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Stairway to Heaven - Undoing the 'Staircase Tax'

on Tuesday, 15 May 2018.

The Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill proposes to change how business rates are calculated...

...And to address the deeply unpopular 'staircase tax' which followed the Supreme Court's 2015 decision in Woolway (VO) v Mazars LLP.

Following Woolway, adjacent floors of a building which may only be accessed by common areas (such as a shared staircase) were assessed separately during a business rates assessment. This has deprived many tenants of reliefs which are available for larger properties and so increased the sums payable for business rates.

The draft Bill intends to revert to the situation before Woolway so that contiguous property units occupied by the same occupier would be considered to be a single unit even if only accessible by a common area.

Following representations by the Property Litigation Association, the draft Bill was amended to also cover situations where there is a void space between floors of a building, or between two units on the same floor, or where there is an unoccupied area between them, to ensure that these units are also treated as contiguous.

It is intended that this will bring a common sense approach to the valuation of business space which would generally be considered to be one unit rather than several, and to resolve practical difficulties for ratepayers and practitioners alike.

The Bill recently passed through a public bill committee on 1 May 2018 and will now progress on to the Report Stage and Third Reading.

If you are a business tenant and are concerned about your liabilities, please contact a member of our Property Litigation team on 0117 925 2020.

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