The Chancellor promised to solve the problem of the “staircase tax” in his Budget speech. This is not a tax, it’s an increase in business rates suffered by small businesses which occupy more than one part of a shared building.

In July 2015 the Supreme Court ruled that where a tenant occupies two or more parts of a building, and it is not possible to move between those parts without entering a common area such as a staircase or corridor, those areas must be treated as separate rateable units for calculating business rates.

Small businesses have been receiving increased business rates bills back-dated to 2015, based on that Supreme Court ruling. Some businesses have found that they lose all of the small business rates relief, as they are now deemed to occupy two units instead of one. That relief can only be claimed if the business uses just one property.

Hammond has promised to change the law to eliminate the staircase anomaly, and that businesses will be able to have their original rates bill reinstated, and backdated to 2015. This process of changing the law could take some time, and it will take local authorities even longer to issue amended rates bills, so this is not a quick fix.

Business rates are automatically increased every year by inflation, as measured by the RPI. This tends to give a higher rate of inflation than the consumer price index (CPI), as the RPI includes housing costs, which makes no sense for business rates. From 2018 the increase in business rates based on the CPI measure of inflation.

Also, revaluations of the rateable value of business properties will be undertaken every three years instead of every five years. In fact, the last revaluation was delayed, so there was a gap of seven years between valuations, leading steep increases in rates for certain businesses.