Milsom Hotels Limited v The Environment Agency

Facts

The appellant, Milsom Hotels Limited, was identified by the Environment Agency as a "relevant undertaking" falling within the Energy Savings Opportunity Scheme, which requires large undertakings to audit their energy use in four-yearly cycles and to notify the Agency of compliance. For the third compliance period, the qualification date was 31 December 2022 and the compliance period ran from 6 December 2019 to 5 December 2023. The compliance date of 5 June 2024 was extended by the Agency and other regulators to 6 August 2024 because of delays in introducing a new notification system. The appellant's audited accounts recorded employee numbers of 268 in March 2019, 254 in March 2020, 213 in March 2021 and 288 in March 2022. Applying the "two-year rule", the Agency treated the appellant as retaining large undertaking status. No Notification of Compliance was submitted by the extended deadline, and on 29 April 2025 the Agency served an Enforcement Notice requiring the appellant to complete an energy assessment or explain why it did not qualify. The appellant appealed on 20 May 2025, contending it neither employed more than 250 people nor exceeded the turnover threshold at the deadline, that the retrospective qualification criteria were unclear, that its 2022 headcount was inflated by Covid-19 staffing measures, and that it had complied with Phase 2. The appeal was decided without a hearing.