Summary: Mr X complained that the Council incorrectly informed him that he did not need to pay council tax as his property was listed as HMO. Mr X was later informed he was liable for council tax from September 2023. We have concluded our investigation with a finding of fault. The Council acknowledges it provided Mr X with incorrect information and has proposed a suitable remedy.

The complaint

1. Mr X complains that the Council incorrectly informed him that he did not need to pay council tax as his property was listed as a HMO. As a result of the Council's actions, Mr X says he was put in financial difficulty as he had not budgeted for the unexpected charges he was later informed of. Mr X also says he experienced severe anxiety and stress due to receiving payment demands and spending significant time trying to resolve the issue. Mr X says the Council should cancel the charges for the period between September 2023 and January 2024, as he was misled into believing he was not liable.

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The Ombudsman’s role and powers

2. 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

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

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What I found

Council Tax

5. The Council Tax (Administration and Enforcement) Regulations 1992 cover both the way councils collect payments of council tax and the way councils can recover council tax debt. The Tribunals, Courts and Enforcement Act 2007 and associated regulations cover the way enforcement agents may recover debts.
6. The council tax bill for the year is due on 1 April. A council will usually collect payment through monthly instalments. If the liable person misses any instalment, the council will send them a reminder. If a payment is still not made or a further payment missed, then the entire outstanding balance will be due (that is the full amount for the rest of the year).
7. To use the various powers available to it to recover unpaid council tax, a council must apply to a magistrate’s court for a liability order against those it believes are liable. Once a council has a liability order it can take recovery action.
8. A liability order gives a council the legal power to take enforcement action to collect the council tax and court costs owed. The most commonly used powers are asking for deductions from benefits, getting an attachment of earnings (this means deductions are taken directly from earnings by an employer and passed to the council) or using enforcement agents. The council can decide which recovery method to use but it can only use one method for one liability order at one time.

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What happened

9. I have included a summary of some of the key events in this complaint. This is not intended to be a comprehensive account of everything that took place.
10. In September 2023, Mr X contacted the Council and was advised by a representative that he was not liable for council tax as his property was listed as a House of Multiple Occupation (HMO).
11. Mr X says he was reassured multiple times by the Council that no council tax payments were required.
12. In April 2024, Mr X received a council tax bill for the period between September 2023 and January 2024.
13. Mr X queried the bill and was informed by the Council that the property was not an HMO, meaning he was liable for council tax from September 2023.
14. The Council acknowledged the error in providing incorrect information and upheld Mr X’s complaint.
15. The Council offered £75 compensation for the distress caused, which Mr X felt was insufficient.
16. Mr X believes the council tax charges for the period from September 2023 to January 2024 should be written off due to the incorrect advice he received.

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Analysis

17. The Council has acknowledged fault in its handling of Mr X’s council tax case, recognising that incorrect information was provided to him regarding the HMO status of the property. Mr X was informed that he would not be liable for council tax, which led him to believe he did not need to budget for these charges. As a result, when Mr X later received a council tax bill, it caused distress, financial difficulty.
18. However, despite the error made by the Council, it is important to note that this does not absolve Mr X of his responsibility to pay council tax for the period in question. The legal requirement to pay council tax remains unchanged, regardless of the misinformation provided by the Council. That said, the timing of the error and the advice provided are key factors in this case. Mr X has acknowledged his responsibility for the charges but contends that he should only be liable for council tax from January 2024 onwards, as he was misinformed about the property’s status prior to that date.
19. The primary issue in this case is the impact of the error. The distress caused by receiving an unexpected bill, coupled with the time spent attempting to resolve the issue has understandably caused Mr X frustration. The error led to Mr X experiencing financial hardship as he had not budgeted for the expense.
20. While Mr X's liability to pay council tax for the period in question remains, the Council's fault in providing incorrect advice should not be overlooked. The distress and financial consequences of this error have had an impact on Mr X, who relied on the information given to him in good faith. The failure of the Council to provide clear and accurate guidance has contributed to a period of distress, financial difficulty for Mr X and on this point, we have made a finding of fault. Given the above, an increase in the remedy offered by the Council is warranted, given the extent of the injustice caused.
21. From the Council’s Stage 1 and Stage 2 complaint response, we could not see evidence that it had considered the options available to both the Council and Mr X that could potentially reduce his council tax liability, including consideration of any discretionary relief, or informing Mr X about any other schemes which may be available to him.
22. As part of our draft decision, we proposed that the Council should consider Section 13A Discretionary Relief, which it has. In light of the incorrect information given to Mr X, the Council agreed to write off the council tax liability, reducing his balance to zero.

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Agreed action

23. To prevent similar occurrences and remedy injustice in this complaint, the Council will:
1. Pay Mr X a remedy of £150, an increase from the original £75 offered.
2. Proceed with its proposal to write off the council tax liability, following consideration of Section 13A Discretionary Relief.
3. Improve internal guidance or undertake staff training to ensure accurate and consistent advice on council tax liabilities, particularly in relation to HMOs and exemptions.
24. The Council will complete action points a to c within one month of the Ombudsman’s final decision. The Council will provide us with evidence it has complied with the above actions.

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Final decision

We have concluded our investigation with a finding of fault. The Council acknowledges it provided Mr X with incorrect information and following consideration of Section 13A Discretionary Relief, has agreed to write off the council tax liability, and provide a remedy for further injustice identified in this complaint.

Investigator’s final decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman