Small firms across England and Wales are being hit with backdated business rates hikes because of changes to the way the Valuation Office Agency (VOA)assesses staircases.
Previously, firms that occupied multiple floors within a commercial property would receive a single business rates bill covering all occupied areas. Following a Supreme Court ruling, businesses now receive individual rates bills for each floor they occupy, provided the areas between the floors are communal.
Firms will continue to receive a single rates bill if they occupy multiple floors but can access them via a private staircase or walkway.
The change will result in substantially increased business rates for thousands of firms. The increases are backdated to April 2015 in England and April 2010 in Wales.
Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said: “This latest twist in the business rates tale serves as yet another reminder of what a regressive system our entrepreneurs are faced with when it comes to this tax.
“How can it be right that you’re hit with a massively inflated bill simply because the staircase you use is shared and not private? And these bills are backdated, stinging firms that are still waiting on delivery of relief measures announced more than five months ago.
“Enough is enough. Any sensible person can see that the business rates regime is fundamentally flawed, penalising firms before they made their first penny in turnover, let alone profit. A fundamental review of the tax is long overdue.”