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Staircase tax


For over 50 years, businesses who occupied more than one unit of property in a building shared with other businesses were assessed for Business Rates based on a simple rule. Where their units of property were contiguous (touching) then they received one rates bill. Where their units of property were separated by another business or an area in shared use, then they received a rates bill for each unit of property.

This meant that where a business occupied two adjoining floors of a building or two rooms separated by a wall only, then they received one rates bill. Where the business occupied two floors separated by another floor used by another business or they occupied two rooms on either side of a common corridor then they received two rate bills.

This rule was widely understood and accepted by ratepayers, their representatives and the Valuation Office Agency (who are responsible for assessing Business Rates). However, in 2015 the judgement of the Supreme Court in Woolway (VO) v Mazars [2015] UKSC 53, cast doubt upon this and as a result the Valuation Office Agency had to change its practice.

The practice of the Valuation Office Agency is now that separate units of property in a shared building should be treated as separate rating units and therefore receive their own rates bill irrespective of whether they are in the same occupation and are contiguous.

As a result many ratepayers who were previously receiving only one rates bill are now receiving two or more. In some cases they have had to pay more in Business Rates as a result of this change.

In the 2017 autumn budget, the chancellor announced that the government will legislate to reinstate the relevant elements of the Valuation Office Agency’s practice prior to the Supreme Court decision.

The Non-Domestic Rating (Alteration of Lists) and Business Rate Supplements (Transfers to Revenue Accounts) (Amendment etc.) (England) Regulations 2018 came into force on the 17 December and ratepayers can now propose an alteration to their 2010 or 2017 list assessments.

For 2017 list assessments, ratepayers should use the check and challenge service and follow the guidance to notify the Valuation Office the check relates to the ‘Woolway v Mazars’ case.

For assessments that were split between 1 April 2010 and 31 March 2017 ratepayers have until 31 December 2019 to make a proposal.

You can download a revised proposal and read relevant guidance on the Valuation Office Agency website.