Councils should not be financially worse off if the Government decides to reverse the controversial ‘staircase tax’, MPs have warned today.

The so-called ‘staircase tax’ means businesses operating in adjoining units or rooms that are accessed from a corridor or staircase receive separate rate bills for each unit. However, following a Supreme Court ruling, communities secretary Sajid Javid published draft legislation to reverse the impact of the tax last year.

In a new report, the Housing, Communities and Local Government Committee calls on the government to urgently assess the potential financial effects the legislation will have on local authorities.

Clive Betts, chair of the HCLG Committee, said: ‘The Government needs to reassure councils that they are not going to be worse off financially because of this legislation.

'It’s only right that if ministers make such changes, then the Government and not local authorities pick up the bill.’