Summary: Mr X and Ms Y complained about how the Council managed their council tax accounts. There was fault with how the Council managed Mr X’s council tax account which caused distress to Mr X and Ms Y. However, it did not overcharge Mr X. In addition to the apology it has already made, the Council agreed to pay a financial remedy to Mr X and Ms Y to recognise that distress.

The complaint

1. Mr X and Ms Y complain about how the Council has managed the council tax for the property Ms Y rented from Mr X. They say the Council did not respect their arrangements for who would pay the council tax on the property, charged too much council tax and sent them confusing information about what they both owe.
2. They say this has caused them significant stress and has led to Mr X paying too much council tax. They want the Council to bill Mr X for the council tax, close Ms Y’s account and refund Mr X the amounts he had overpaid.

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The Ombudsman’s role and powers

3. 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)
4. The Local Government Act 1974 sets out our powers but also imposes restrictions on what we can investigate. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
5. 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

6. I considered:
• the information Mr X and Ms Y provided, and discussed the complaint with Mr X;
• the Council’s comments on the complaint and the information it provided; and
• relevant law.
7. Mr X, Ms Y and the Council had an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

Council tax liability

8. Usually, the person liable for council tax for a property is the person who lives there. This includes tenants. If there is more than one adult living in a property at the same time, the person who is highest on the ‘hierarchy of liability’ will be the liable person.
9. The hierarchy of liability is:
1. A resident owner-occupier who owns either the leasehold or freehold of all or part of the property.
2. A resident tenant.
3. A resident who lives in the property and who is a licensee - this means that they’re not a tenant, but have permission to stay there.
4. Any resident living in the property, for example, a squatter.
5. An owner of the property, where no one is resident.

What happened

10. Mr X owns his own home. For some periods between 2016 and 2019, Mr X let out his property to tenants, one of whom was Ms Y. Mr X said he had agreed with his tenants that he would continue to pay the council tax while they lived in the property.
11. In mid-2018, the Council was notified that Ms Y had moved out of the property. However, since the council tax account was still in Mr X’s name, it wrote to Mr X asking him for details of when Ms Y had lived in the property. The Council said it received no response from Mr X at that time and Mr X said he did not receive anything from the Council in 2018.
12. In 2019, the Council was notified that a later tenant had moved into the property. In response, the Council closed Mr X’s council tax account and set up an account in the name of the new tenant (T).
13. Mr X emailed the Council saying explaining his agreement with his tenants and asking it to bill him for the council tax. The Council told Mr X that, because T was the only occupant, they were liable for the council tax and so the Council had to bill T directly.
14. The letting agent for the property contacted the Council on T’s behalf saying that the council tax account should be in Mr X’s name. The Council closed T’s council tax account and reopened Mr X’s account. The Council said this was a mistake and it should not have done this.
15. When T moved out, the Council closed Mr X’s account and reopened T’s account. Again, the Council accepts this was a mistake as they had been told about T moved out of the property.
16. Mr X provided details of the tenancy agreements in early 2020. Based on this, the Council opened council tax accounts for Ms Y and T for the periods they had lived in the property.
17. The Council then transferred a credit balance on Mr X’s account to Ms Y’s and T’s accounts, covering all the balance on T’s account, and some of the balance on Ms Y’s account. The Council also refunded some of the credit balance to Mr X.
18. Ms Y became aware of the council tax account in her name in 2022. Since then, Mr X says he has tried several times to explain to the Council that he had paid the council tax for while Ms Y was a tenant and that she should not owe anything. However, Mr X said he was given conflicting and incorrect information.
19. Mr X made a formal complaint in 2023 about how the Council has handled his and Ms Y’s accounts. In its October 2023 final response, the Council accepted that:
• although it was what Mr X wanted, it should not have transferred liability for council tax from T to Mr X in mid-2019, because T was the liable person;
• it mistakenly reopened T’s council tax account after she had left the property in late 2019; and
• it should not have transferred the credit balances to T and Ms Y’s accounts in 2020, without asking him if this is what he wanted.
20. However, it disagreed with Mr X that it had overcharged him council tax, or that Ms Y and T were not the liable people for the periods they had lived in the property.
21. Mr X was not satisfied with the Council’s explanations, so he complained to the Ombudsman.

My findings

Events before August 2022

22. I have decided there are good reasons for me to investigate Mr X and Ms Y’s complaints about what happened before August 2022 (12 months before Mr X complained to the Ombudsman). I am satisfied that, until 2020, Mr X and Ms Y believed that everything was correct with their council tax accounts. Although Mr X knew about earlier problems with T’s time at the property, neither Mr X nor Ms Y believed there were problems from Ms Y’s time there.
23. Mr X first knew about problems with Ms Y’s time in the property in 2020. However, he believed these issues were resolved until Ms Y became aware of the council tax account in her name in 2022. Since then, I am satisfied Mr X has tried to resolve the problem several times and it was only after he complained in 2023 that the Council gave him a clear and full explanation about what had happened. Mr X then complained promptly to the Ombudsman.

Managing Mr X and Ms Y’s accounts

24. The Council has accepted that it made mistakes in how it handled Mr X’s council tax account, as set out in its response to his complaint. I am satisfied those failures were fault.
25. I am also satisfied the Council poorly explained what had happened during the times Mr X was trying to resolve the problems between 2022 and 2023. That was also fault which caused both Mr X frustration and Ms Y avoidable worry. It was not until the Council’s final response that the Council properly and fully explained what had happened.
26. The Council also transferred back to Mr X’s account the sum it had transferred to Ms Y’s account, without asking Mr X if that is what he wanted it to do.
27. Although there was fault with how the Council managed Mr X’s account, the Council was not at fault for billing Ms Y for Council tax for the period she lived in the property. Since Mr X did not live in the property at that time the Council decided that Ms Y, as the tenant, was liable for the council tax. The Council was correct to explain to Mr X that any agreement he had with Ms Y to pay the council tax was a private arrangement between them and did not affect who was legally liable. If Mr X or Ms Y wish to dispute who is liable for the council tax, they can appeal the Valuation Tribunal.
28. The failures in how the Council managed Mr X’s account and how it explained what had happened caused him avoidable frustration. The Council has apologised for that frustration. However, I am not satisfied an apology is a suitable remedy. Given the number of errors the Council made and the time over which it caused Mr X frustration, it should also pay him a financial remedy.
29. Similarly, the Council has caused Ms Y avoidable worry and uncertainty since 2022. It should apologise to Ms Y and also pay her a financial remedy to recognise the distress it has caused her.

Council tax Mr X has paid

30. I have carefully checked the records of payments Mr X has provided against the amounts the Council has said he should have paid for the periods he was resident in the property. Based on those records, I am satisfied the Council has not overcharged Mr X council tax.
31. There were periods of time when Mr X had paid more council tax than he should have done. However, the Council refunded these amounts to him. The total Mr X has paid is the same as the sum of the amount Mr X was due to pay, the refunds it has made and the amount it transferred to T’s account.

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Agreed action

32. Within one month of my final decision, the Council will:
• apologise to Mr X for the frustration caused by the errors it made in managing his account;
• pay Mr X £150 to recognise that frustration;
• apologise to Ms Y for the uncertainty and worry it has caused her; and
• pay Ms Y £150 to recognise that distress.
33. The Council should provide us with evidence it has complied with the above actions.

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Final decision

34. I have completed my investigation. There was fault with how the Council managed Mr X’s council tax account which caused distress to Mr X and Ms Y. However, it did not overcharge Mr X. In addition to the apology it has already made, the Council agreed to pay a financial remedy to Mr X and Ms Y to recognise that distress.

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Investigator's decision on behalf of the Ombudsman