit to another; it transferred her rates liability and the SBBR from Unit 1 to Unit 2. Further contact from landlord suggested Ms T was occupying both units. The council made her liable for unit 1 with a new account reference and removed the SBRR from both units. The council now accepts this was an error; it should have reopened Ms T’s original account for Unit 1 and removed SBRR removed from Unit 2.
The council then wrote to Ms T at the contact address she had given them. When post to this was returned it wrote to her at the Units. Ms T contact the council saying if she had known she would have lost SBRR she would not have taken on Unit 2 and she had now left it. After some further confusion the council reopened the account for Unit 1, reawarded SBRR for Unit 1 and explained she was liable for the full debt due for her occupation of Unit 2.
When we investigated we found the council had Ms T’s email address and phone number and could have used this to contact her to clarify the liability. If it had done this she would have been aware much earlier about the loss of SBRR and she would have left Unit 2 six months earlier. It was also at fault in removing SBRR from Unit 1; but its actions in reinstating this had remedied any injustice caused. The council agreed to write off six months of Ms T’s liability Unit 2 and apologise to her for failing to contact her earlier.

Company X owned a large warehouse. When the lease to another company ended Company X, as the owner, became liable for the empty rates on the property. After a six month exemption the empty rates, a sum of around £1 million, became due. Agent Y, acting for Company X, said Trader Z had occupied the property. If Trader Z occupied the property for more than six week and then left the property empty again Company X would receive another six month rates exemption and the council would lose £500,000 in rates.
The council investigated Trader Z. If found the licence to occupy ran for just under four months, with no provision for extension. Trader Z would pay no rent; Company X would pay the utility bills, and all building related costs. The agreement could be ended by either party with 72 hours notice. Trader Z had a website, with no facility to make online orders. Further investigation showed Trader Z had occupied other large premises for period of just over six weeks. A visit to the property found Trader Z there, but most of the property was empty. Trader Z said they traded at craft fairs and on EBay and stored most of their goods in a container. Agent Y found her similar properties in the past, which she occupied for just over six weeks.
Having considered all the information it had the council decided Trader Z was not in ‘beneficial occupation’ of the unit and Company X was liable for the rates. Company X, via Agent Y contested this and, when the council stuck by its decision, complained to us.
We found the council was not at fault. It had considered all the information it had and taken legal advice and looked at the law. We could not see any administrative fault in how the council had made its decision. If Company X contested the point about ‘beneficial occupation’ this something for the courts to resolve, as it depended on interpretation of a point of law.

Other sources of information

Most councils have lots of information on business rates on their own websites.

There is also information on the Valuation Office Agency at https://www.gov.uk/government/organisations/valuation-office-agency

The Valuation Tribunal’s website is https://www.valuationtribunal.gov.uk 

Our fact sheets give some general information about the most common type of complaints we receive but they cannot cover every situation. If you are not sure whether we can look into your complaint, please contact us.

The Local Government and Social Care Ombudsman provides a free, independent and impartial service. We consider complaints about the administrative actions of councils and some other authorities. We cannot question what a council has done simply because someone does not agree with it. If we find something has gone wrong, such as poor service, service failure, delay or bad advice and that a person has suffered as a result the Ombudsman aims to get it put right by recommending a suitable remedy.

October 2019