Staircase tax to be repealed

The government has recently published a draft Bill to repeal the so-called ‘staircase tax’ that has adversely affected a large number of Oxfordshire’s businesses. The abolishment of the staircase tax was first announced by the chancellor Philip Hammond in the Autumn Statement back in November 2017.

The staircase tax applied to businesses that occupy more than one floor in a multi-let building. Previously, businesses that occupied more than one floor within one commercial property would be given a single business rates bill, covering all occupied areas.

Following the Supreme Court decision of Woolway v Mazars, the VOA was forced to change the way it assesses staircases in commercial premises. It now assesses each floor separately in multi-let buildings if an occupier has to access an adjacent floor in a building via the common parts (lift, corridor or staircase). The ruling states that where a tenant occupies two or more parts of a building, and it is not possible to move between those parts without entering a common area such as a staircase or corridor, those areas must be treated as separate rateable units for calculating business rates.

However, business owners continued to receive a single business rates bill if their firm occupies multiple floors that can be accessed by private staircases or walkways.

The staircase tax resulted in significantly higher business rates bills, many of which have been backdated to April 2015. For many smaller businesses this has taken them over the threshold for small business rates relief.

The staircase tax has been widely criticised amongst the property and business communities for unfairly penalising firms with separate office spaces in the same building. The government has now fully acknowledged the unfairness of the situation and has committed to reversing the unintended consequences of the Mazars ruling. Business owners affected by the staircase tax will have their original bills reinstated to that as it was prior to the decision.

If your business has been affected by the staircase tax, contact Robert Seares of RDS Commercial for advice on 01993 705594 or