Draft legislation has recently been published to revoke the so-called ‘staircase tax’, as the Government pledges to recalculate business rates and payout backdated savings for those affected, says commercial property agent Prop-Search.
After mounting pressure from the small business community, Government communities secretary, Sajid Javid, announced that a new repeal bill will pass through the Houses of Parliament, while a public consultation will seek the views of business owners.
Samantha Jones, an Associate Director at Prop-Search, said: “Under ‘staircase tax’ rules, companies operating over several floors within the same property are handed separate business rates assessments for each occupied floor - provided that the floors are separated by communal spaces including staircases, corridors and elevators - as opposed to one bill for the entire premises.”
The tax was initially introduced after a landmark Supreme Court ruling - Woolway v Mazars - in August 2017 and backdated to 2015, which resulted in businesses facing higher rate bills, with some paying even more due to the loss of small business rate relief. The new legislation will allow affected firms to have their rates recalculated under the old single bill system, with any savings due backdated.
Once the Government's draft legislation is enacted, those businesses who have been directly impacted by the court case can request the Valuation Office Agency (VOA) to retrospectively recalculate valuations based on previous practice.
Chancellor Philip Hammond first signalled the abolition of the levy his Autumn Budget announcements having reportedly ‘listened’ to the concerns of small business owners.
Samantha concluded: “The publication of the draft regulations reaffirms the Budget commitment to rid the system of what became a ‘stealth tax’ and returns businesses back to the position they were in before the ‘Mazars’ ruling.”
Further information or advice can be obtained from Prop-Search - Tel: 01933 223300 or its website: www.prop-search.com