Recent changes to the way co-working spaces are assessed for business rates are causing considerable concern in the business community. Some estimate that the changes amount to a £600 million stealth tax raid.
Previously, shared workspaces have been assessed for business rates based on the individual units. This usually means that the rateable value is low enough to qualify for Small Business Rate Relief (SBRR).
However, because of a legal ruling, the VOA is now valuing shared workspaces as a single establishment. This pushes the rateable value too high for SBRR to apply.
The Federation of Small Businesses (FSB) estimates that nearly 4,000 shared offices could be impacted by the change. Some estimate that small businesses could be facing increased rental costs of £5,400 per year.
Shared offices are often a good first step for entrepreneurs looking to expand from a home setup and into commercial premises. However, many small business owners could now be returning to working from home.
The government is consulting on potential measures that target Electronic Sales Suppression (ESS). Proposals include the introduction of new software standards for Point of Sale systems. Electronic Sales Suppression (ESS) involves businesses using software or devices to manipulate Electronic Point of Sale (EPOS) systems to hide transactions and evade tax.
The June 'UK Report on Jobs' shows subdued business confidence driving a preference for short-term staff. Temporary staff billings rose at the steepest rate in over three years, while permanent staff appointments continued to decline, although at a much slower pace than in May.