Summary: Miss B says the Council wrongly took recovery action for business rates arrears when it had written to her at the wrong address, that it failed to respond to her communications, failed to follow the complaints procedure and delayed repaying money it owed her. There is no fault in how the Council pursued recovery action or in how it dealt with the complaint. The Council failed to respond to one email and delayed repaying some money. An apology, alongside the action the Council has already taken, is satisfactory remedy.

The complaint

1. The complainant, Miss B, complained the Council:
• wrongly pursued recovery action for business rates arrears when the Council had failed to process a change of address;
• treated her differently to other business operators by failing to contact her by telephone;
• failed to respond to her communications;
• failed to consider her complaint properly;
• delayed considering the complaint; and
• delayed repaying money owed to her.
2. Miss B says the Council’s actions have caused her significant emotional distress.

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The Ombudsman’s role and powers

3. 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)
4. 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)
5. We consider whether there was fault in the way an organisation made its decision. If there was no fault in how the organisation made its decision, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
6. 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

7. As part of the investigation, I have:
• considered the complaint and Miss B's comments;
• made enquiries of the Council and considered the comments and documents the Council provided.
8. Miss B and the organisation had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

What should have happened

9. The Council’s policy on business rates recovery sets out the procedure it should follow when business rates are not paid, as follows:
• issue a reminder notice with a maximum of two reminder notices;
• if, after a reminder notice, the account is not brought up to date the Council will issue a final notice and the right to pay by instalments is withdrawn. The final notice requests the balance is paid within seven days;
• if the full amount of the final notice is not paid the Council can make an application to the Magistrate’s Court for a summons. That may incur court costs which are added to the business rates account;
• if the balance is outstanding at the time of the hearing the Magistrates may grant a liability order and award further costs which are added to the business rates account;
• following a liability order the Council may send a letter telling the ratepayer about the liability order and asking them to make a payment arrangement. Once the liability order is granted the Council can begin recovery action. That can include passing the debt to an enforcement agent;
• if the debt is referred to an enforcement agent the ratepayer incurs a charge of £75, which is the compliance fee;
• if the ratepayer fails to engage with the enforcement agent a first visit is made to the business address or registered office and the ratepayer may incur a visit fee of at least £235. Further fees may be charged if the enforcement agent visits with the intention to remove goods;
• if all available recovery methods have been unsuccessful the Council can begin insolvency proceedings if it is considered in the financial interest of the Council to do so. That involves substantial legal fees and disbursements.
10. The Council’s complaints procedure says the Council will respond to complaints within 20 working days of submission. It says when that is not possible after the initial 20 working days the Council will update the person that has complained every 10 working days up to a maximum of 60 working days.

What happened

11. Miss B operates a small business in the Council’s area. Between 2021 and 2023 Miss B had three different business addresses. I will refer to the first one as address 1, the second as address 2 and the third as address 3.
12. In June 2021 the Council sent Miss B the annual business rates bill to address 1. That was the registered business address at the time. Miss B challenged the rateable value for the business with the Valuation Office.
13. The Council issued the new annual business rates bill to address 1 on 15 March 2022. That was still the right registered business address for Miss B’s business.
14. On 21 December 2022 Miss B wrote to the senior lawyer at the Council about a business improvement district (BID) invoice, stating the registered business address as address 2.
15. In February 2023 Miss B’s registered business address was changed on Companies House to address 3.
16. On 15 March 2023 the Council issued the annual business rates bill to address 1.
17. The Council had put on hold recovery action of council tax and business rates until June 2023 due to a number of factors, including COVID-19 and moving to a new computer system.
18. On 6 June 2023 the Council sent Miss B business rates reminder notices followed by final notices on 27 June. The Council sent those notices to address 1. Those notices covered the tax years 2021-2023.
19. The Council sent Miss B reminder notices for the 2023/24 business rates on 18 July. The Council sent that notice to address 1, followed by a final notice on 8 August which also went to address 1.
20. The Council issued a summons for the 2021-2023 tax years on 21 July. The Council sent that letter to address 1. The Magistrates Court granted a liability order on 11 August.
21. The Council wrote to Miss B at address 1 on 16 August to tell her about the liability order. That letter told Miss B if she did not pay within 14 days it would refer the case to enforcement agents which would incur costs.
22. On 15 September the Council issued a summons for the 2023/24 business rates to address 1. The Council secured a liability order for that on 6 October and wrote to Miss B at address 1 on 11 October about it. That letter contained the same information about referring the case to enforcement agents if the Council did not receive payment. The Council subsequently referred this case to the enforcement agent.
23. The enforcement agent wrote to Miss B about the 2021-2023 business rate arrears on 6 October and about the 2023-2024 business rates arrears on 17 November.
24. On 6 December the enforcement agent visited address 1 and left a letter.
25. The enforcement agent spoke to Miss B about the arrears on 18 December. Miss B said she did not know anything about the debt and contacted the Council to ask it to send her a copy of all the letters issued.
26. The enforcement agent wrote to Miss B on 19 December at address 3 to confirm the amounts outstanding.
27. On 18 January 2024 Miss B confirmed the registered business address was address 3 and raised concerns about the rateable value of the property. Miss B then put in a complaint on 22 January.
28. On 31 January a manager from the Council contacted Miss B to explain as the rateable value of the property had been amended she could apply for small business rate relief at 100%. Miss B later completed an application for that and was awarded 100% business rates relief.
29. On 15 February the Council responded to the complaint. The Council did not uphold the complaint but told Miss B after applying the small business rate relief and removing the summons and liability order costs as a concession it owed her some money. The Council asked Miss B for her bank details and once it confirmed those it said it would make the payment by 12 March.
30. Miss B contacted the Council again on 10 March to provide it with evidence that she had told it about her change of address to address 2 in December 2022. In response the Council apologised for failing to pass the new business address across to the business rates team. The Council said it would refund the enforcement agent fees.
31. Miss B chased the Council for the refund on 16 May. The Council processed the refund on 6 June.

Analysis

32. I have exercised the Ombudsman’s discretion to investigate what happened from April 2021 onwards. That is because I am satisfied Miss B did not know about issues with her business rates account until December 2023.
33. Miss B says the Council wrongly took recovery action against her business for business rates arrears and failed to follow its procedure in doing so. Miss B says the Council is at fault because it sent reminder letters, summons and liability orders to the wrong registered address for her business. Miss B says she had provided the Council with the new registered address. Miss B says if the Council had amended its records it would not have pursued enforcement action against her as she would have received the letters and been able to act on them. Miss B says she has suffered a significant injustice as a result as she was faced with bailiff action which has caused her significant distress.
34. The evidence I have seen satisfies me that since 2022 Miss B has had three different registered addresses for her business. I am satisfied the Council had sent the reminders, summons, liability orders and warnings of bailiff action to Miss B at address 1. It is clear though that Miss B had provided the Council with a new registered address for her business - address 2, in December 2022. The Council says Miss B did not provide that address to the business rates team and nor did she refer to her business rates account when she provided the address to a solicitor at the Council in relation to her BID account.
35. I understand the point the Council makes about Miss B not directly contacting the business rates team. However, Miss B had provided the address to the Council and we would normally expect Council departments to share information. In this case though I do not consider the failure to share the information with the business rates team had any impact on what happened with recovery of the business rates arrears. That is because the evidence I have seen satisfies me the registered address for Miss B’s business changed again in February 2023 to address 3. That is confirmed by Companies House.
36. I have seen no evidence Miss B provided details of address 3 to the Council before it began recovery action. While Miss B refers to the fact the Council could have checked Companies House I would not have expected the Council to do that unless it had post returned from the address it sent to the letters to. As the Council did not receive any returned post I see no reason why it would have had cause to believe it had the wrong address.
37. I am also satisfied all the Council’s recovery action, including the reminders, summons, liability orders and referral to the bailiffs, happened after February 2023. That is because recovery action had been on hold partly due to COVID-19 and the impact that had on the court system as well as due to changes to the Council’s IT system. I therefore consider, on the balance of probability, even if the Council had actioned the change to address 2 for the business rates account it would still not have sent the various bills to the right business address. That means if the Council had changed the address to address 2 it would not have prevented Miss B avoiding enforcement action. That was not, however, due to any fault by the Council but rather because Miss B had not told the Council her new business address was address 3. I therefore cannot say Miss B experienced distress due to being contacted by bailiffs as a result of fault by the Council.
38. Miss B says the Council treated her differently because it did not contact her by telephone as it did with other business operators when there was an issue. I would not expect the Council to contact each individual business ratepayer when a payment was missed. Failure to do that is therefore not fault. In any event, it appears the contact with Miss B’s neighbouring business was in relation to a refund that was due rather than chasing for outstanding payments. I therefore do not consider the Council has dealt with Miss B differently here.
39. Miss B says the Council failed to respond to various correspondence from her. The only contact I can see the Council failed to respond directly to was Miss B’s email of 18 December 2023. In that email Miss B challenged the amount outstanding and asked the Council to provide a breakdown. I am aware following that email the enforcement agent wrote to Miss B to outline the debt outstanding. However, that did not provide the breakdown Miss B had asked for in terms of how her business rates arrears had been calculated. I cannot see the Council provided that breakdown until it responded to Miss B’s father’s email at the end of January 2024. Failure to respond to Miss B’s email is fault. I recommended the Council apologise for that. The Council has agreed to my recommendation.
40. The Council accepts it delayed issuing a refund to Miss B. The Council accepts it should have completed that by March 2024 and failed to issue the refund until June 2024. That delay is fault. I consider an apology satisfactory remedy for that delay given the Council has also cancelled the bailiff fees which it did not need to do given they were not incurred due to any fault by the Council.
41. Miss B says the Council failed to consider her complaint properly. Having considered the Council’s complaint response I am satisfied it is comprehensive. What is clear though is that the response relied on the lack of evidence Miss B told the business rates department about the change of registered address for the business. It is now clear Miss B had provided details of a change of business address to address 2 in 2022 but it had not been sent to the business rates department but had instead been provided to the BID department.
42. I understand Miss B’s frustration here. However, although Miss B had referred in her complaint to telling the Council about the change of business address she did not indicate which department she had sent that to. In those circumstances I do not criticise the Council for relying on its business rate records when responding to the complaint.
43. Miss B says the Council delayed considering her complaint. The evidence I have seen satisfies me Miss B put in her complaint on 22 January 2024. Under the Council’s complaints procedure it had 20 working days to respond to that complaint. As the Council responded to the complaint on 15 February that was within the 20 working day period. I am therefore satisfied the Council did not delay considering the complaint.

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Agreed action

44. Within one month of my decision the Council should apologise to Miss B for the distress she experienced due to the faults identified in this decision. The Council may want to refer to the Ombudsman’s updated guidance on remedies, which sets out the standards we expect apologies to meet.

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Final decision

45. I have completed my investigation and found fault by the Council in part of the complaint which caused Miss B an injustice. I am satisfied the action the Council will take is sufficient to remedy that injustice.

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Investigator's decision on behalf of the Ombudsman