Nicky Morgan brands 'staircase tax' business rates rises as 'unfair'

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Nicky Morgan was formerly education secretary (Source: Getty)

Changes to the way in which business rates are evaluated, dubbed the “staircase tax” by critics, are “unfair”, according to the head of an influential parliamentary committee.

Nicky Morgan, the head of the Treasury Select Committee, has written to the head of the Valuation Office Agency (VOA) asking her to explain the agency’s approach to collecting business rates.

A Supreme Court ruling from 2015 said companies in shared-occupancy buildings must pay separately for each floor if they are accessible from a communal staircase. The VOA has started enforcing the ruling, meaning multiple floors in a single shared building could end up being charged as a separate premises.

Companies occupying multiple floors which are reached via private staircases are still charged as a single premises.

Read more: More business rates woe: bills to increase £1.2bn next year

In the letter sent today to VOA chief executive Melissa Tatton, Morgan said: “On the face of it, it seems unfair to tax businesses differently depending solely on whether the staircases between their rooms are communal or private.

“It seems particularly unfair for the increase in rates to be backdated,” she added.

The letter from Morgan, the former education secretary under ex-Prime Minister David Cameron, will also seek answers on the analysis of winners and losers, how many businesses will be affected, and what increases in their bills will be.

The business rates system has come under increased scrutiny over the past year after a long-delayed revaluation of property prices saw the amount charged on non-domestic properties surge for some small businesses.

In March chancellor Philip Hammond set aside £300m in the Budget to grant relief to businesses, although firms in the capital have heavily criticised delays in handing out the relief.

Read more: Treasury confirms business rates to be reformed in 2020

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