GCUC UK Blog

Integrity in the Dragons’ Den: The VOA at FlexSA

posted on by Emilie Lashmar

  • Industry

Business rates. My personal kryptonite.

In my previous role on the operator side, I didn’t hand it off so much as stay way clear of it, if I’m honest. The finance and ops teams were far smarter than me, far better geared up for it. The only reason I paid any attention at all was that small business rates relief, and during Covid the grants that flowed through it, was a tangible way to put something real back into the hands of our members.

Beyond that, I avoided the detail altogether.

So having Chris Sykes from the Valuation Office at FlexSA today to walk us through where we are with serviced offices and unit of assessment was a genuinely good move.

He explained it all in a very VOA way, with examples ranging from W.H. Smith kiosks at Victoria Station to ATMs in supermarkets, property guardians in empty office blocks, and barristers’ chambers in central London. Cardtronics. Ludgate House. Prosser v Ricketts. The two ends of the scale, from someone hot-desking for an afternoon at one end to a five-year protected lease at the other. And the “general control” test that decides where on that scale a serviced office falls.

A bit of substance for those who want it.

If the licence agreement keeps general control with the operator, the whole building gets one rates assessment. If general control passes to the occupier, every member is separately assessed. Most licence agreements the VOA has reviewed sit with the operator, which means most serviced offices look like one assessment, not many.

Here’s why that matters beyond the operator’s balance sheet.

Small Business Rates Relief was designed for small businesses. Right now, those businesses get individually assessed inside a serviced office, and most qualify. If the building becomes one assessment, the relief vanishes. Not for the operator. For the members. A policy built for SMEs, taken out of SME hands by interpretation.

That’s the bit that hasn’t fully landed in the wider conversation.

There’s a deadline lurking too. The 2023 rating list is open for amendments until 31 March 2027. After that, the VOA can only backdate to 2026. The pressure to merge will ramp before that cliff.

And it must have taken a lot to come and sit in the dragons den. As a civil servant his role is to uphold the law. He doesn’t get to choose whether the law is right or wrong. He doesn’t write it. He interprets it and applies it.

We can absolutely debate whether the law itself is fit for purpose for our industry. That conversation is worth having. But that’s separate from how Chris carries out his duty.

You can’t judge a man for being an upstanding citizen doing his job.

It was refreshing to see a bit of integrity in the room, in a world where you don’t see many active examples of it anymore.

Now for the fight.

Whether this law is right for our industry is a separate question, and that fight is being led by Jane Sartin, Executive Director of FlexSA. She is coordinating the industry’s appeal to Treasury, MPs and ministers, and rightly calling this an existential threat to the UK’s SME ecosystem.

The ChamberlainWalker analysis commissioned by FlexSA puts the hit at £600m a year, with over 150,000 SMEs at risk of losing the reliefs they depend on.

If you operate in flex, here’s where to put your energy:

This is the one to get behind.