Staircase tax set for the scrapheap as firms enjoy £40m boost

The so-called “staircase tax” is to be axed on Thursday as a law scrapping the levy comes into force, giving businesses a £40 million a year boost.

Its abolition also means thousands of firms across England will be able to ask for tax rebates to business rates bills going back as far as 2010.

The staircase tax was the result of a Supreme Court ruling on the definition of a single business space.

Under the law, offices covering multiple floors in a building were billed separately if their corridors or staircases were communal, rather than private to the business.

This increased the overall amount of business rates they paid while barring them from accessing rates relief, which they could only qualify for if they owned one property.

Legislation reversing the effects of the Supreme Court ruling will receive royal assent on Thursday.

It is estimated to save firms in England £40 million a year, according to the Office for Budget Responsibility.

Alex Probyn, president of UK expert services at real estate adviser Altus Group, described the changes as a “victory for common sense”.

He added: “The Government should be applauded for listening and acting decisively to return firms to the tax position that they were in before the court ruling. Be in no doubt this is a big post-Budget rates boost with the Government making it clear that these appeals will be prioritised.”

It comes after an industry backlash over the tax, which faced cross-party criticism from the likes of Tory MP and Treasury Select Committee chairwoman Nicky Morgan, shadow business minister Chi Onwurah and Liberal Democrat leader Sir Vince Cable.

When the changes were originally put forward, the then communities secretary Sajid Javid described the staircase tax as an “unfair rates hike for businesses”.