"The Valuation Office Agency (VOA) has changed how coworking spaces are taxed, meaning that owners may face overall higher tax bills. The likelihood is that these increases will be passed on to tenants through higher rents."
"Analysis from ChamberlainWalker Economics estimates that the change could add a not-insignificant £600m a year in costs across the sector. Spread across businesses, this could work out to individual small businesses facing increases of more than £5,000 each year."
"As Joe Phelan of money.co.uk warns, treating spaces as a single taxable entity risks pushing a 'significant cost burden' onto small businesses, many of which are already operating on tight margins."
"For coworking spaces, the situation is equally challenging. Higher vacancies could lead to the real potential of site closures, if rents become unaffordable and tenants scale back or leave altogether."
Reforms to the business rates system are set to increase costs for the UK's coworking sector by taxing these spaces as single entities. This change removes access to Small Business Rates Relief, raising concerns about affordability for smaller businesses. Analysis suggests an annual cost increase of £600m across the sector, with individual small businesses facing over £5,000 in additional expenses. The situation could lead to higher rents, increased vacancies, and potential site closures, impacting the overall economic landscape.
Read at Startups.co.uk
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