Staircase tax to be reversed
03/01/2018

The Government has announced that the business rates anomaly known as the ‘staircase tax’ is to be axed. The 'staircase tax' affects businesses that operate in adjoining units or rooms, but are accessed from a communal lift, corridor or staircase. For example, a business that has offices on two floors of a building that are accessed via a communal staircase. Such businesses are unfairly treated as they presently pay rates as if occupying two totally separate properties.

The 'staircase tax' was not introduced by the Government but arose following a Supreme Court ruling in 2015 which brought about a change to the practice of the Valuation Office Agency (VOA) in assessing rateable values for businesses. This ruling overturned an established and widely understood practice where businesses occupying two adjoining floors or two rooms separated by a wall only received a single bill. This ruling appears to have disproportionately affected small businesses.

Communities Secretary Sajid Javid said:

'The 'staircase tax' is an unfair rates hike for businesses. For years these businesses in adjoining units or rooms received one rates bill, but this ruling meant they now faced multiple bills for operating in an office linked by a communal lift or stairs.

I am ending this by giving those businesses affected the option of getting their rates bills recalculated and any savings due backdated.'

Planning note

Once the necessary legislation is in place, businesses will be able to choose to have their rates recalculated under the old single bill system and claim backdated refunds. Businesses will also be able to continue to benefit from any small business rate relief they had lost by virtue of the 'staircase tax' rules.


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