The Local Government Association (LGA) has asked the government for assurances that they will not lose out from new business rates valuation practice.
In the 2017 Budget, chancellor Philip Hammond promised to compensate businesses for a so-called “staircase tax” resulting from a 2015 Supreme Court ruling.
This found that companies occupying more than one adjoining floor but which used a communal staircase between floors should be taxed as if they occupied separate properties, barring them from accessing rates relief payments which they could only qualify for if they owned one property.
However, the LGA has expressed disappointment that there was no mention of reversing the tax in the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill 2017-19, currently making its way through parliament. An LGA briefing said: “The Government has indicated that the financial implications for local government are beyond the scope of the Bill.
They now view the additional revenue flowing from the Supreme Court decision as an unexpected windfall, with no associated liability for compensation for councils.
“It is disappointing that the government has reversed their Autumn Budget decision on the financial implications of this measure, and has indicated that no compensation will be payable to local government.
“We support the housing, communities and local government committee’s recommendation that the government needs to reassure councils that they are not going to be worse off financially because of this legislation, and that the government should bear the associated costs as a result of the reforms.”
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