Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Written evidence submitted by Wienerworld Limited (RCTB02)

   

Wienerworld Limited  -   Mazars Case and Business Rates :-  Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill 2017-2019

 

As a local Harrow East resident, I brought to Bob Blackman MP’s attention the Mazars Case as recently upheld by the Supreme Court, or otherwise known as the "Staircase Tax" and it’s effect on our company.

 

Bob Blackman MP commented in his various statements to The House during the 2 nd reading of the Bill this week that we are one of the 30,000+ SMEs who have been hit by large rates uplifts as the "Staircase Tax" came into play, meaning those businesses who have adjoining offices on more than one floor in the same building are now paying rates as if they were in separate premises.

 

I returned from holiday in early September 2017 to be greeted with a 22 page letter from the Valuation Office Agency (VOA) and 9 Rates Bill Demands from London Borough of Brent.

 

The missive from the VOA was for a Notice of Alteration/Revaluation from the 2010 to 2017 Rating List reflecting an increase in rateable value of our ground floor unit (Unit 7) and our first floor unit (Unit 17) from £5,000 to £5,800, a swingeing increase of 16%.

 

The nine Rates Bill Demands were not for arrears of current rates to Brent but were levied due to the ruling by the Supreme Court in the Mazars Case.  This allowed the VOA and Brent to go back to 1 April 2015 and claim a vicious tax claw back for 2015-16 and 2016-17 of another £2,979.52. This is all because we have two 400 sq foot offices on different floors (ground and first) served by a common corridor and staircase. Additionally we lost any transitional relief and Small Business Rates relief. 

 

The 2017-18 Rates Bill Demand was particularly aggressive because it took into account not only the Mazars ruling levy, but also the increase in rateable value and the loss of any transitional relief and Small Business Rates relief.  Like many other businesses, we closed down our 2015/2016 and 2016/2017 accounts over 18 months ago and were angered that we were forced to pay back dated Business Rates going back so far.

 

When I came into work on that morning, I had no idea that the Supreme Court ( and ultimately the Government ) would have dreamed up an £8,344.59 welcome home gift which we have had difficulty in paying.

 

I have attached copies of all of the demands and the VOA correspondence on the following links:

 

VOA

http://bit.l y /2 f 0jA0I

 

Brent Council Invoices

http://bit.ly/2y0hanp

  

No small business should ever receive a sudden tax hike clawing back tax retroactively from 1 April 2015, simply because a work space which has been separated for years by a communal area, stairway or lift and operating on different floors or corridors in a mixed use building, should suddenly be rated as two separate premises.

 

The existing approach to assessing the rateable value of businesses and offices is well established and has been in place for over 60 years, with a general rule that two heriditaments in the same occupation and contiguous should form one hereditament. Such is the case for Wienerworld , as we run our business out of a ground and first floor office units connected by a common staircase.

The effect of the Mazars Supreme Court Case has caused me personal business chaos as I have campaigned through the national press and with members of Parliament to try and get this ruling overturned whilst still running a business. The backdated Rates demands were technically payable immediately to LB Brent, who after much negotiation allowed me the opportunity to pay off those back dated Rates not in one lump sum but over 5 months. However those back dated Rates payments and the current Rates bill payments have placed a significant drain on our cash flow, even with the knowledge that if the Bill becomes law there is a good chance of all those back dated Rates payments being repaid to us together with interest. I sincerely hope that if the Bill becomes law, the various Rating authorities and Councils will ensure there is a simple fast track procedure for businesses to be repaid all back dated Rates payments swiftly, easily and effortlessly.

The newspapers have been full of articles urging the Chancellor to plug this legal loophole and it is comforting to be tracking this much needed Bill as it makes its way through The House. I have reached out to the press, my local MP Bob Blackman and Nicky Morgan MP at the Treasury Select Committee and I wish to publically thank them for their help.

I applaud the Government’s efforts to rethink this unfair tax and urge all those involved in the law making process to bring this business rates nightmare to an end and remove this unnecessary tax burden from all businesses.

 

Thank you for your time and I look forward to following the Bill through to its logical conclusion with a complete cancellation of the Staircase Tax.

 

Yours sincerely

 

Anthony Broza

CEO

 

Wienerworld Limited

April 2018

 

Prepared 2nd May 2018