Watch your step – here comes the staircase tax!


Escher’s Relativity may be a fair representation of many aspects of the tax system business face.

The Federation of Small Business (FSB) has warned that small firms in England and Wales are being slapped with back-dated business rates bills, following a change to the way in which the Valuation Office Agency (VOA) assesses shared staircases.

The change has come about thanks to a Supreme Court rules in the case of Woolway vs. Mazars, whereby accountancy firm Mazars successfully applied to the VOA to have multiple floors in a building occupied by the firm treated as one hereditament.

As the two floors of the building in question were not contiguous (they are on the 2nd and 6th floors) this was subsequently (successfully) appealed by Mr Woolway of the VOA, leading the Supreme Court to urge the Agency to apply “professional common sense” to such valuations.

In the Supreme Court’s judgment the previous decision did not appropriately consider the geography or function of the two floors in question – leading to its determination that they could not be considered a single hereditament.

Valuers are now treating multiple floors or units in a single building as individual units, providing they can satisfy certain tests. This has already led to some businesses receiving significantly increased bills.

This judgment is likely to add to the confusion and anger felt by many small businesses still reeling over the last wave of business rate controversy, and waiting for the implementation of reliefs announced earlier in the year.

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