Skip to Content

What is the staircase tax?

What is the staircase tax?
Monday, October 02, 2017

It’s caused a lot of controversy in the press, but what exactly is the staircase tax?

 

It’s all to do with the non-domestic rates, more widely known as the business rates.

 

How business rates are worked out

 

Each commercial premises in the UK has an “open market rental value” as determined by the Valuations Office. Whether what you pay is rent is actually the open market rental value is immaterial as it’s only the opinion of the Valuation Office that decides the rate you pay.

 

If you’re in commercial premises currently or you wish to work out what the open market rental value of commercial premises you’re about to move into are, click here.

 

If your open market rental value is more than £51,000, you multiply that by 0.479 to find out the size of your business rates bill. If your open market rental value is between £15,001 and £50,999, you multiply it by 0.466. (Rates are different in the City of London).

 

If your business premises have an open market rental value of £12,000 or less, you don’t pay any business rates. Between £12,001 and £14,999, you get pro rata relief on your business rates. So, if your open market rental value was £13,500 (half-way between £12,001 and £14,999), you take your open market rental value, multiply it by 0.466, and then multiply it by 50%.

 

Back in 2015…

 

…the Supreme Court came to a verdict in the case of Woolway (Appellant) v Mazars (Respondent).

 

This changed the way that business space was defined. As described in Accounting Web, "the VOA has begun allocating different bills for individual floors and workspaces that are only linked by public areas."

 

In the past, businesses which occupied multiple floors within the same commercial premises would receive just one business rates bill. That bill would cover all the occupied areas.

 

What’s changed is that they now receive individual business rates bills per floor if the areas between the floors are communal. A business will continue only to receive one business rates bill if the connecting staircase or lift is private and for their use only, however.

 

Why does this matter?

 

Two reasons – cost going forward and cost going backward.

 

Going forward, having two or more separate business rates bills will mean higher ongoing yearly charges. In addition, some companies which are now deemed to have more than one premises will no longer qualify for small business rates relief.

 

Going backwards, the VOA is also backdating its recalculations to 2015 in England and 2010 in Wales.

 

Speaking to BBC News Online, Carolyn Saddington, director of digital marketers Loyalty Matters in Harrogate, explained that the agency was spread out over three offices on two floors of a building.

 

She said, “Our offices - because they are separated by a [communal] staircase and a small amount of carpet - are now assessed by the Valuation Office as three separate properties ...The ridiculous thing is that there is a wall between two offices. We could knock a door through then the Valuation Office would have to assess it as one property. It is absolutely crazy."

 

Carolyn told the BBC that if their office was a single unit, the company would be eligible for 100% rate relief but this change in how business rates are calculated means that they will have 100% tax relief on one office but pay rates on the other two. They also received a backdated rates demand of £4,000.

 

The future

 

This will go one of two ways – either the Government will come and change it to the way it was before, or it’s going to get worse.

 

The Sun newspaper reported that documents they had unearthed from the Valuations Office stated that, "car parking needs to be separated from offices - this cannot be avoided.”

 

After vocal complaining by the Federation of Small Business, Nicky Morgan, chief of the Commons Treasury Committee told the Sun that “I certainly support the FSB on this - it can’t be right for businesses to suddenly be asked to find money for something they didn’t know they might be liable for.”

 

Find out more

 

If you’d like to speak with us about the staircase tax or anything to do with business rates, please get in touch with the team on 01235 768 561 or email enquiries@pantheraaccounting.co.uk.

WHAT OUR CLIENTS SAY

For us, there is nothing better than a happy customer. Here are just a few that let us know how much we mean to them.

Pete Dungey

Simple, efficient and most importantly, hassle-free.

We found Panthera via our search for a Xero expert. We knew the software we wanted to use, and needed a forward-thinking accountancy partner who could get us up and running, and teach us the ropes moving forward. Tory and her team have always been on hand to answer our questions, and help us to grow as a business, particularly during periods of big change, such as becoming VAT registered. They are always on hand to alleviate any concerns and help to keep our records in order, which makes our year-end accounts an absolute breeze! Being based in Bristol, our relationship is entirely email based, alongside one consolidation meeting at year end - this keeps things simple, efficient and most importantly, hassle-free.

Pete Dungey | Kaleido Grafik Limited
Anita van Eijndhoven

Talk Our Language

The support and service we receive from Panthera Accounting is very good. Everything from regular meetings, a prompt e mail response and the transition of our Xero software (which we find very pro active indeed) has and is all remarkably efficient. We find Panthera talk our language and make any process as painless and easy as possible.

Anita van Eijndhoven | Quidne-IT
Ash & Tim Lane

Panthera brush aside the stereotype of the typical accountant

We got in touch with Panthera Accounting by way of a recommendation; we haven't looked anywhere else since. They are an extremely professional yet relaxed group of people. We were slightly daunted by the idea of accountants but Panthera brushed aside y the stereotypes. They are very understanding when answering any questions we may have. They are completely efficient, offer sound business advice, and are fantastically priced. We will continue to recommend them.

Ash & Tim Lane | Starveacre Fencing
Jayne Johnson

An Asset to my Business!

The whole team at Panthera are great! Working with them has been a huge support to my growing business. They help me to understand the numbers I need to know. They give me technology solutions like Xero so that I can process things quickly and have access to my own figures. They are quick to reply, highly knowledgeable, nothing is too much trouble and as well as making sure that everything is compliant and on time, they are enthusiastic, professional and fun to work with.

Jayne Johnson | Better People
John Baker

Absolute joy - they provide a first class service on every level

Working with Tory and the team at Panthera is an absolute joy - they provide a first class service on every level; from simple Xero issues through to more complicated tax enquiries, they’re always on-hand to help me get it right. I’m certainly not their biggest customer, but I’m always made to feel like their most important one.

John Baker | BKR Solutions
John Castle

Professional and Friendly

I would like to say that Panthera Accounting have helped me with my business accounts for more than 4 years now. They have consistently offered an excellent competitively priced service that works both professionally and in such a friendly way that I would highly recommend them to everyone considering using their services.

John Castle | Ilexanna Limited & Birch Castle Homes Limited
Jonathan Morrison

They are always there to answer queries and sort out issues

I had been with Mr Dunn for 20 years when upon his death Panthera took over the business. They now play a bigger part in the running of my business, they do all the stuff that has to be done but I don't like doing ie book keeping, VAT, wages, and returns. They are always there to answer queries and sort out issues and make sure all Tax deadlines are met. Their costs are fair, service is great and I have and would highly recommend them.

Jonathan Morrison | Wallingford Builders
Pippa Scott

Professional, friendly and personal service.

Panthera Accounting have gone above and beyond the call of duty to guide and support our Company. They offer a professional, friendly and personal service that can take the stressful and sometimes frightening feelings out of running a business. They have guided us through the working of Xero and have offered “teaching sessions” on the day to day running of the accountancy package. Our only regret is that we didn’t join their team earlier.

Pippa Scott | Scott's Commercial Services Limited
Sara Southey

Panthera puts the personal back in to accountancy!

Tory and her team have provided a friendly, approachable and helpful service from the start. They have delivered a quality service, above and beyond anything I could have expected. Panthera, with the help of the Xero package, have taken the stress, strain and confusion out of managing my company and personal accounts. I look forward to working with them for many years to come.

Sara Southey | Bluestones Garden Design
Tracey Miller

Panthera are fantastic.

Panthera are fantastic. Always professional, going the extra mile for their clients and delivering superb service. I recommend them all the time to my clients.

Tracey Miller | Bigger, Brighter, Bolder BBB

CONTACT US

Lets Get Started

Panthera will use the details that you have entered into this form to communicate with you on the subject of your message, and for no other purpose. Please see our privacy policy for more details on how we manage your data.

Move to Panthera

Moving to Panthera is as easy as 1,2,3...

  1. We have a short initial discovery meeting (online or in-person) to create the perfect service package for your business
  2. You e-sign your terms of engagement
  3. We get your authority to talk to HMRC on your behalf

And that’s it! From contacting your previous accountant, to updating Companies House with your new registered office address, let us handle all of the admin so that you can get on with running your business, safe in the knowledge that everything is going smoothly in the background.

TALK TO US