Government moves to scrap controversial ‘staircase tax’

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The government has started the process to reverse the so-called ‘staircase tax’ to ease the pressure on small businesses.

Communities secretary Sajid Javid published draft legislation, which stands to benefit thousands of small business owners, to abolish the measure.

The loophole was first introduced after the Supreme Court ruled that an office spread over more than one floor in a mixed-use building would be taxed as two separate premises.

As a result, more than 1,000 businesses were braced to receive higher rate tax bills, with some paying more due to the loss of small business rate relief.

This tax relief previously enabled a discount to be applied on the bills of certain businesses with a lower rateable value.

Speaking after the draft legislation was published on 29 December 2017, Javid said:

“The ‘staircase tax’ is an unfair rates hike for businesses.

“I am ending this by giving those businesses affected the option of getting their rates bills recalculated and any savings due backdated.”

Chancellor Philip Hammond had earlier revealed in his Autumn Budget 2017 that no company will have to pay more in business rates because it occupies multiple storeys.

Delivering his Autumn Budget 2017, Hammond said:

“I’ve listened to businesses affected by the so-called ‘staircase tax’.

“We will change the law to ensure that where a business has been impacted by the Supreme Court ruling it can have its original bill reinstated if it chooses, and backdated.”

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