Mazars Supreme Court Decision – the ‘staircase tax’ legislation
A Supreme Court decision which overturned a policy which had been in existence since the 1950’s regarding the process used to calculate business rates payable on multiple properties occupied by the same ratepayer caused disruption and uncertainty between July 2015 and November 2017.
Although the ruling concerned offices, the principle affects many other property types including adjacent industrial buildings. In fact, any occupation made up of more than one unit or building is potentially impacted.
The Valuation Officer’s changes to assessments as a result of this ruling often resulted in higher individual rateable values and consequently increased business rates liabilities.
The Supreme Court ruling was controversial, reversing decades of logical and well established rating practice. In addition to higher basic rateable values, many businesses were deprived of common allowances, reliefs and exemptions adding considerably to their overall business rates liability.
Branded the “Staircase Tax”, the Mazars decision has been universally unpopular.
After months of lobbying by business groups and property professionals, in November 2017, Government announced a change to legislation, effectively returning the law to the position which existed before the Supreme Court’s unexpected ruling in Mazars.