‘Staircase Tax’ abolished by Autumn
The Chancellor’s November budget pledge of changing the law so as to reinstate businesses’ rates liabilities that increased due to the ‘Mazars’ case, will be on the statute book by the Autumn.
The practical implication of the Supreme Court’s judgement is that businesses occupying consecutive floors or adjoining parts of a multi-occupied building, typically an office, should have separate rating assessments for each floor, or parts of it, when there is no interconnection such as a private staircase or doorway.
Following the judgement, the Valuation Office Agency has been retrospectively splitting assessments from April 2015, meaning affected businesses receive rates bills for each floor. This has often led to a higher combined charge due to a full or total loss of quantum discount that applied when their premises had a single rateable value.
In order to deliver the pledge but without offering further concessions, regulations have been drafted with the aim of allowing businesses who wish to reinstate their original liability a one year window to appeal from later this year. The regulations have been tightly drafted to prevent windfalls and not to re-open a general 2010 list right of appeal.
Turning to the current 2017 rating list and beyond, the legislative change will ensure businesses occupying adjoining floors or parts of buildings should, once again, have a single rateable value.