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Changes to how co-working spaces are assessed for business rates are causing concern among business groups. Some estimate the changes could represent a £600 million stealth tax increase.
Previously, shared workspaces were assessed individually, often qualifying for Small Business Rate Relief (SBRR). However, following a legal ruling, the Valuation Office Agency (VOA) is now treating them as single entities, increasing their rateable value beyond SBRR thresholds.
The Federation of Small Businesses (FSB) estimates that nearly 4,000 shared offices could be affected, with some small businesses facing annual cost increases of £5,400.
Shared office spaces have traditionally provided an accessible step for businesses moving out of home working. However, rising costs may now push some back towards home-based operations.
