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UK's Small Business Association Welcomes 'Staircase Tax' Repeal

by Jason Gorringe, Tax-News.com, London

02 January 2018


The Federation of Small Businesses in the UK has welcomed the release of draft legislation by the UK Government that would "repeal" the so-called staircase tax.

The tax is the result of a tax court ruling which meant that businesses with offices in a building situated on non-contiguous floors were to be issued with separate business rates (commercial property tax) bills. The ruling has resulted in some businesses facing higher tax bills, most often due to the loss of small business rate relief. The FSB noted that it also applied to shared lifts and communal access roads to shared car parking spaces, and saw inflated bills backdated to 2015 in England and 2010 in Wales.

The UK's Communities Secretary, Sajid Javid, on December 29 published draft legislation to reverse the impact of the so-called "staircase tax." Javid said The Non-Domestic Rating (Property in Common Occupation) Bill would mean these firms can choose to have their rates recalculated under the old single bill system and any savings due will be backdated. He 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."

Responding to the bill's publication and the consultation, FSB National Chairman Mike Cherry said: "The Staircase Tax has arbitrarily penalized small firms simply because they shared a communal staircase, corridor, or even car park with another business. It is very good news that the Government has stepped in to repeal this ludicrous tax and I hope politicians of all parties will now back its abolition when it is put to Parliament."

TAGS: court | tax | small business | business | property tax | Federation of Small Businesses (FSB) | United Kingdom | legislation | Tax

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