The Chancellor’s Budget announcement to scrap the “staircase tax” was welcomed by small businesses who had been forced to pay extra in business rates if they operated on multiple floors of a mixed-use building.
However according to John Webber, Head of Business Rates at Colliers International, “Not only will many businesses now have to go through a no doubt expensive appeal process to get this repaid, but many Councils up and down the country will need to work out how to implement and fund this.”
Places like Tower Hamlets were major beneficiaries of the tax and will have to refund the monies collected, back to 2010. Colliers estimate this could cost the borough up to £20 million, on top of the time and administration burden.
“Whilst the staircase tax may have been an unforeseen windfall at the time, it will undoubtedly have already been spent in those boroughs that collected it, “says Webber. “And since Tower Hamlets is home to the Canary Wharf financial district, many of the giant financial institutions and banks will be able to make claims to the borough for the tax they overpaid. “
Calculations by Colliers indicate that in total it will cost as much as £50m to reverse the tax throughout the UK, backdated to 2010- but that Tower Hamlets would have by far the most to repay of any borough because of Canary Wharf.