Summary: Mr X complained the Council failed to properly establish a business rate account and failed to give enough advice about the rate reliefs available. As a result, he was then too late to apply for rate relief. Mr X said this impacted him financially. There was fault in the way the Council registered the account to the wrong address initially. This fault did not cause Mr X an injustice.

The complaint

1. Mr X complained the Council failed to properly establish a business rate account and failed to give enough advice about the rate reliefs available. As a result, he was then too late to apply for retail rate relief. Mr X said this impacted him financially.

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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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. If we are satisfied with a Council’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

4. I read Mr X’s complaint and spoke to him about it on the phone.
5. I considered information provided by Mr X and the Council.
6. Mr X and the Council had an opportunity to comment on a draft decision. All comments were considered before making this final decision.

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What I found

Background information

7. The Non-Domestic Rates (Collection and Enforcement) (Local Lists) Regulations 1989 cover both the way councils collect payments of business rates and the way councils can recover such debt. The Tribunals, Courts and Enforcement Act 2007 and associated regulations cover the way enforcement agents may recover debts.
8. The business rates bill for the year is due on 1 April. A council will usually collect payment through monthly instalments. If any instalment is missed, the council will send the liable person a reminder. If a payment is still not made or a further payment is missed, then the entire outstanding balance will be due (that is the full amount for the rest of the year).
9. To use the powers available to it to recover unpaid business rates, a council must apply to a magistrate’s court for a liability order against those it believes are liable. Once a council has obtained a liability order it can take recovery action.
10. A liability order gives a council the legal power to take enforcement action to collect the business rates and court costs owed. It can then use enforcement agents, take insolvency proceedings or ask a court to send the debtor to prison for non-payment. The council can decide which recovery method to use but it can only use one method for one liability order at one time.
11. Small business rate relief (SBRR) is awarded if a business has one property and its rateable value is less than £15,000. If the business has more than one property it can still get SBRR on the main property if none of the other properties has a rateable value above £2,899 and the total rateable value of all the properties is less than £20,000 (£28,000 in London).
12. The retail rate relief’s deadline to apply for SBRR is the September after that financial year has ended.
13. Mr X’s wife, Mrs X provided a lot of the correspondence in this case.
14. The Council noted Mr X had other companies with different reference numbers.
15. If an individual disagrees with the rateable value of the business, they can appeal to the Valuation Office Agency (VOA).

What happened

16. This is a summary of events, outlining key facts and does not cover everything that has occurred in this case.
17. Mr X’s company moved to a new address in August 2022.
18. Mrs X provided the Council with the lease in October 2022. The Council registered Mrs X’s correspondence address as the address listed on Companies House for Mrs X. Mrs X was not a registered director for the company.
19. Mrs X applied for small business rate relief in June 2023. She applied for relief from September 2022. The Council recognised its error in the address it registered. It amended Mrs X’s address. It sent Mrs X two bills to the correct address. The 2022/2023 bill said the rateable value was above £15,000 so the company could not apply for the relief. The 2023/2024 bill said the rateable value was below £15,000. The Council applied the rate relief for the 2023/2024 year.
20. Mrs X applied for small business rate relief in July 2023. She applied for relief from August 2022. The Council said it could not apply the relief as the company was not liable for the address from the start of August 2022. The Council advised it had an account open for another address until 2023, so it could not apply the small business rate relief as the company was liable for two properties.
21. Mrs X provided an invoice and rental agreement to evidence the company trading at the new address. The Council said the rental agreement did not prove the company was trading and the invoice was before August 2022.
22. Mrs X provided more documents in September 2023. The Council documented she provided invoices under a different company name, dated before the address changed. The Council also evidenced Mrs X sent bank statements under a different company name noting a different reference number. The Council responded to Mrs X and explained what documentation it needed to evidence the company trading at the address.
23. Mrs X contacted the Council in October 2023 to explain the name on the bank statements was the previous company name. The Council accepted the bank statements as evidence. Mrs X applied for small business rate relief for 2022/2023 again. The Council noted the rateable value for this year was above £15,000 so Mrs X was not eligible for the rate relief.
24. Mrs X disagreed with the valuation. The Council advised she needed to apply to the VOA.
25. Mrs X contacted the VOA and it asked for a report from the Council.
26. The Council told Mrs X it would only complete the report if it agreed the property had changed. The Council said it did not think the property had changed.
27. Mrs X complained to the Council in February 2024. She explained what happened and she felt the Council delayed setting up the account, meaning she could not apply for small business rate relief.
28. The Council responded to the complaint at the end of February 2024. The response confirmed the issues with the business addresses. It advised Mrs X it set up the account under the correct address in June 2023 but did not get evidence of trading before the September 2023 deadline. The Council accepted its error entering the wrong address at first, but confirmed it corrected the error in June 2023 giving Mrs X time to apply for the rate relief.
29. Mrs X asked the Council escalate her complaint in March 2024. She said she missed the September 2023 deadline because of the Council's delays. She also said the Council withheld information from her.
30. The Council responded to Mrs X’s stage two complaint in April 2024. The Council stated it took so long to confirm the liability due to issues confirming the correct liable party and address. The Council explained it accepted its error about the address in the stage one complaint response. Once it realised the mistake, it corrected it with time for any applications for rate relief.
31. Mrs X was not satisfied with the Council’s response and Mr X asked the Ombudsman to investigate. Mr X would like the Council to resolve the case and compensate him.
32. In response to my enquiries the Council accepted its error in naming the wrong correspondence address at first. It stated it corrected the mistake in June 2023, leaving the company enough time to apply for any rate relief.

My findings

33. The Council accepted it registered the wrong address on the case. This is fault but the Council corrected this matter in June 2023. This was enough time to resolve any issues before the end of September 2023 deadline to apply for rate relief. This fault did not cause any injustice.
34. The rateable value of the business property was above the £15,000 threshold in 2022/2023. The Council did not apply the small business rate relief because of this. If Mr X did not agree with the rateable value, this is for the Valuation Office Agency to consider.
35. When the rateable value dropped below £15,000 in April 2023, the Council applied the small business rates relief to the property.
36. The Council applied the small business rate relief when it was appropriate. The reliefs are restricted, time limited and no longer apply to Mr X for 2022/2023. The Council correctly considered the legislation and its policy when considering the reliefs. The Council was not at fault.
37. The Council considered Mr X’s case but decided it could not apply any discretionary relief to the case before April 2023. It said it could only apply discretionary relief to organisations eligible for mandatory relief. The Council decided, because Mr X was not eligible for any mandatory relief, it could not apply any discretionary relief. The Council considered applying discretionary relief but decided not to. The Council was not at fault.
38. The Council sent a bill to the correct address in June 2023. The bill has the Council website where the business rate information and relief details are available. The information is also available on the government website. Mr X could have considered these sources of information if he needed further detail on business rates or relief. The Council was not at fault.

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Final decision

39. I have completed my investigation. I have found fault by the Council, but this fault did not cause an injustice to Mr X.

Investigator’s final decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman