Thousands of small firms hit by ‘staircase tax’
Thousands of small business across England and Wales are facing backdated hikes to business rates as the Valuation Office Agency has altered the way it assesses staircases.
It means that businesses will face individual rates bills for every floor they occupy in a building when the areas between floors are deemed to be communal.
This replaces the previous set up whereby a business would receive one business rates bill covering all occupied areas in a building – the old set up still applies for those who can access multiple floors via private staircases.
The move means thousands of businesses will face higher business rates, with the rises backdated to April 2015 in England, and back further to April 2010 in Wales.
Mike Cherry, National Chairman of the Federation of Small Businesses, has slammed the move, saying that it “serves as yet another reminder of what a regressive system our entrepreneurs are faced with when it comes to tax”.
He added: “How can it be right that you’re hit with a massively inflated bill simply because the staircase you use is shared and not private?
The FSB added that many of the firms hit are those that are yet to receive any of the relief measures first announced in March this year, and called for an urgent review of the current system.
Up to 30,000 small business could face rates increases following the ruling by the Supreme Court, and it thought some firms may have to pay up to £15,000.
For businesses operating on tight margins, this could significantly impact their ability to trade, to hire staff and to focus on other forms of growth.
It may even drive businesses into administration if they are unable to overcome their debts, while others may be forced to move premises or consider other insolvency measures as a result of the higher bills.
A spokesman for the Valuation Office Agency said they have a “responsibility” to maintain up-to-dates rates, although several politicians have spoken out against the changes.
By Phil Smith