A judge has granted a judicial review to Hugo Warner, co-founder of Hackney co-working space Fisheries London, over a backdated business rates bill he described as “outrageous and contradictory”.
The review promises to be a test case for the serviced offices sector, with the Fisheries one of a growing number of operators to face a ‘stealth tax raid’ through a business rates reclassification by the HMRC’s Valuation Office Agency (VOA).
The move shifts full rates liability for whole buildings on to operators and removes small business rates relief for thousands of small firms that occupy them.
Warner claims his business has been singled out with an “illegal” £500,000 additional tax charge dating back to 2023. The bill is a 150% increase to the rates already paid and Warner says it would force the company into administration.
Granting permission for a judicial review, Mrs Justice Lang said: “The claimant has raised arguable grounds which merit consideration at a full hearing.”
In November 2025, more than 60 UK serviced office providers wrote an open letter to the government to voice “urgent and deeply serious concern” about the impact of business rates reclassification.
John Webber, head of business rates at Colliers, which is advising the Fisheries, confirmed that the VO chose to re-rate the Fisheries shared office building as a single establishment, rather than charging it as separate units.
He added that in some cases, claims are being backdated to the last rating list from 2023, with such vast past tax demands putting firms at risk of insolvency.
Warner also claims he is being singled out as a test case, with his nearby competitors not yet facing the same tax hike.
With operators likely to pass on extra bills onto occupiers, Webber said: “It’s effectively a tax on small and microbusinesses. And for many it could just be too much.”
He added: “The VOA’s behaviour does not follow new case law, despite its claims to the contrary.”
Webber said he believed the move was a Treasury bid to raise extra revenue, which if successful could lead to the policy being rolled out more widely across the sector, posing a “massive hit to providers of flex space, to small businesses and to the economy as a whole”.
In a recent letter about the case to Warner’s MP, Dame Meg Hillier, Chancellor Rachel Reeves said the VOA had concluded that “most serviced offices will need to be assessed as a single property, unless clear evidence demonstrates a need to split.”
She added that decisions were being made on a “case by case basis”, but the VOA was looking to “clarify the application of case law on serviced offices” and would then “consider its approach to the rest of the sector”.
Earlier this week, analysis from economic consultancy ChamberlainWalker said business rate reclassifications would deliver a £600m annual hit to the flex office sector, posing “serious risks for flexible workspaces and the small businesses that rely on them”.
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