Government publishes staircase tax repeal Bill

UK tax system

The government has published a draft Bill to repeal the so-called staircase tax that has adversely affected businesses in England and Wales.

The staircase tax affected businesses with offices on multiple floors of a commercial property. Such businesses had been receiving separate, backdated business rates bills for each floor occupied, provided the areas separating the offices were communal. Some firms in England and Wales saw their business rates rise as a result.

Business rates are calculated separately in Scotland, using the rateable value, which is set by a local assessor, and the ‘poundage rate’, which is set by the Scottish government.

Under the Bill, affected firms in England and Wales will be able to choose to have their business rates recalculated under the old, single bill system. The government stated that any savings due as a result will be backdated.

Meanwhile, in the 2017 Autumn Budget, Chancellor Philip Hammond also confirmed that future business rates revaluations will take place every three years rather than every five years, beginning after the next revaluation, which is currently due in 2022.

Commenting on the draft Bill, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: ‘The staircase tax has arbitrarily penalised 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.’