As the Autumn Statement approaches, National Enterprise Network is urgently calling upon the Chancellor and Prime Minister to maintain current business rates arrangements for micro and small businesses using serviced offices, warning that proposed changes could trigger widespread business failures and reverse post-pandemic recovery gains.

National Enterprise Network, representing business support organisations across the length and breadth of the country, has raised serious concerns about the ongoing uncertainty surrounding business rates for flexible workspaces. This uncertainty threatens to undermine a sector that has shown remarkable resilience, with the UK business population growing by 191,000 between 2024 and 2025, representing a 3.5% increase that highlights the recovery trajectory of small businesses post-COVID.

The current dispute centres on the Valuation Office Agency's (VOA) approach to assessing serviced offices and coworking spaces. In late 2022, following pressure from local authorities led by the City of London, concerns arose about administrative burdens and potential misuse of Small Business Rates Relief. This led to an informal agreement requiring licences to demonstrate "paramount control" for individual office assessments, prompting widespread licence updates across the industry.
However, the issue has resurfaced in 2025, with the VOA now reviewing previously approved licences and some operators exploring short leases as workarounds. The assessment process for new site splits has stalled in several areas, with the VOA pursuing lengthy tribunal proceedings that could take years to resolve, leaving businesses in limbo.

The implications extend far beyond individual businesses. Small businesses currently employ 13.1 million people, representing 47% of total UK employment, whilst SMEs generate 51.2% of the UK's total turnover of £2.8 trillion. Any disruption to business rates arrangements could jeopardise this economic contribution at a time when 94% of businesses are actively trading, with 84% fully operational.

"As we approach the Autumn Statement, we are deeply concerned about the ongoing uncertainty surrounding business rates arrangements for serviced offices and flexible workspaces. The potential for retrospective rate assessments threatens to undermine the recovery of our sector at a critical juncture. Many micro and small businesses that rely on these collaborative environments could be forced back to working from home or coffee shops, losing the invaluable benefits of professional coworking spaces. We urgently call upon the Chancellor and Prime Minister to provide clarity and stability, preventing what could be a devastating blow to an industry that has already weathered the storms of the pandemic and is now showing signs of recovery," said Alex Till, Chair of National Enterprise Network.

The timing is particularly concerning as businesses prepare for year-end planning and goal-setting for 2026. The uncertainty threatens to disrupt the collaborative professional environments that have become essential for micro and small businesses, potentially forcing a regression to isolated working arrangements that lack the networking opportunities and professional infrastructure that coworking spaces provide.

National Enterprise Network warns that retrospective business rates claims could result in immediate business closures, with many small enterprises lacking the financial reserves to absorb unexpected backdated charges. This would not only impact individual businesses but could trigger a domino effect across the serviced office sector, undermining operators who are still recovering from pandemic-related challenges.

The organisation is calling for immediate government intervention to provide certainty and prevent what could become a significant setback for the UK's small business ecosystem. With the flexible workspace sector playing an increasingly vital role in supporting entrepreneurship and business growth, maintaining stable and predictable business rates arrangements is essential for continued economic recovery.

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