Draft legislation published to end the unfair ‘staircase tax’
Communities Secretary, Sajid Javid, has published draft legislation to reverse the impact of a ‘staircase tax’, which has unfairly affected up to a thousand businesses.
The draft legislation follows a decision in the Supreme Court (Woolway v. Mazars) which brought about a change to the practice of the Valuation Office Agency (VOA) in assessing rateable values for businesses.
Following this ruling, businesses who occupied more than one property in a shared building received a separate rates bill for each unit. This was widely known as the ‘staircase tax’ and meant businesses in adjoining units who had previously received one rates bill, were now being subject to several bills. Some businesses were paying more overall due to the loss of small business rate relief – a discount applied to the bills of certain businesses with a lower rateable value.
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.
Subject to Parliamentary approval of the Bill, those businesses who have been directly impacted by the Supreme Court judgment can ask the VOA to recalculate valuations based on previous practice. It can then have its bill recalculated if it chooses, and backdated. This includes those firms who lost small business rate relief.
The department will now consult with stakeholders and experts, with a view to introducing the Bill shortly. See the consultation document.
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.”