"At the centre of the dispute is a major change by the Valuation Office Agency (VOA), which has begun treating flexible workspaces as single properties for rating purposes rather than as individual units. This shift means operators and occupiers face significantly higher bills, and tenants can no longer claim key reliefs such as small business rates relief. According to operators, the reclassification has been introduced without consultation, and in some cases applied retroactively - with backdated bills reportedly reaching up to £400,000."
""This sudden reclassification has been introduced without consultation and is already putting the future of many workspaces in jeopardy. Over 150,000 SMEs are losing the reliefs they depend on. Many centres are now on the brink." She warned that those who survive may be forced to pass on the cost increases directly to the small businesses they host - a move that could further strain SMEs already facing rising taxes, inflation and energy costs."
More than 60 serviced office, business centre and co‑working operators, hosting over 27,000 businesses, warned that a Valuation Office Agency reclassification could push companies to the brink and put jobs at risk. The VOA has begun treating flexible workspaces as single properties for rating purposes rather than as individual units, removing access to reliefs such as small business rates relief and resulting in significantly higher bills. Operators report the change was introduced without consultation and in some cases applied retroactively, with backdated bills reportedly reaching up to £400,000. FlexSA estimates over 150,000 SMEs are losing reliefs and warns that surviving centres may pass costs to small-business tenants. The VOA says the change follows developments in case law including Prosser v Ricketts (2024) and Cardtronics v Sykes but has not provided sector guidance, leaving operators uncertain.
Read at Business Matters
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