1.In the 2017 Autumn Budget the Chancellor announced that the Government would legislate to reinstate the relevant elements of the Valuation Office Agency’s (VOA) practice prior to the decision of the Supreme Court in Woolway v Mazars  UKSC 53. The Court found that the longstanding practice of the VOA in identifying rateable premises in multi-occupied buildings did not reflect current law, ruling that where a business occupies, for example, more than one floor of an office block, and access between the floors is via common parts, the VOA must treat those two floors as separate properties for business rates purposes. The effect of this ruling has become colloquially known as the ‘staircase tax’. On 29 December 2017 the then Department for Communities and Local Government published a consultation and draft Bill, the draft Non-Domestic Rating (Property in Common Occupation) Bill. The object of the draft Bill was to return the VOA’s practice to its position prior to the Supreme Court judgment.
2.The then Minister for Local Government, Marcus Jones MP, wrote to the Committee on 3 January 2018 to inform us of the publication of the draft Bill and consultation, highlighting the short eight-week consultation period which he believed would “allow sufficient time for rating experts and others to consider and discuss” the draft provisions, “hoping” that this met with our approval. The consultation period closed on 23 February 2018 and on 28 March 2018 the Government presented to Parliament the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill 2017–19. Second Reading of the Bill has since been scheduled for 23 April 2018.
3.The Bill as presented also contained separate provisions, not included in the draft Bill and consultation, to permit a charge of up to 200% of normal council tax on properties that have been empty for two years or more, instead of the current limit of 150% (known as the ‘empty homes premium’). This was a separate policy commitment also made at the time of the Autumn Budget 2017. This Report does not, therefore, extend to consideration of these separate provisions.
1 Autumn Budget 2017, HM Treasury, Paragraph 3.27
2 Previously, the VOA took a discretion to value such areas as a single property, if this reflected actual use by the occupier, or to value two areas separately, for example if separate leases were in place. The judgment put an end to this practice. For more information on the judgment and the ‘staircase tax’ see: , House of Commons Library Insights blog, 9 November 2017.
3 Business rates in multi-occupied properties: Consultation on reinstating the practice of the Valuation Office Agency prior to the decision of the Supreme Court in Woolway v Mazars  UKSC 53, Department for Communities and Local Government Committee, December 2017
4 Correspondence from the Minister for Local Government to the Chair of the Communities and Local Government Committee, 3 January 2018. This and all other correspondence between the Committee and Department on the draft Bill are provided in Appendix 1 of this Report.
5 Compared with the draft Bill, so far as material, the Bill (a) adds separate provision to treat empty premises as a single unit for rating purposes where they were so treated while occupied; and (b) adds to the definition of ‘contiguous’ in three ways: (i) altering vertical contiguity so as to apply where properties are “on consecutive storeys” and the floor of one is directly above the ceiling of another (mitigating the effect of any void), (ii) providing that a space between premises is not fatal to contiguity, and (iii) adding fences and other means of enclosure (the draft Bill included only “walls”) as acceptable means of horizontal division.
Published: 18 April 2018