Business groups and MPs from all parties have raised concerns about a new interpretation of business rates rules that has created additional bills for many UK small businesses.
The so-called "staircase tax" refers to backdated business rates bills currently being delivered to small businesses that use communal stairwells, walkways or lifts. It means that HMRC now considers firms on different floors or corridors in a mixed-use building as two separate premises.
In the past, firms would receive one business rates bill covering all occupied space. Following the Woolway v Mazars Supreme Court ruling, the Valuation Office Agency (VOA) is now allocating different bills for individual floors and workspaces. This means substantial bill increases for small firms; many have also lost small business rates relief as a result.
Mike Cherry, national chairman of the Federation of Small Business (FSB), said: "The staircase tax adds another element of chaos to a business rates system in disarray. Cross-party support from Conservative, Labour and Lib Dem MPs to sort it out is hugely welcome. Time after time, Government is failing to reform an outdated, regressive business rates system.
"Backdating a tax businesses didn't even know they were liable for is the worst kind of anti-business action, making the UK look like a hostile place to invest at a time of unprecedented uncertainty. The VOA is hitting small firms with backdated bills despite the Supreme Court ordering them to exercise 'common sense' - it's an absolute scandal."
Senior Conservative, Labour and Liberal Democrat MPs - including Tory MP Nicky Morgan, who chairs the Treasury select committee - are calling on chancellor Philip Hammond to address this issue in the next Budget.
Morgan told the Sun newspaper: "I certainly support the FSB on this - it can't be right for businesses to suddenly be asked to find money for something they didn't know they might be liable for."
Vince Cable said: "Many businesses are already being clobbered with higher rates, the last thing they need is to be hit with these backdated payments."
The FSB says it has been flooded with appeals for help from its members. Cherry said: "Tens of thousands of businesses will be affected - the Cabinet should recognise the problem, get a grip and sort it out."