Death of the Staircase Tax
Ever since the Supreme Court decision in 2015 on Woolway (VO) v Mazars (2015 UK SC53) the Valuation Office Agency (VOA) have set about splitting the Business Rates assessment for properties spread over several buildings or several floors, where previously they had been assessed together under one assessment.
That decision over-turned decades of VOA practice and required that in order to be assessed together there had to be some form of internal access between the buildings or floors. If you had to go completely out of one part to get to another they could no longer be assessed together.
It also affected how car parking spaces were treated. Typically, car spaces were included in the main assessment but now if they are within a shared parking area they are assessed separately.
Having several assessments, instead of just the one, meant people lost out on things like Small Business Rate Relief. They could also lose out further by having a higher overall Rateable Value as, in many cases, smaller individual assessments total more than just the one assessment.
Thankfully though, royal assent was recently given to the ‘Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018’. The first part of this act effectively over-turns most elements of the Woolway v Mazars decision and inserts the phrase ‘contiguous’ into the Local Government Finance Act 1988, as well as defining what it means in the context of Business Rates. In this instance ‘contiguous’ simply means ‘touching’.
So now, as long as the buildings or floors touch each other in some way then they can be put back into one assessment again – provided of course they are in the same occupation.
With car parking the new act won’t, in most cases, overturn what the VOA has done. However, some people found not only were they stung with a separate assessment for car parking but their main assessment wasn’t reduced accordingly, so they too found their overall liability increasing.
If you are affected by any of this, or need help generally with Business Rates, call Steve Bicknell of Brown & Co on either 01476 514453 or 07500 065988. He can carry out a free initial appraisal of your Rateable Value and then advise whether it is worth taking the matter further – allowing you to weigh up the cost of doing so against the chances of success